investors january 2012

8/3/2019 Investors January 2012

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Ross Stores, Inc.

Investor Overview

January 2012


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2January 2012

Disclosure of Risk FactorsForward-Looking Statements: This presentation as well as the press releases and the recordedcomments on our corporate website contain forward-looking statements regarding expected sales,earnings levels, and other financial results in future periods that are subject to risks and uncertaintieswhich could cause our actual results to differ materially from managements current expectations.

Risk factors for Ross Dress for Less(Ross) and dds DISCOUNTS include without limitation,

competitive pressures in the apparel or home-related merchandise industry; changes in the level ofconsumer spending on or preferences for apparel or home-related merchandise; the impact from themacro-economic environment and financial and credit markets including but not limited to interest rates,recession, inflation, deflation, energy costs, tax rates and policy, unemployment trends, and fluctuatingcommodity costs; changes in geopolitical and geoeconomic conditions; unseasonable weather trends;disruptions in supply chain; lower than planned gross margin, including higher than planned markdownsand higher than expected inventory shortage; greater than planned operating costs; our ability to

continue to purchase attractive brand-name merchandise at desirable discounts; our ability to attract andretain personnel with the retail talent necessary to execute our strategies; our ability to effectivelyoperate our various supply chain, core merchandising and other information systems; our ability toimprove our merchandising capabilities through the implementation of new processes and systemsenhancements; achieving and maintaining targeted levels of productivity and efficiency in our distributioncenters; and obtaining acceptable new store locations.

Other risk factors are set forth in our SEC filings including, without limitation, the Form 10-K for fiscal2010 and Form 10-Qs and 8-Ks for fiscal 2011. The factors underlying our forecasts are dynamic andsubject to change. As a result, our forecasts speak only as of the date they are given and do notnecessarily reflect our outlook at any other point in time. We do not undertake to update or revise theseforward-looking statements.


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3January 2012

Ross Stores, Inc. Overview

S&P 500, Fortune 500 and Nasdaq100 company with fiscal 2010revenues of $7.9 billion

Ross Dress for Lessis the largestoff-price apparel and home fashionchain in the U.S. with 1,038 storesin 29 states, the District of Columbiaand Guam*

Also operate 88 dds DISCOUNTS

in seven states*

Consistent long-term growth in bothsales and EPS

Fortune 500 Statistics Ranked #303 in 2010, up from

#316 in 2009

Ranked #20 out of 500 companiesin average total return tostockholders over ten years

$7.9

$7.2

$6.5

$6.0$5.6

$4.63

$3.54

$2.33

$1.90$1.70

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

2006** 2007 2008 2009 2010

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

Sales ($ billion) EPS

* Through 12/31/11.

** Fiscal 2006 was a 53 week year; all other fiscal years had 52 weeks.

EPSSales


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4January 2012

1,126 Stores in 29 States (as of 12/31/11)

ddsRossddsRossddsRossddsRoss

South Carolina

Pennsylvania

Oregon

Oklahoma

North Carolina

New Mexico

New JerseyNevada

881,038TOTAL206Montana244Georgia

2Wyoming375Mississippi12126Florida

1Washington DC26118Maryland1Delaware

37Washington1912Louisiana29Colorado

33Virginia3312Illinois48242California

15Utah89Idaho2Arkansas

19155Texas1013Hawaii455Arizona25Tennessee2241Guam18Alabama


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5January 2012

Delivering Bargains

Department store brands

Significant discounts off comparable prices Everyday low pricing

Wide assortment of styles and fashions(e.g. treasure hunt)

Constant flow of fresh merchandise


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6January 2012

Merchandise Mix*

Ladies

29%

Home Accents,

Bed and Bath

25%

Men's

13%

Accessories,

Lingerie, Fine

Jewelry,

Fragrances

12%

Shoes

12%

Children's

9%

* Fiscal 2010


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7January 2012

Key Value Drivers

Opportunistic buying supported by a large, experienced off-pricebuying organization

Hundreds of merchants sourcing product from thousands of

manufacturers and vendors

Broad market coverage and strong vendor relationshipsenhanced by strategic location of buying offices in New York Cityand Los Angeles

Effective management of inventory and liquidity

Planning and allocating at a more local vs. regional level

New tools and processes have strengthened our ability to get

the right item to the right store at the right time


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8January 2012

Typical Ross Customer

About 75-80% female, shopping forherself / other family members

Wide range of household incomes want a bargain vs. need abargain

Brands are important

Enjoys treasure hunt format andspending time shopping forbargains

Core customer averages about

three store visits a month

Demographic How We Reach Her

Marketing reflects the businessstrategy great brands at greatvalues every day!

Television is an effective mediumto reach customers with a strongvalue message

Creates and sustainsawareness

Encourages more frequentshopping

Cost effective vehicle


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9January 2012

Ross Store Prototype

Efficient, low-cost format

25,000 - 30,000 gross s.f. insuburban centers

Convenient self-service format

Strong co-tenancy

Visible and accessible retaillocations

Located in markets with a

large proportion of middleincome households


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10January 2012

dds DISCOUNTS

Concept launched in California inQ304

Stores located in California,Texas, Florida, Arizona, Georgia,Nevada and Maryland

Target customer is typicallyyounger and from households

with more moderate incomelevels than Ross

Assortments feature moremoderate brands and fashions for

the family and home at loweraverage price points than Ross


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11January 2012

dds DISCOUNTS Update

Continue to strengthen assortmentswith attractive and compelling valuesthat appeal to this budget-consciousshopper

Respectable sales gains in FY10 on topof exceedingly strong increases inFY09

Merchandise gross margin grewsignificantly in FY10 on top of record

levels in FY09

dds DISCOUNTS made a slightcontribution to total pre-tax earnings inFY10 before corporate expenseallocations

Accelerating growth in FY 2011 with 20new stores; continue to see potential forabout 500 locations over the long term


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12January 2012

Financial Results


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13January 2012

Flexible and Resilient Off-Price Model

Strong sales and EPS growth achieved over the past three yearsin one of the most challenging macro-economic and retailclimates

Benefiting from our ability to offer terrific bargains

Taking advantage of close-out opportunities in the marketplace

Operating the business with leaner in-store inventories Increases the percentage of fresh product in front of the customer

Promotes faster inventory turns to maximize merchandise gross

margin Reduces working capital needs

Diligently managing expenses across the Company

Remain very focused on efficient execution of our strategies,

which is always the key to maximizing our prospects for sales andearnings growth in any type of economic or retail climate


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14January 2012

Off-Price Retailers Gain Market Share

Off-price was one of the best performing retail sectors in 2009 and2010: Total aggregate sales for five of the largest off-price retailers in the U.S.

increased 8% during 2010 on top of a 7% increase in 2009

This compares to total national apparel sales which increased 2%during 2010 compared to a 5% decrease in 2009, according to datapublished by the NPD Group, Inc.

Our top priority is ensuring access to terrific brands at greateveryday low prices

Reflected in ongoing investments in our merchant organization Our highly skilled merchants purchase product from thousands of

vendors and manufacturers enabling consistent access to quality namebrand bargains that our customers value

Believe consumers will continue to seek out bargains

More value-focused shopping behavior is enabling Ross anddds DISCOUNTS to gain new customers

Also capturing market share from retailers who have gone out ofbusiness


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15January 2012

FY 2010 sales increased 9% to $7.9 billion, with comparable storesales up 5% on top of a 6% gain in 2009

Added 50 net new locations in FY 2010

FY 2010 EBIT rose to a record 11.5%, up 140 bps on top of a250 bps gain in FY 2009

Earnings per share increased to $4.63 up a robust 31% on top of a52% gain in 2009

Exceeded sales targets with leaner inventories, realizing significantlyfaster turns which resulted in much lower markdowns as a percent ofsales

Key factors contributing to improved profitability were much highermerchandise gross margin, lower shortage costs, and leverage onoperating expenses from the solid gain in same store sales

Fiscal 2010 Results


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16January 2012

Sales increased 9% to $6.2 billion, with comparable store sales up 5% ontop of a 6% gain last year

Top performing merchandise categories were Dresses and Shoes

Strongest markets were Florida and Texas

Added a net 71 locations in the first nine months including 12 Chicago-areastores that opened in early October which marked our entry into theMidwest. Ended the period with 1,038 Ross and 88 dds DISCOUNTSstores

First nine months EPS increased 24% to $4.03, which was on top of

outstanding gains of 36% and 52% in 2010 and 2009, respectively Operating margin improved about 85 bps to 12.1% (on top of 170 bp and 240 bp

increases in 2010 and 2009, respectively)

Gross margin grew 45 bps as higher merchandise gross margin and loweroccupancy and buying and incentive costs as a percent of sales were partially

offset by higher freight and distribution expenses SG&A as a percent of sales declined 40 bps due to leverage on both store and

corporate expenses from the 5% gain in same store sales

First Nine Months 2011 Results


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17January 2012

Fiscal 2011 Guidance (As of January 5, 2012)*

Q4 2011 earnings per share projected to be $.82-.83, up 19% to

20% over last year

Reflects solid growth on top of 18% and 53% gains in the prior two

years

Q4 2011 benefiting from above-plan sales and favorable gross margin

trends for the first two months of the quarter

Same store sales up 5% and 9% in November and December,

respectively, on top of 2010 growth of 6% and 4%, respectively

Implied fiscal 2011 earnings per share of $2.83-2.84, up

approximately 23% on top of 31% and 52% gains in the prior two

years

Continue to forecast a 1% to 2% increase in January same storesales

* All per share figures reflect the two-for-one stock split paid on 12/15/11.


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18January 2012

Targeting Sustainable Profit Margins

Believe current levels of annual profitability are sustainable over the longerterm

Record levels of merchandise gross margin have been driven by betterbuying and faster inventory turns from our sizeable reduction of selling store

inventories over the past few years Continue to invest in buying organization to maximize access to best bargains

available in the marketplace

Selling store inventories are approximately 40% lower than five years ago

Ongoing focus on tight inventory management allows us to increase the

percentage of fresh receipts customers see when shopping our stores as well asdrive faster inventory turns to maximize merchandise gross margin

Successful implementation of our shortage control initiatives have contributedto higher profit margins as we realized record low levels of shortage in 2011which we believe are sustainable going forward

Numerous productivity enhancements and efficiencies throughout theCompany have driven down costs in our distribution centers, storesorganization and back office functions


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19January 2012

Higher Levels of Cash Returned to Stockholders

In November 11, Board of Directorsapproved a two-for-one stock split whichreflects our ongoing confidence in theCompanys future growth prospects andcontinued commitment to enhancingstockholder value

In February 11, announced new two-year$900 million stock repurchase program for2011 and 2012

Replaced $375 million remaining under priorprogram

Repurchased 4.5 million shares for $343million in the first nine months of fiscal 2011

Company has repurchased shares in line withplan every year since 1993

Increased quarterly cash dividend to $.22per share ($.11 post split) in January 2011,for a 38% increase on top of 45% growth inthe prior year (17th consecutive annualincrease)

Combination of existing cash balances,ongoing cash generation, and current creditfacilities gives Ross plenty of flexibility forboth the short- and long-term

241

350 355

550

452

0

100

200

300

400

500

600

2007 2008 2009 2010 2011F

Share Repurchases Dividends

Share repurchases anddividend payments

($ millions)

2011 is forecasted.


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20January 2012

Capital Expenditures

FY 2011 capital expenditures now projected to be approximately $400-$425 millioncompared to our prior estimate of about $375-425 million.

The increase is due to a timing shift of certain corporate- and store-related capitalprojects from 2012 to 2011 and our decision to acquire certain buildings in 2011.

We expect to fund these expenditures with available cash and cash flows from

operations.

2010 Actual 2011 Forecast

New Stores $ 76 million $ 110-115 million

Existing Stores 63 million 115-130 million

Distribution 34 million 90 million

IT / Other G&A 26 million 85-90 million

Total $ 199 million $ 400-425 million


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21January 2012

Investment Highlights

Favorably positioned as a leader in the off-price industry, whichcontinues to gain market share

Ross Dress for Less is the largest off-price apparel and home fashionchain in the U.S. with 1,038 locations in 29 states, the District ofColumbia and Guam

Proven strategies have driven growth for almost 30 years

Strong balance sheet with minimal debt and high returns

Consistent generation of excess cash that is returned to stockholders

Core focus on delivering competitive bargains continues to resonatewith todays value-driven consumer

Ongoing efficient execution of our off-price strategies is expected to:

Enhance ability to manage through any type of economic or retailclimate

Maximize prospects for sales and earnings growth

Optimize stockholder returns over both the short- and long-term

investors january 2012

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