Ross Stores (ROST) 10-K risk factor changes: FY2015 vs FY2014

Our Annual Report on Form 10-K for fiscal [removed: 2013,] [added: 2014,] and information we provide in our Annual Report to Stockholders, press releases, [removed: telephonic reports,] and other investor communications, including those on our corporate website, may contain forward-looking statements with respect to anticipated future events and our projected [added: growth,] financial performance, operations, and competitive position that are subject to risks and uncertainties that could cause our actual results to differ materially from those forward-looking statements and our prior expectations and projections.

| • | A downturn in the economy or a natural disaster in California or in another region where we have a concentration of stores or a distribution center. Our corporate headquarters, Los Angeles buying office, two [added: operating] distribution centers, [removed: one warehouse,] [added: two warehouses,] and 25% of our stores are located in California. |

| • | Achieve and maintain targeted levels of productivity and efficiency in our existing and [removed: future] [added: new] distribution centers. |

Ross is the largest off-price apparel and home fashion chain in the United States with [removed: 1,146] [added: 1,210] locations in 33 states, the District of Columbia and Guam as of [removed: February 1, 2014.][added: January 31, 2015.]

Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at [removed: everyday] savings of 20% to 60% off department and specialty store regular [removed: prices.][added: prices every day.]

We also operate [removed: 130] [added: 152] dd’s DISCOUNTS stores in [removed: 10] [added: 15] states [added: as of January 31, 2015] that feature a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family at [removed: everyday] savings of 20% to 70% off moderate department and discount store regular prices [removed: as of February 1, 2014.][added: every day.]

Our primary objective is to pursue and refine our existing off-price strategies to maintain [removed: or] [added: and] improve both profitability and financial returns over the long term.

Our sales and earnings gains in [removed: 2013] [added: 2014] continued to benefit from efficient execution of our off-price model throughout all areas of our business.

Our merchandise and operational strategies are designed to take advantage of the expanding market share of the off-price industry as well as the ongoing customer demand for name brand fashions for the family and home at compelling [removed: everyday discounts.][added: discounts every day.]

We refer to our fiscal years ended [added: January 31, 2015,] February 1, 2014, [added: and] February 2, [removed: 2013, and January 28, 2012] [added: 2013] as fiscal [removed: 2013,] [added: 2014,] fiscal [removed: 2012,] [added: 2013,] and fiscal [removed: 2011,] [added: 2012,] respectively.

Fiscal 2012 was [removed: 53 weeks.][added: a 53-week year.]

Fiscal [removed: 2013] [added: 2014] and [removed: 2011] [added: 2013] were [removed: 52 weeks.][added: 52-week years.]

The following table summarizes the financial results for fiscal [added: 2014,] 2013, [removed: 2012,] and [removed: 2011:][added: 2012:]

| | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | [removed: ¹] | [removed: 2011] [added: 2012] | | | [added: ¹ |]

| Sales | | | | | | | | | | | | | [added: |]

| Sales (millions) | | $ | [removed: 10,230] [added: 11,042] | | | $ | [removed: 9,721] [added: 10,230] | | | $ | [removed: 8,608] [added: 9,721] | | [added: |]

| Sales growth | | [removed: 5.2] [added: 7.9] | | % | | [removed: 12.9] [added: 5.2] | | % | | [removed: 9.4] [added: 12.9] | | % | [added: |]

| Comparable store sales growth (52-week basis) | | 3 | | % | | [removed: 6] [added: 3] | | % | | [removed: 5] [added: 6] | | % | [added: |]

| Costs and expenses (as a percent of sales) | | | | | | | | | | | | | [added: |]

| Cost of goods sold | | [removed: 72.0] [added: 71.9] | | % | | [removed: 72.1] [added: 72.0] | | % | | [removed: 72.5] [added: 72.1] | | % | [added: |]

| Selling, general and administrative | | [removed: 14.9] [added: 14.6] | | % | | [removed: 14.8] [added: 14.9] | | % | | [removed: 15.2] [added: 14.8] | | % | [added: |]

| Interest [removed: (income) expense,] [added: expense (income),] net | | [removed: —] [added: 0.0] | | [added: %] | | [removed: 0.1] [added: 0.0] | | % | | 0.1 | | % | [added: |]

| Earnings before taxes (as a percent of sales) | | [removed: 13.1] [added: 13.5] | | % | | [removed: 13.0] [added: 13.1] | | % | | [removed: 12.2] [added: 13.0] | | % | [added: |]

| Net earnings (as a percent of sales) | | [removed: 8.2] [added: 8.4] | | % | | [removed: 8.1] [added: 8.2] | | % | | [removed: 7.6] [added: 8.1] | | % | [added: |]

Total stores open at the end of fiscal [added: 2014,] 2013, [removed: 2012,] and [removed: 2011] [added: 2012] were [added: 1,362,] 1,276, [removed: 1,199,] and [removed: 1,125,] [added: 1,199,] respectively.

The number of stores at the end of fiscal [added: 2014,] 2013, [removed: 2012,] and [removed: 2011] [added: 2012] increased by [removed: 6%,] 7%, [added: 6%,] and 7% from the respective prior years.

| Store Count | [removed: 2013] [added: 2014] | | | [removed: 2012] [added: 2013] | | | [removed: 2011] [added: 2012] | |

| Beginning of the period | [removed: 1,199] [added: 1,276] | | | [removed: 1,125] [added: 1,199] | | | [removed: 1,055] [added: 1,125] | |

| Opened in the period | [removed: 88] [added: 95] | | | [removed: 82] [added: 88] | | | [removed: 80] [added: 82] | |

| Closed in the period | [removed: (11)] [added: (9)] | | | [removed: (8] [added: (11] | ) | | [removed: (10] [added: (8] | ) |

| End of the period | [removed: 1,276] [added: 1,362] | | | [removed: 1,199] [added: 1,276] | | | [removed: 1,125] [added: 1,199] | |

| Selling square footage at the end of the period (000) | [removed: 28,900] [added: 30,400] | | | [removed: 27,800] [added: 28,900] | | | [removed: 26,100] [added: 27,800] | |

Sales for fiscal [removed: 2013] [added: 2014] increased [removed: $0.5] [added: $0.8] billion, or [removed: 5.2%,] [added: 7.9%,] compared to the prior year due to the opening of [removed: 77] [added: 86] net new stores during [removed: 2013] [added: 2014] and a 3% increase in comparable store sales (defined as stores that have been open for more than 14 complete months).

Sales for fiscal [removed: 2012] [added: 2013] increased [removed: $1.1] [added: $0.5] billion, or [removed: 12.9%,] [added: 5.2%,] compared to the prior year due to the opening of [removed: 74] [added: 77] net new stores during [removed: 2012,] [added: 2013 and] a [removed: 6%] [added: 3%] increase in sales from comparable [removed: stores, and approximately $149 million in sales from the 53rd week.][added: stores.]

Our sales mix is shown below for fiscal [added: 2014,] 2013, [removed: 2012,] and [removed: 2011:][added: 2012:]

| | | [removed: 2013] [added: 2014] | | | [removed: 2012] [added: 2013] | | | [removed: 2011] [added: 2012] | |

| Home Accents and Bed and Bath | | 24 | % | | 24 | % | | [removed: 25] [added: 24] | % |

| Shoes | | 13 | % | | 13 | % | | [removed: 12] [added: 13] | % |

Although our strategies and store expansion program contributed to sales gains in fiscal [added: 2014,] 2013, [removed: 2012,] and [removed: 2011,] [added: 2012,] we cannot be sure that they will result in a continuation of sales growth or in an increase in net earnings.

Cost of goods sold in fiscal [removed: 2012] [added: 2014] increased [removed: $770.7] [added: $577.0] million compared to the prior year mainly due to increased sales from the opening of [removed: 74] [added: 86] net new stores during the year and a [removed: 6%] [added: 3%] increase in sales from comparable stores.

Cost of goods sold as a percentage of sales for fiscal [removed: 2012] [added: 2014] decreased approximately [removed: 40] [added: 5] basis points from the prior [removed: year.][added: year primarily due to a 20 basis point increase in merchandise gross margin.]

This improvement was [removed: due primarily to] [added: partially offset by] a [removed: 40] [added: 15] basis point increase in [removed: merchandise gross margin.][added: buying costs.]

We cannot be sure that the gross profit margins realized in fiscal [added: 2014,] 2013, [removed: 2012,] and [removed: 2011] [added: 2012] will continue in future years.

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In fiscal 2014, net interest expense increased by $3.2 million primarily due to the issuance of our unsecured 3.375% Senior Notes due September 2024.

| Interest expense on long-term debt | | $ | 13.0 | | | $ | 9.7 | | | $ | 9.7 | |

| Other interest expense | | 1.2 | | | | 1.4 | | | | 1.7 | | |

| Capitalized interest | | (10.8 | | ) | | (10.8 | | ) | | (3.9 | | ) |

| ($ millions) | | 2014 | | | | 2013 | | | | 2012 | | |

In September 2014, we issued $250 million of unsecured 2024 Notes and used most of the net proceeds of approximately $246 million to purchase our New York buying office building for $222 million and the remaining $24 million for other general corporate purposes.

In March 2015, our Board of Directors approved a two-for-one stock split in the form of a 100 percent stock dividend, to be paid on June 11, 2015 to stockholders of record as of April 22, 2015.

The stock split will not have an impact on our consolidated financial position or results of operations.

Share and per share amounts have not been restated to reflect the pending stock split.

| Interest payment obligations | 18,105 | | | | 36,210 | | | | 30,109 | | | | 50,146 | | | | 134,570 | | |

| Operating leases (rent obligations) | 432,005 | | | | 855,580 | | | | 589,540 | | | | 475,499 | | | | 2,352,624 | | |

| New York buying office ground lease² | 6,418 | | | | 12,835 | | | | 12,835 | | | | 958,986 | | | | 991,074 | | |

| Purchase obligations | 1,928,578 | | | | 19,726 | | | | 4,663 | | | | — | | | | 1,952,967 | | |

| Total contractual obligations | $ | 2,385,106 | | | $ | 924,351 | | | $ | 722,147 | | | $ | 1,799,631 | | | $ | 5,831,235 | |

²Our New York buying office building is subject to a 99-year ground lease.

In September 2014, we issued unsecured 2024 Notes with an aggregate principal amount of $250 million.

The 2024 Notes were issued at a price equal to 99.329% of the principal amount.

Interest on the 2024 Notes is payable semi-annually beginning March 2015.

In addition, we have a ground lease related to our New York buying office.

The lease term for this facility expires in 2017 and contains renewal provisions.

merchandise inventory are more difficult than anticipated, additional merchandise inventory write-downs may be required.

Recently issued accounting standards.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized.

The core principle of the guidance is that a company should recognize revenue when the customer obtains control of promised goods or services in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services.

ASU 2014-09 is effective for our annual and interim reporting periods beginning in fiscal 2017.

We are currently evaluating the effect adoption of this new guidance will have on our consolidated financial statements.

Looking ahead to 2014, we are planning additional incremental reductions in average store inventory levels while continuing to maintain strict controls on operating expenses as part of our strategy to maximize our profitability.

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In addition, occupancy leveraged 25 basis points and distribution expenses as a percent of sales also declined approximately 15

basis points.

These favorable items were partially offset by increases in buying and freight costs of 25 and 10 basis points, respectively, and 5 basis points related to the year over year true-up in our shortage reserve.

In fiscal 2013, interest expense decreased by $7.2 million primarily due to higher capitalization of interest related to construction of our new distribution centers.

Interest income decreased by $0.1 million primarily due to lower investment yields as compared to the prior year.

| Interest expense | | $ | 0.3 | | | $ | 7.5 | | | $ | 11.0 | |

The decrease in cash used for investing activities for fiscal 2012 compared to fiscal 2011 was primarily due to a transfer of funds in fiscal 2011 into restricted accounts to serve as collateral for our insurance obligations.

In 2013 we purchased the land and building of our previously leased 1.3 million square foot Perris, California distribution center for $70 million; we also spent approximately $60 million building out our new corporate headquarters.

Our buying offices, our former corporate headquarters, two truck and trailer parking facilities, three warehouse facilities, and all but three of our store locations are leased and, except for certain leasehold improvements and equipment, do not represent capital investments.

The building is subject to a 99 year ground lease through June 2111.

The Sale-Purchase Agreement contemplates completion of the sale and purchase of the building on or before September 20, 2014, subject to satisfaction of various closing conditions.

Under the Sale-Purchase Agreement, we provided a deposit of 10% of the purchase price.

In the event we are unable or choose not to complete the purchase of the building, we would forfeit the deposit but have no further liability to the seller or obligation to complete the purchase.

In September 2013, we deposited $11.1 million and provided an $11.1 million standby letter of credit to meet the 10% deposit obligation.

In January 2014, we deposited an additional $2.2 million in escrow for the building bringing our total deposit to $13.3 million.

We plan to finance the purchase of the building in 2014.

We are forecasting approximately $800 million in capital expenditures for fiscal year 2014, up from $550.5 million in fiscal 2013.

We purchased no investments in fiscal 2011.

| Interest payment obligations | 9,668 | | | | 19,335 | | | | 18,657 | | | | 12,203 | | | | 59,863 | | |

| Operating leases (rent obligations) | 417,443 | | | | 801,735 | | | | 569,380 | | | | 498,371 | | | | 2,286,929 | | |

| Purchase obligations | 1,792,423 | | | | 19,260 | | | | — | | | | — | | | | 1,811,683 | | |

| Total contractual obligations | $ | 2,219,534 | | | $ | 840,330 | | | $ | 673,037 | | | $ | 575,574 | | | $ | 4,308,475 | |

Interest on these notes is included in Interest payment obligations in the table above.

We lease three warehouses.

We lease a 10-acre parcel for trailer parking adjacent to our Perris, California distribution center that expires in 2017 and a 20-acre facility located in Moreno Valley, California primarily for ancillary truck and trailer parking that expires in 2015.

Both of these leases contain renewal provisions.

We lease approximately 192,000 square feet of office space for our former corporate headquarters in Pleasanton, California, under several facility leases.

The term for the majority of these leases expires in June 2014.

The lease term for the remaining space of approximately 11,000 square feet expires in March 2015.

We do not plan to renew any of these leases.

The lease terms for these facilities expire in 2022 and 2017, respectively, and contain renewal provisions.

As of February 1, 2014, we also had an $11.1 million standby letter of credit in connection with our New York buying office Sale-Purchase Agreement.

Packaway inventory accounted for

We had no outstanding forward contracts as of [removed: February 1, 2014.][added: January 31, 2015.]

As of [removed: February 1, 2014,] [added: January 31, 2015,] we had no borrowings outstanding under our revolving credit facility.

[removed: In addition, we] [added: We] have two outstanding series of unsecured notes held by institutional investors: Series A [added: Senior Notes due December 2018] for $85 million accrues interest at 6.38% and Series B [added: Senior Notes due December 2021] for $65 million accrues interest at 6.53%.

The amount outstanding under these notes as of [removed: February 1, 2014] [added: January 31, 2015] was $150 million.

A hypothetical 100 basis point increase or decrease in prevailing market interest rates would not have a material impact on our consolidated financial position, results of operations, cash flows, or the fair values of our short- and long-term investments as of and for the year ended [removed: February 1, 2014.][added: January 31, 2015.]

We also have unsecured 3.375% Senior Notes due September 2024 with an aggregate principal amount of $250 million.

Interest that is payable on our senior notes is based on fixed interest rates and is therefore, unaffected by changes in market interest rates.

Ross is the largest off-price apparel and home fashion chain in the United States, with [removed: 1,146] [added: 1,210] locations in 33 states, the District of Columbia and Guam, as of [removed: February 1, 2014.][added: January 31, 2015.]

Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at [removed: everyday] savings of 20% to 60% off department and specialty store regular [removed: prices.][added: prices every day.]

[removed: Ross] [added: Ross'] target customers are primarily from middle income households.

We also operate [removed: 130] [added: 152] dd’s DISCOUNTS stores in [removed: 10] [added: 15] states as of [removed: February 1, 2014.][added: January 31, 2015.]

dd's DISCOUNTS features more moderately-priced first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family at [removed: everyday] savings of 20% to 70% off moderate department and discount store regular [removed: prices.][added: prices every day.]

We refer to our fiscal years ended [added: January 31, 2015,] February 1, 2014, [added: and] February 2, [removed: 2013, and January 28, 2012] [added: 2013] as fiscal [removed: 2013,] [added: 2014,] fiscal [removed: 2012,] [added: 2013,] and fiscal [removed: 2011,] [added: 2012,] respectively.

Fiscal [removed: 2013] [added: 2014] and [removed: 2011] [added: 2013] were each 52-week years.

We seek to provide our customers with a wide assortment of first-quality, in-season, brand name and designer apparel, accessories, footwear, and home merchandise for the entire family at [removed: everyday] savings of 20% to 60% below department and specialty store regular prices [added: every day] at Ross, and 20% to 70% below moderate department and discount store regular prices at dd’s DISCOUNTS.

The mix of comparable store sales by department in fiscal [removed: 2013] [added: 2014] was approximately as follows: Ladies 29%, Home Accents and Bed and Bath 24%, Accessories, Lingerie, Fine Jewelry, and Fragrances 13%, [removed: Shoes 13%,] Men's [added: 13%, Shoes]

[removed: Our] [added: These] merchandise offerings [removed: also] include, but are not limited to, small furniture and furniture accents, educational toys and games, luggage, gourmet food and cookware, watches, and sporting goods.

We have a combined network of approximately [removed: 7,900] [added: 8,200] merchandise vendors and manufacturers for both Ross and dd’s DISCOUNTS and believe we have adequate sources of first-quality merchandise to meet our requirements.

Our buyers use a number of methods that enable us to offer our customers brand name and designer merchandise at strong [removed: everyday] discounts [added: every day] relative to department and specialty stores for Ross and moderate department and discount stores for dd’s DISCOUNTS.

For most orders, only one delivery is made to one of our [removed: four] [added: five] distribution centers.

In fiscal [removed: 2013,] [added: 2014,] we continued our emphasis on this important sourcing strategy in response to compelling opportunities available in the marketplace.

Packaway accounted for approximately [removed: 49%] [added: 45%] and [removed: 47%] [added: 49%] of total inventories as of [removed: February 1, 2014] [added: January 31, 2015] and February [removed: 2, 2013,] [added: 1, 2014,] respectively, and reflects our merchants’ continued ability to take advantage of a large amount of close-out opportunities in the marketplace.

At the end of fiscal [removed: 2013,] [added: 2014,] we had approximately [removed: 660] [added: 700] merchants for Ross and dd’s DISCOUNTS combined.

Ross and dd’s DISCOUNTS buyers have on average eight years of experience, including merchandising positions with other retailers such as Bloomingdale's, Burlington [removed: Coat Factory,] [added: Stores,] Foot Locker, Kohl’s, Loehmann’s, Lord & Taylor, Macy's, [removed: Marshalls,] Nordstrom, Saks, and [removed: T.J. Maxx.][added: TJX.]

As of [removed: February 1, 2014,] [added: January 31, 2015,] we operated a total of [removed: 1,276] [added: 1,362] stores comprised of [removed: 1,146] [added: 1,210] Ross stores and [removed: 130] [added: 152] dd’s DISCOUNTS stores.

We provide [removed: cash, credit card, and debit card] refunds on all merchandise (not used, worn, or altered) returned with a receipt within 30 days.

Recent initiatives include enhancements to our merchandise planning, core merchandising, allocation management, and store [added: point-of-sale and store] labor management systems.

We [removed: have four] [added: own and operate five] distribution processing facilities – two in California, one in Pennsylvania, and [removed: one] [added: two] in South Carolina.

[removed: Two] [added: An] additional distribution [removed: centers] [added: center] in [removed: Rock Hill, South Carolina and] Shafter, California [removed: are] [added: is] currently under construction and expected to open in [removed: 2014 and 2015, respectively.][added: 2015.]

Currently we own [removed: two] [added: four] and lease three other warehouse facilities for packaway storage.

Advertising for Ross Dress for Less relies primarily on television to communicate the Ross value [removed: proposition—everyday] [added: proposition—] savings off the same brands carried at leading department [removed: stores.][added: stores every day.]

Advertising for dd’s DISCOUNTS is primarily focused on new store grand openings and local [removed: grass roots] [added: media] initiatives.

We believe that we are [removed: well positioned] [added: well-positioned] to compete [added: based] on [removed: the basis of] each of these factors.

Our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statements, and [added: any] amendments to those reports are made available free of charge on or through the Investors section of our corporate website promptly after being electronically filed with the Securities and Exchange Commission.

We accept a variety of payment methods.

While television is our primary advertising medium, we continue to utilize additional channels to communicate our brand position.

As of January 31, 2015, we had approximately 71,400 total employees, which includes both full and part-time employees.

We use point-of-sale (“POS”) hardware and software systems in all stores, which minimizes transaction time for the customer at the checkout counter by electronically scanning each ticket at the point of sale and authorizing personal checks, debit, credit, and stored-value cards in a matter of seconds.

For Ross and dd’s DISCOUNTS combined, approximately 62% and 61% of payments in fiscal 2013 and fiscal 2012, respectively, were made with credit cards and debit cards.

In addition, we completed the build-out and relocation of our new data center in fiscal 2013.

We are in the process of building two additional warehouses which we plan to open in 2014.

We continue to utilize additional channels to build awareness.

As of February 1, 2014, we had approximately 66,300 total employees, including an estimated 48,900 part-time employees.

Class action litigation remains pending as of [removed: February 1, 2014.][added: January 31, 2015.]

Actions filed against us include commercial, product and product safety, customer, intellectual property, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that we violated [removed: local, state] [added: federal, state, and /] or [removed: federal] [added: local] laws.

We believe that the resolution of our pending class action litigation and other currently pending legal [added: and regulatory] proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows.

| | | For the fiscal year ended [removed: February 1, 2014] [added: January 31, 2015] | |

The aggregate market value of the voting common stock held by non-affiliates of the Registrant as of August [removed: 3, 2013] [added: 2, 2014] was [removed: $14,570,821,195,] [added: $13,252,215,244,] based on the closing price on that date as reported by the NASDAQ Global Select Market®.

The number of shares of Common Stock, with $.01 par value, outstanding on March [removed: 12, 2014] [added: 9, 2015] was [removed: 212,969,295.][added: 207,489,276.]

Portions of the Proxy Statement for the Registrant's [removed: 2014] [added: 2015] Annual Meeting of Stockholders, which will be filed on or before June [removed: 2, 2014,] [added: 1, 2015,] are incorporated herein by reference into Part III.

10-K 1 rost-20150131x10k.htm 10-K

10-K 1 rost-20140201x10k.htm 10-K

At [removed: February 1, 2014,] [added: January 31, 2015,] we operated a total of [removed: 1,276] [added: 1,362] stores, of which [removed: 1,146] [added: 1,210] were Ross locations in 33 states, the District of Columbia and Guam, and [removed: 130] [added: 152] were dd’s DISCOUNTS stores in [removed: 10] [added: 15] states.

During fiscal [removed: 2013,] [added: 2014,] we opened [removed: 65] [added: 73] new Ross stores and closed [removed: 10] [added: nine] existing stores.

The average approximate Ross store size is [removed: 29,100] [added: 28,800] square feet.

During fiscal [removed: 2013,] [added: 2014,] we opened [removed: 23] [added: 22] new dd’s DISCOUNTS stores and closed [removed: one] [added: no] existing [removed: store.][added: stores.]

The average approximate dd’s DISCOUNTS store size is [removed: 23,600] [added: 23,400] square feet.

During fiscal [removed: 2013,] [added: 2014,] no one store accounted for more than 1% of our sales.

Our real estate strategy in [removed: 2014] [added: 2015] is to open stores in states where we currently [removed: operate] [added: operate,] to increase our market penetration and [removed: to] reduce overhead and advertising expenses as a percentage of sales in each market.

We also expect to continue our store expansion in newer markets in [removed: 2014.][added: 2015.]

The following table summarizes the locations of our stores by state/territory as of [removed: February 1, 2014] [added: January 31, 2015] and February [removed: 2, 2013.][added: 1, 2014.]

| State/Territory | | [removed: February 1, 2014 |] [added: January 31, 2015] | | February [removed: 2, 2013 |] [added: 1, 2014] |

| Alabama | | [removed: 20 |] [added: 19] | | 20 | [removed: |]

| Arizona | | [removed: 67 | |] [added: 68] | [removed: 64] | [added: 67] |

| Arkansas | | [removed: 4 |] [added: 6] | | 4 | [removed: |]

| California | | [removed: 315 | |] [added: 335] | [removed: 304] | [added: 315] |

| Colorado | | [removed: 27 | |] [added: 30] | [removed: 29] | [added: 27] |

| Delaware | | 1 | | [removed: |] 1 | [removed: |]

| District of Columbia | | 1 | | [removed: |] 1 | [removed: |]

| Florida | | [removed: 156 | |] [added: 166] | [removed: 145] | [added: 156] |

| Georgia | | 51 | | [removed: | 48 |] [added: 51] |

| Guam | | 1 | | [removed: |] 1 | [removed: |]

| Hawaii | | [removed: 15 | |] [added: 17] | [removed: 13] | [added: 15] |

| Idaho | | 10 | | [removed: |] 10 | [removed: |]

| Illinois | | [removed: 37 | |] [added: 49] | [removed: 23] | [added: 37] |

| Indiana | | [removed: 2 | |] [added: 5] | [removed: 1] | [added: 2] |

| Kansas | | [removed: 4 | |] [added: 6] | [removed: 2] | [added: 4] |

| Kentucky | | [removed: 3 | |] [added: 5] | [removed: 2] | [added: 3] |

| Louisiana | | [removed: 13 | |] [added: 14] | [removed: 12] | [added: 13] |

| Maryland | | [removed: 22 | |] [added: 23] | [removed: 20] | [added: 22] |

| Mississippi | | [removed: 6 | |] [added: 8] | [removed: 5] | [added: 6] |

| Missouri | | [removed: 14 | |] [added: 16] | [removed: 8] | [added: 14] |

| Montana | | 6 | | [removed: |] 6 | [removed: |]

| Nevada | | [removed: 29 | |] [added: 31] | [removed: 28] | [added: 29] |

| New Jersey | | [removed: 11 |] [added: 13] | | 11 | [removed: |]

| New Mexico | | [removed: 9 | |] [added: 10] | [removed: 8] | [added: 9] |

| North Carolina | | [removed: 36 | |] [added: 38] | [removed: 34] | [added: 36] |

| Oklahoma | | [removed: 19 |] [added: 20] | | 19 | [removed: |]

| Oregon | | [removed: 28 | |] [added: 31] | [removed: 26] | [added: 28] |

| Pennsylvania | | [removed: 39 | |] [added: 43] | [removed: 40] | [added: 39] |

| South Carolina | | [removed: 22 | |] [added: 21] | [removed: 20] | [added: 22] |

| Tennessee | | 29 | | [removed: | 26 |] [added: 29] |

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| Shafter, California¹ | | 1,700,000 | | | Own |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | |

| Pleasanton, California4 | | 192,000 | | | Lease |

| Truck trailer parking lots | | | | | |

| Perris, California | | 10 acres | | | Lease |

| Moreno Valley, California | | 20 acres | | | Lease |

²We are currently in the process of completing construction of these warehouses with an estimated occupancy of 2014.

³We plan to purchase our New York buying office in 2014.

4Our former corporate headquarters is leased under several facility leases the majority of which expire in June 2014.

The lease term for the remaining space of approximately 11,000 square feet expires in March 2015.

We do not plan to renew any of these leases.

In January 2014, we moved to our current corporate headquarters in Dublin, California.

| Michael Balmuth | | [removed: 63] [added: 64] | | | [removed: Vice Chairman and Chief] Executive [removed: Officer] [added: Chairman of the Board] |

| James S. Fassio | | [removed: 59] [added: 60] | | | President and Chief Development Officer |

| Michael O’Sullivan | | [removed: 50] [added: 51] | | | President and Chief Operating Officer |

| [removed: Barbara Rentler] [added: Lisa Panattoni] | | [removed: 56] [added: 52] | | | [removed: President and Chief Merchandising Officer,] [added: President, Merchandising,] Ross Dress for Less |

| John G. Call | | [removed: 55] [added: 56] | | | Executive Vice President, Finance and Legal, and Corporate Secretary |

| Michael J. Hartshorn | | [removed: 46] [added: 47] | | | [added: Group] Senior Vice President, Chief Financial Officer and Principal Accounting Officer |

[removed: From February 2005 to December 2009, he] [added: He] also served as [removed: President.][added: President from 2005 to 2009.]

[removed: He] [added: Previously, Mr. Balmuth] was Executive Vice President, Merchandising from [removed: July] 1993 to [removed: September] 1996 and Senior Vice President and General Merchandise Manager from [removed: November] 1989 to [removed: July] 1993.

Before joining Ross, he was Senior Vice President and General Merchandising Manager at Bon Marché in Seattle from [removed: September] 1988 to [removed: November 1989.][added: 1989 and Executive Vice President and General Merchandising Manager for Karen Austin Petites from 1986 to 1988.]

Mr. [removed: Baker] [added: Fassio] has served as President and Chief [removed: Merchandising Officer, dd’s DISCOUNTS,] [added: Development Officer] since [removed: March 2011.][added: 2009.]

[removed: He was Executive Vice President, Merchandising dd’s DISCOUNTS from June 2009] [added: From 2006] to [removed: March 2011 and] [added: 2009, Mr. Brautigan was] Senior Vice President and General Merchandise Manager [added: and Group Vice President] of [removed: dd's DISCOUNTS] [added: Shoes] from [removed: December 2006] [added: 2003] to [removed: June 2009.][added: 2006.]

Prior to [removed: this,] [added: that,] he was Executive Vice President, Property Development, Construction and Store Design from [removed: February] 2005 to [removed: December 2009.][added: 2009 and Senior Vice President, Property Development, Construction and Store Design from 1991 to 2005.]

He joined the Company in [removed: June] 1988 as Vice President of Real Estate.

From [removed: February] 2005 to [removed: December] 2009, he [removed: served as] [added: was] Executive Vice President and Chief Administrative [removed: Officer, after joining Ross in September 2003 as] [added: Officer and] Senior Vice President, Strategic Planning and [removed: Marketing.][added: Marketing from 2003 to 2005.]

[removed: From 1991 to 2003,] [added: Before joining Ross,] Mr. O’Sullivan was [added: a partner] with Bain & Company, [removed: most recently as a partner,] providing consulting advice to retail, consumer goods, financial services and private equity [removed: clients.][added: clients since 1991.]

Ms. [removed: Rentler] [added: Panattoni] has served as [removed: President and Chief Merchandising Officer,] [added: President, Merchandising,] Ross Dress for [removed: Less,] [added: Less] since [removed: December 2009,] [added: June 2014] with responsibility for all [removed: merchandising categories at Ross.][added: of the Home businesses, Men’s, Junior Sportswear, Lingerie, and Cosmetics.]

From [removed: December 2006] [added: 2009] to [removed: December 2009,] [added: May 2014,] she was [added: President and Chief Merchandising Officer, Ross Dress for Less and] Executive Vice President, Merchandising, [removed: with responsibility for all Ross Apparel and Apparel-related products.][added: from 2006 to 2009.]

She also served [added: at dd’s DISCOUNTS] as Executive Vice President and Chief Merchandising Officer [removed: of dd’s DISCOUNTS] from [removed: February] 2005 to [removed: December 2006,] [added: 2006 and] Senior Vice President and Chief Merchandising Officer [removed: of dd's DISCOUNTS] from [removed: January] 2004 to [removed: February 2005 and Senior Vice President and General Merchandise Manager at Ross Dress for Less from February 2001 to January 2004.][added: 2005.]

Prior to that, she held various merchandising positions since joining the Company in [removed: February] 1986.

She joined the Company in [removed: January] 2005 as Senior Vice President and General Merchandise Manager of [removed: Ross] Home and was promoted to Executive Vice President [removed: in October 2005.][added: later that same year.]

From [removed: February] 2012 to [removed: February] 2014, Mr. Call was Group Senior Vice President and Chief Financial Officer, with [added: additional] oversight for Legal and the Corporate Secretary [removed: function added in November 2012.][added: function.]

From [removed: June] 1997 to [removed: January] 2012, he was Senior Vice President and Chief Financial Officer and also served as Corporate Secretary from [removed: June] 1997 to [removed: February] 2009.

For [removed: five] [added: ten] years prior to joining Friedman’s, Mr. Call held various positions with Ernst & Young LLP.

Mr. Hartshorn has served as [added: Group] Senior Vice President, Chief Financial Officer since [removed: February 2014.][added: March 2015.]

[removed: He] [added: Previously, he] was Senior Vice President and [added: Chief Financial Officer from 2014 to March 2015, Senior Vice President and] Deputy Chief Financial Officer from [removed: January] 2012 to [removed: February 2014.][added: 2014, Group Vice President, Finance and Treasurer from 2011 to 2012, and Vice President, Finance and Treasurer from 2006 to 2011.]

From 2002 to 2006, he held a number of management roles in [removed: our information technology] [added: the Ross IT] and supply chain organizations.

| Barbara Rentler | | 57 | | | Chief Executive Officer |

| Bernie Brautigan | | 50 | | | Group Executive Vice President, Merchandising, Ross Dress for Less |

Mr. Balmuth has served as Executive Chairman of the Board of Directors since June 2014.

From 1996 to May 2014, he was Vice Chairman of the Board of Directors and Chief Executive Officer.

Ms. Rentler has served as Chief Executive Officer and a member of the Board of Directors since June 2014.

Mr. O’Sullivan has served as President and Chief Operating Officer since 2009 and a member of the Board of Directors since June 2014.

Previously, she was Group Executive Vice President, Merchandising at Ross from 2009 to May 2014.

Mr. Brautigan has served as Group Executive Vice President, Merchandising, Ross Dress for Less since June 2014, with responsibility for Ladies and Children’s apparel, Shoes, Accessories, and Jewelry.

Previously, he was Executive Vice President of Merchandising at Ross from 2009 to May 2014.

Prior to Ross, he spent 20 years in various merchandising positions at Macy’s East.

| Douglas Baker | | 55 | | | President and Chief Merchandising Officer, dd’s DISCOUNTS |

| Lisa Panattoni | | 51 | | | Group Executive Vice President, Merchandising |

Mr. Balmuth joined the Board of Directors as Vice Chairman and became Chief Executive Officer in September 1996.

From April 1986 to September 1988, he served as Executive Vice President and General Merchandising Manager for Karen Austin Petites.

Mr. Baker joined Ross in November 1995 as Vice President and Divisional Merchandise Manager.

Prior to joining Ross, he worked for Value City Department Stores from 1984 to 1995.

His previous retail experience also includes Marshalls and Hills Department Stores.

Mr. Fassio became President and Chief Development Officer in December 2009.

From March 1991 to February 2005, he served as Senior Vice President, Property Development, Construction and Store Design.

Mr. O’Sullivan became President and Chief Operating Officer in December 2009.

Ms. Panattoni was named Group Executive Vice President, Merchandising for Ross Home and Men’s in December 2009.

Prior to this, he was Group Vice President, Finance and Treasurer from March 2011 to January 2012 and Vice President, Finance and Treasurer from April 2006 to March 2011.

There were [removed: 822] [added: 817] stockholders of record as of March [removed: 12, 2014] [added: 9, 2015] and the closing stock price on that date was [removed: $72.38] [added: $105.45] per share.

In February [removed: 2014,] [added: 2015,] our Board of Directors declared a quarterly cash dividend of [removed: $0.20] [added: $0.235] per common share, payable on March 31, [removed: 2014.][added: 2015.]

Our Board of Directors declared cash dividends of [removed: $0.17] [added: $0.20] per common share in [removed: January,] [added: February,] May, August, and November [removed: 2013,] [added: 2014,] cash dividends of [removed: $0.14] [added: $0.17] per common share in January, May, August, and November [removed: 2012,] [added: 2013,] and cash dividends of [removed: $0.11] [added: $0.14] per common share in January, May, August, and November [removed: 2011.][added: 2012.]

Information regarding shares of common stock we repurchased during the fourth quarter of fiscal [removed: 2013] [added: 2014] is as follows:

| [removed: |] Period | | Total number of shares (or units) purchased¹ | | | Average price paid per share (or unit) | | Total number of shares (or units) purchased as part of publicly announced plans or programs | | | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs ($000) | |

| [removed: |] November | | | | | | | | | | | |

| [removed: |] December | | | | | | | | | | | |

| [removed: |] January | | | | | | | | | | | |

| [removed: 1 | |] [added: ¹] We acquired [removed: 10,095] [added: 4,110] shares of treasury stock during the quarter ended [removed: February 1, 2014.] [added: January 31, 2015.] Treasury stock includes shares purchased from employees for tax withholding purposes related to vesting of restricted stock grants. All remaining shares were repurchased under our publicly announced stock repurchase program. |

[removed: | 2 | |] In [removed: January 2013,] [added: February 2015,] our Board of Directors approved a [added: new] two-year [removed: $1.1] [added: $1.4] billion stock repurchase program for fiscal [removed: 2013] [added: 2015] and [removed: 2014. |][added: 2016.]

[removed: ][added: ]

| Company / Index | | [removed: 2009 | | |] 2010 | | | 2011 | | | 2012 | | | 2013 | | | 2014 | | [added: | 2015 | |]

Stock dividends.

In March 2015, our Board of Directors approved a two-for-one stock split in the form of a 100 percent stock dividend, to be paid on June 11, 2015 to stockholders of record as of April 22, 2015.

The stock split will not have an impact on our consolidated financial position or results of operations.

Share and per share amounts have not been restated to reflect the pending stock split.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| (11/02/2014 - 11/29/2014) | | 377,109 | | | $83.30 | | 373,384 | | | $100,400 | |

| (11/30/2014 - 01/03/2015) | | 599,206 | | | $91.83 | | 598,944 | | | $45,400 | |

| (01/04/2015 - 01/31/2015) | | 484,038 | | | $93.89 | | 483,915 | | | — | |

| Total | | 1,460,353 | | | $90.31 | | 1,456,243 | | | $0 | |

| |

| --- |

| |

| Ross Stores, Inc. | | 100 | | | 144 | | | 228 | | | 267 | | | 309 | | | 421 | |

| S&P 500 Index | | 100 | | | 122 | | | 127 | | | 149 | | | 181 | | | 206 | |

| S&P Retailing Group | | 100 | | | 130 | | | 151 | | | 196 | | | 248 | | | 297 | |

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | (11/03/2013 - 11/30/2013) | | 331,931 | | | $77.98 | | 329,948 | | | $652,900 | |

| | (12/01/2013 - 01/04/2014) | | 799,775 | | | $73.11 | | 791,782 | | | $595,000 | |

| | (01/05/2014 - 02/01/2014) | | 633,334 | | | $71.11 | | 633,215 | | | $550,000 | |

| | Total | | 1,765,040 | | | $73.31 | | 1,754,945 | | | $550,000 | ² |

| | | |

| --- | --- | --- |

| Ross Stores, Inc. | | 100 | | | 158 | | | 228 | | | 360 | | | 422 | | | 487 | |

| S&P 500 Index | | 100 | | | 133 | | | 163 | | | 170 | | | 198 | | | 241 | |

| S&P Retailing Group | | 100 | | | 158 | | | 205 | | | 238 | | | 307 | | | 388 | |

| ($000, except per share data) | [removed: 2013] [added: 2014] | | | | [removed: 2012¹] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | [added: ¹] | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| Sales | $ | [removed: 10,230,353] [added: 11,041,677] | | | $ | [removed: 9,721,065] [added: 10,230,353] | | | $ | [removed: 8,608,291] [added: 9,721,065] | | | $ | [removed: 7,866,100] [added: 8,608,291] | | | $ | [removed: 7,184,213] [added: 7,866,100] | |

| Cost of goods sold | [removed: 7,360,924] [added: 7,937,956] | | | | [removed: 7,011,428] [added: 7,360,924] | | | | [removed: 6,240,760] [added: 7,011,428] | | | | [removed: 5,729,735] [added: 6,240,760] | | | | [removed: 5,327,278] [added: 5,729,735] | | |

| Percent of sales | [removed: 72.0] [added: 71.9] | | % | | [removed: 72.1] [added: 72.0] | | % | | [removed: 72.5] [added: 72.1] | | % | | [removed: 72.8] [added: 72.5] | | % | | [removed: 74.2] [added: 72.8] | | % |

| Selling, general and administrative | [removed: 1,526,366] [added: 1,615,371] | | | | [removed: 1,437,886] [added: 1,526,366] | | | | [removed: 1,304,065] [added: 1,437,886] | | | | [removed: 1,229,775] [added: 1,304,065] | | | | [removed: 1,130,813] [added: 1,229,775] | | |

| Percent of sales | [removed: 14.9] [added: 14.6] | | % | | [removed: 14.8] [added: 14.9] | | % | | [removed: 15.2] [added: 14.8] | | % | | [removed: 15.6] [added: 15.2] | | % | | [removed: 15.7] [added: 15.6] | | % |

| Interest [removed: (income) expense,] [added: expense (income),] net | [added: 2,984 | | | |] (247 | | ) | | 6,907 | | | | 10,322 | | | | 9,569 | | | [removed: | 7,593 | | |]

| Earnings before taxes | [removed: 1,343,310] [added: 1,485,366] | | | | [removed: 1,264,844] [added: 1,343,310] | | | | [removed: 1,053,144] [added: 1,264,844] | | | | [removed: 897,021] [added: 1,053,144] | | | | [removed: 718,529] [added: 897,021] | | |

| Percent of sales | [removed: 13.1] [added: 13.5] | | % | | [removed: 13.0] [added: 13.1] | | % | | [removed: 12.2] [added: 13.0] | | % | | [removed: 11.4] [added: 12.2] | | % | | [removed: 10.0] [added: 11.4] | | % |

| Provision for taxes on earnings | [removed: 506,006] [added: 560,642] | | | | [removed: 478,081] [added: 506,006] | | | | [removed: 395,974] [added: 478,081] | | | | [removed: 342,224] [added: 395,974] | | | | [removed: 275,772] [added: 342,224] | | |

| Net earnings | [removed: 837,304] [added: 924,724] | | | | [removed: 786,763] [added: 837,304] | | | | [removed: 657,170] [added: 786,763] | | | | [removed: 554,797] [added: 657,170] | | | | [removed: 442,757] [added: 554,797] | | |

| Percent of sales | [removed: 8.2] [added: 8.4] | | % | | [removed: 8.1] [added: 8.2] | | % | | [removed: 7.6] [added: 8.1] | | % | | [removed: 7.1] [added: 7.6] | | % | | [removed: 6.2] [added: 7.1] | | % |

| Basic earnings per share² | $ | [removed: 3.93] [added: 4.47] | | | $ | [removed: 3.59] [added: 3.93] | | | $ | [removed: 2.91] [added: 3.59] | | | $ | [removed: 2.35] [added: 2.91] | | | $ | [removed: 1.80] [added: 2.35] | |

| Diluted earnings per share² | $ | [removed: 3.88] [added: 4.42] | | | $ | [removed: 3.53] [added: 3.88] | | | $ | [removed: 2.86] [added: 3.53] | | | $ | [removed: 2.31] [added: 2.86] | | | $ | [removed: 1.77] [added: 2.31] | |

| ($000, except per share data) | | [removed: 2013] [added: 2014] | | | | [removed: 2012¹] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | [added: ¹] | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| Cash and cash equivalents | | $ | [removed: 423,168] [added: 696,608] | | | $ | [removed: 646,761] [added: 423,168] | | | $ | [removed: 649,835] [added: 646,761] | | | $ | [removed: 833,924] [added: 649,835] | | | $ | [removed: 768,343] [added: 833,924] | |

| Merchandise inventory | | [removed: 1,257,155] [added: 1,372,675] | | | | [removed: 1,209,237] [added: 1,257,155] | | | | [removed: 1,130,070] [added: 1,209,237] | | | | [removed: 1,086,917] [added: 1,130,070] | | | | [removed: 872,498] [added: 1,086,917] | | |

| Property and equipment, net | | [removed: 1,875,299] [added: 2,273,752] | | | | [removed: 1,493,284] [added: 1,875,299] | | | | [removed: 1,241,722] [added: 1,493,284] | | | | [removed: 983,776] [added: 1,241,722] | | | | [removed: 942,999] [added: 983,776] | | |

| Total assets | | [removed: 3,896,797] [added: 4,703,134] | | | | [removed: 3,670,561] [added: 3,896,797] | | | | [removed: 3,301,209] [added: 3,670,561] | | | | [removed: 3,116,204] [added: 3,301,209] | | | | [removed: 2,768,633] [added: 3,116,204] | | |

| Return on average assets | | 22 | | % | | [removed: 23] [added: 22] | | % | | [removed: 20] [added: 23] | | % | | [removed: 19] [added: 20] | | % | | [removed: 17] [added: 19] | | % |

| Working capital | | [removed: 474,102] [added: 603,422] | | | | [removed: 608,845] [added: 474,102] | | | | [removed: 578,319] [added: 608,845] | | | | [removed: 690,919] [added: 578,319] | | | | [removed: 554,933] [added: 690,919] | | |

| Current ratio | | [removed: 1.3:1] [added: 1.4:1] | | | | [removed: 1.4:1] [added: 1.3:1] | | | | 1.4:1 | | | | [removed: 1.5:1] [added: 1.4:1] | | | | 1.5:1 | | |

| Long-term debt | | [removed: 150,000] [added: 398,375] | | | | 150,000 | | | | 150,000 | | | | 150,000 | | | | 150,000 | | |

| of total capitalization | | [removed: 7] [added: 15] | | % | | [removed: 8] [added: 7] | | % | | [removed: 9] [added: 8] | | % | | [removed: 10] [added: 9] | | % | | [removed: 11] [added: 10] | | % |

| Stockholders' equity | | [removed: 2,007,302] [added: 2,279,210] | | | | [removed: 1,766,863] [added: 2,007,302] | | | | [removed: 1,493,012] [added: 1,766,863] | | | | [removed: 1,332,692] [added: 1,493,012] | | | | [removed: 1,157,293] [added: 1,332,692] | | |

| stockholders' equity | | [removed: 44] [added: 43] | | % | | [removed: 48] [added: 44] | | % | | [removed: 47] [added: 48] | | % | | [removed: 45] [added: 47] | | % | | [removed: 41] [added: 45] | | % |

| outstanding at year-end² | | $ | [removed: 9.41] [added: 10.99] | | | $ | [removed: 8.00] [added: 9.41] | | | $ | [removed: 6.58] [added: 8.00] | | | $ | [removed: 5.64] [added: 6.58] | | | $ | [removed: 4.71] [added: 5.64] | |

| Number of stores opened | | [removed: 88] [added: 95] | | | | [removed: 82] [added: 88] | | | | [removed: 80] [added: 82] | | | | [removed: 56] [added: 80] | | | | 56 | | |

| Number of stores closed | | [removed: 11] [added: 9] | | | | [removed: 8] [added: 11] | | | | [removed: 10] [added: 8] | | | | [removed: 6] [added: 10] | | | | [removed: 7] [added: 6] | | |

| Number of stores at year-end | | [removed: 1,276] [added: 1,362] | | | | [removed: 1,199] [added: 1,276] | | | | [removed: 1,125] [added: 1,199] | | | | [removed: 1,055] [added: 1,125] | | | | [removed: 1,005] [added: 1,055] | | |

| (52-week basis) | | 3 | | % | | [removed: 6] [added: 3] | | % | | [removed: 5] [added: 6] | | % | | 5 | | % | | [removed: 6] [added: 5] | | % |

| selling space (52-week basis) | | $ | [removed: 362] [added: 372] | | | $ | [removed: 355] [added: 362] | | | $ | [removed: 338] [added: 355] | | | $ | [removed: 324] [added: 338] | | | $ | [removed: 311] [added: 324] | |

| at year-end (000) | | [removed: 28,900] [added: 30,400] | | | | [removed: 27,800] [added: 28,900] | | | | [removed: 26,100] [added: 27,800] | | | | [removed: 24,800] [added: 26,100] | | | | [removed: 23,700] [added: 24,800] | | |

| Number of employees at year-end | | [removed: 66,300] [added: 71,400] | | | | [removed: 57,500] [added: 66,300] | | | | [removed: 53,900] [added: 57,500] | | | | [removed: 49,500] [added: 53,900] | | | | [removed: 45,600] [added: 49,500] | | |

| of record at year-end | | [removed: 823] [added: 817] | | | | [removed: 831] [added: 823] | | | | [removed: 817] [added: 831] | | | | [removed: 804] [added: 817] | | | | [removed: 767] [added: 804] | | |

| per common share² | $ | 0.80 | | | $ | 0.51 | | ³ | $ | 0.59 | | | $ | 0.47 | | | $ | 0.35 | |

| per common share² | $ | 0.510 | | ³ | $ | 0.590 | | | $ | 0.470 | | | $ | 0.350 | | | $ | 0.245 | |

| | | | | | | | | | | | | | | | | | | | | |

| ($000, except per share data) | | [added: January 31, 2015 | | | |] February 1, 2014 | | | | February 2, 2013 | | | [removed: | January 28, 2012 | | |]

| Sales | | $ | [removed: 10,230,353] [added: 11,041,677] | | | $ | [removed: 9,721,065] [added: 10,230,353] | | | $ | [removed: 8,608,291] [added: 9,721,065] | |

| [removed: Costs] [added: Cost] of goods sold | | [removed: 7,360,924] [added: 7,937,956] | | | | [removed: 7,011,428] [added: 7,360,924] | | | | [removed: 6,240,760] [added: 7,011,428] | | |

| Selling, general and administrative | | [removed: 1,526,366] [added: 1,615,371] | | | | [removed: 1,437,886] [added: 1,526,366] | | | | [removed: 1,304,065] [added: 1,437,886] | | |

| Interest [removed: (income) expense,] [added: expense (income),] net | | [removed: (247] [added: 2,984] | | [removed: )] | | [removed: 6,907] [added: (247] | | [added: )] | | [removed: 10,322] [added: 6,907] | | |

| Total costs and expenses | | [removed: 8,887,043] [added: 9,556,311] | | | | [removed: 8,456,221] [added: 8,887,043] | | | | [removed: 7,555,147] [added: 8,456,221] | | |

| Earnings before taxes | | [removed: 1,343,310] [added: 1,485,366] | | | | [removed: 1,264,844] [added: 1,343,310] | | | | [removed: 1,053,144] [added: 1,264,844] | | |

| Provision for taxes on earnings | | [removed: 506,006] [added: 560,642] | | | | [removed: 478,081] [added: 506,006] | | | | [removed: 395,974] [added: 478,081] | | |

| Net earnings | | $ | [removed: 837,304] [added: 924,724] | | | $ | [removed: 786,763] [added: 837,304] | | | $ | [removed: 657,170] [added: 786,763] | |

| Basic | | $ | [removed: 3.93] [added: 4.47] | | | $ | [removed: 3.59] [added: 3.93] | | | $ | [removed: 2.91] [added: 3.59] | |

| Diluted | | $ | [removed: 3.88] [added: 4.42] | | | $ | [removed: 3.53] [added: 3.88] | | | $ | [removed: 2.86] [added: 3.53] | |

| Basic | | [removed: 212,881] [added: 206,777] | | | | [removed: 219,130] [added: 212,881] | | | | [removed: 225,915] [added: 219,130] | | |

| Diluted | | [removed: 215,805] [added: 209,039] | | | | [removed: 222,784] [added: 215,805] | | | | [removed: 229,982] [added: 222,784] | | |

| ($000) | | [added: January 31, 2015 | | | |] February 1, 2014 | | | | February 2, 2013 | | | [removed: | January 28, 2012 | | |]

| Change in unrealized [removed: (loss) gain] [added: loss] on investments, net of tax | | [removed: (196] [added: (59] | | ) | | [removed: (50] [added: (196] | | ) | | [removed: 147] [added: (50] | | [added: )] |

| Comprehensive income | | $ | [removed: 837,108] [added: 924,665] | | | $ | [removed: 786,713] [added: 837,108] | | | $ | [removed: 657,317] [added: 786,713] | |

| ($000, except share data) | [removed: February 1, 2014] [added: January 31, 2015] | | | | February [removed: 2, 2013] [added: 1, 2014] | | |

| Cash and cash equivalents | $ | [removed: 423,168] [added: 696,608] | | | $ | [removed: 646,761] [added: 423,168] | |

| Short-term investments | [removed: 12,006] [added: 500] | | | | [removed: 1,087] [added: 12,006] | | |

| Accounts receivable | [removed: 62,612] [added: 73,278] | | | | [removed: 59,617] [added: 62,612] | | |

| Merchandise inventory | [removed: 1,257,155] [added: 1,372,675] | | | | [removed: 1,209,237] [added: 1,257,155] | | |

| Prepaid expenses and other | [removed: 101,991] [added: 106,778] | | | | [removed: 94,318] [added: 101,991] | | |

| Deferred income taxes | [removed: 10,227] [added: 12,951] | | | | [removed: 20,407] [added: 10,227] | | |

| Total current assets | [removed: 1,867,159] [added: 2,262,790] | | | | [removed: 2,031,427] [added: 1,867,159] | | |

| Land and buildings | [removed: 478,973] [added: 952,428] | | | | [removed: 372,659] [added: 478,973] | | |

| Fixtures and equipment | [removed: 1,678,397] [added: 1,933,383] | | | | [removed: 1,551,590] [added: 1,678,397] | | |

| Leasehold improvements | [removed: 813,972] [added: 854,572] | | | | [removed: 732,671] [added: 813,972] | | |

| Construction-in-progress | [removed: 510,221] [added: 293,715] | | | | [removed: 258,691] [added: 510,221] | | |

| Less accumulated depreciation and amortization | [removed: 1,606,264] [added: 1,760,346] | | | | [removed: 1,422,327] [added: 1,606,264] | | |

| Property and equipment, net | [removed: 1,875,299] [added: 2,273,752] | | | | [removed: 1,493,284] [added: 1,875,299] | | |

| Long-term investments | [removed: 3,710] [added: 3,110] | | | | [removed: 4,374] [added: 3,710] | | |

| Other long-term assets | [removed: 150,629] [added: 163,482] | | | | [removed: 141,476] [added: 150,629] | | |

| Total assets | $ | [removed: 3,896,797] [added: 4,703,134] | | | $ | [removed: 3,670,561] [added: 3,896,797] | |

| Accounts payable | $ | [removed: 779,455] [added: 1,000,700] | | | $ | [removed: 807,534] [added: 779,455] | |

| Accrued expenses and other | [removed: 359,929] [added: 385,325] | | | | [removed: 320,415] [added: 359,929] | | |

| Accrued payroll and benefits | [removed: 235,324] [added: 256,141] | | | | [removed: 241,129] [added: 235,324] | | |

| Income taxes payable | [removed: 18,349] [added: 17,202] | | | | [removed: 53,504] [added: 18,349] | | |

| Total current liabilities | [removed: 1,393,057] [added: 1,659,368] | | | | [removed: 1,422,582] [added: 1,393,057] | | |

| Long-term debt | [removed: 150,000] [added: 398,375] | | | | 150,000 | | |

| Other long-term liabilities | [removed: 287,567] [added: 279,500] | | | | [removed: 246,815] [added: 287,567] | | |

| | 4,034,098 | | | | 3,481,563 | | |

| Net earnings | | — | | | — | | | | — | | | | — | | | | — | | | 924,724 | | | | 924,724 | | |

| used for tax withholding | | 1,453 | | | 15 | | | | 21,963 | | | | (39,041 | | ) | | — | | | — | | | | (17,063 | | ) |

| Common stock repurchased | | (7,403 | ) | | (74 | | ) | | (24,633 | | ) | | — | | | | — | | | (525,293 | | ) | | (550,000 | | ) |

| Dividends declared ($0.80 per share) | | — | | | — | | | | — | | | | — | | | | — | | | (168,454 | | ) | | (168,454 | | ) |

| Balance at January 31, 2015 | | 207,470 | | | $ | 2,075 | | | $ | 1,015,681 | | | $ | (160,600 | ) | | $330 | | | $ | 1,421,724 | | | $ | 2,279,210 | |

| Net earnings | $ | 924,724 | | | $ | 837,304 | | | $ | 786,763 | |

| Net proceeds from issuance of long-term debt | 245,676 | | | | — | | | | — | | |

| ($000) | | 2014 | | | | 2013 | | |

| ($000) | | 2014 | | | | 2013 | | |

| ($000) | | 2014 | | | | 2013 | | |

| ($000) | | 2014 | | | | 2013 | | |

| January 31, 2015 | | $ | 7,431 | | | $ | 717,040 | | | $ | (715,877 | ) | | $ | 8,594 | |

ASC 740 clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s consolidated financial statements.

| Shares | | 206,777 | | | | 2,262 | | | | 209,039 | | |

| Amount | | $ | 4.47 | | | $ | (0.05 | ) | | $ | 4.42 | |

Recently issued accounting standards.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized.

The core principle of the guidance is that a company should recognize revenue when the customer obtains control of promised goods or services in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services.

ASU 2014-09 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2017.

The Company is currently evaluating the effect that adoption of this new guidance will have on its consolidated financial statements.

| Corporate securities | $ | 3,298 | | | $ | 243 | | | $ | (5 | ) | | $ | 3,536 | | | | $ | 500 | | | $ | 3,036 | |

| Total investments | 3,367 | | | | 248 | | | | (5 | | ) | | 3,610 | | | | | 500 | | | | 3,110 | | |

| Total restricted investments | 3,563 | | | | 265 | | | | — | | | | 3,828 | | | | | — | | | | 3,828 | | |

| Total | $ | 6,930 | | | $ | 513 | | | $ | (5 | ) | | $ | 7,438 | | | | $ | 500 | | | $ | 6,938 | |

| Total | $ | 7,438 | | | $ | 3,828 | | | $ | 3,610 | | | $ | — | |

| Total | $ | 3,367 | | | $ | 3,610 | | | $ | 3,563 | | | $ | 3,828 | |

| ($000) | 2014 | | | | 2013 | | |

| Level 1 | $ | 81,926 | | | $ | 76,913 | |

| Level 2 | 12,128 | | | | 11,356 | | |

| Total | $ | 94,054 | | | $ | 88,269 | |

| Total | $ | 53,001 | | | $ | 46,847 | | | $ | 48,952 | |

Unsecured senior debt, net of unamortized discounts, as of January 31, 2015 and February 1, 2014 consisted of the following:

| ($000) | | 2014 | | | | 2013 | | |

| 6.38% Series A Senior Notes due 2018 | | $ | 85,000 | | | $ | 85,000 | |

| 6.53% Series B Senior Notes due 2021 | | 65,000 | | | | 65,000 | | |

| 3.375% Senior Notes due 2024¹ | | 248,375 | | | | — | | |

| Total | | $ | 398,375 | | | $ | 150,000 | |

¹Net of unamortized discount of $1.6 million at January 31, 2015.

| | 3,481,563 | | | | 2,915,611 | | |

| Balance at January 29, 2011 | | 236,126 | | | $ | 2,362 | | | $ | 739,545 | | | $ | (46,408 | ) | | $488 | | | $ | 636,705 | | | $ | 1,332,692 | |

| Net earnings | | — | | | — | | | | — | | | | — | | | | — | | | 657,170 | | | | 657,170 | | |

| used for tax withholding | | 2,002 | | | 20 | | | | 17,270 | | | | (15,854 | | ) | | — | | | — | | | | 1,436 | | |

| Common stock repurchased | | (11,264 | ) | | (113 | | ) | | (27,364 | | ) | | — | | | | — | | | (422,523 | | ) | | (450,000 | | ) |

Stock dividend.

On December 15, 2011 the Company issued a two\-for-one stock split in the form of a 100 percent stock dividend.

All share and per share amounts have been adjusted for the two-for-one stock split effective December 15, 2011.

assets, accounts payable, and other long-term liabilities approximates their estimated fair value.

Packaway inventory accounted for approximately 49% and 47%, of total inventories as of February 1, 2014 and February 2, 2013.

Computer hardware and software costs, net of depreciation, of $209.4 million and $166.2 million at February 1, 2014 and February 2, 2013, respectively, are included in fixtures and equipment and are amortized over their estimated useful life, generally ranging from three to seven years.

In July 2013, the Company purchased the land and building of its previously leased, 1.3 million square foot Perris, California distribution center for $70 million.

In October 2013, the Company entered into a Sale-Purchase Agreement under which it has the right to purchase the office building where its New York buying office is located for $222 million.

The building is subject to a 99 year ground lease through June 2111.

The Sale-Purchase Agreement contemplates completion of the sale and purchase of the building on or before September 20, 2014, subject to satisfaction of various closing conditions.

Under the Sale-Purchase

Agreement, the Company provided a deposit of 10% of the purchase price.

In the event the Company is unable or chooses not to complete the purchase of the building, the Company would forfeit the deposit but have no further liability to the seller or obligation to complete the purchase.

In September 2013, the Company deposited $11.1 million and provided an $11.1 million standby letter of credit to meet the 10% deposit obligation.

In January 2014, the Company deposited an additional $2.2 million in escrow for the building bringing the total deposit to $13.3 million.

The Company plans to finance the purchase of the building in 2014.

Other assets are principally comprised of prepaid rent and other long-term prepayments.

| January 28, 2012 | | $ | 5,869 | | | $ | 606,293 | | | $ | (605,736 | ) | | $ | 6,426 | |

| 2011 | | | | | | | | | | | | |

| Shares | | 225,915 | | | | 4,067 | | | | 229,982 | | |

| Amount | | $ | 2.91 | | | $ | (0.05 | ) | | $ | 2.86 | |

| Corporate securities | $ | 4,715 | | | $ | 468 | | | $ | (14 | ) | | $ | 5,169 | | | | $ | 1,013 | | | $ | 4,156 | |

| Total investments | 4,991 | | | | 484 | | | | (14 | | ) | | 5,461 | | | | | 1,087 | | | | 4,374 | | |

| Corporate securities | 1,360 | | | | 34 | | | | — | | | | 1,394 | | | | | 1,275 | | | | 119 | | |

| Total restricted investments | 5,108 | | | | 431 | | | | — | | | | 5,539 | | | | | 1,275 | | | | 4,264 | | |

| Total | $ | 10,099 | | | $ | 915 | | | $ | (14 | ) | | $ | 11,000 | | | | $ | 2,362 | | | $ | 8,638 | |

| Corporate securities | 1,394 | | | | — | | | | 1,394 | | | | — | | |

| Total | $ | 11,000 | | | $ | 4,145 | | | $ | 6,855 | | | $ | — | |

| Maturing after five years through ten years | — | | | | — | | | | 398 | | | | 424 | | |

| Total | $ | 15,389 | | | $ | 15,716 | | | $ | 3,838 | | | $ | 4,109 | |

| Level 1 | $ | 76.9 | | | $ | 65.9 | |

| Level 2 | 11.4 | | | | 11.0 | | |

| Total | $ | 88.3 | | | $ | 76.9 | |

As of February 1, 2014, the Company also had an $11.1 million standby letter of credit in connection with the New York buying office Sale-Purchase Agreement.

The Company leases a 10\-acre parcel for trailer parking adjacent to its Perris, California distribution center, that expires in 2017 and a 20\-acre facility located in Moreno Valley, California primarily for ancillary truck and trailer parking that expires in 2015.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in Internal Control — Integrated Framework [removed: (1992).][added: (2013).]

Based on our evaluation under the framework in Internal Control — Integrated Framework [removed: (1992),] [added: (2013),] our management concluded that our internal control over financial reporting was effective as of [removed: February 1, 2014.][added: January 31, 2015.]

Our internal control over financial reporting as of [removed: February 1, 2014] [added: January 31, 2015] has also been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and their opinion as to the effectiveness of our internal control over financial reporting is stated in their report, dated [removed: April 1, 2014,] [added: March 31, 2015,] which is included in Item 8 in this Annual Report on Form 10-K.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of our internal control over financial reporting to determine whether any change occurred during the fourth fiscal quarter of [removed: 2013] [added: 2014] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Information required by Item 401 of Regulation S-K is incorporated herein by reference to the sections entitled “Executive Officers of the Registrant” at the end of Part I of this report; and to the sections of the Ross Stores, Inc. Proxy Statement for the Annual Meeting of Stockholders to be held on Wednesday, May [removed: 21, 2014] [added: 20, 2015] (the “Proxy Statement”) entitled “Information Regarding Nominees and Incumbent Directors.” Information required by Item 405 of Regulation S-K is incorporated by reference to the Proxy Statement under the section titled “Section 16(a) Beneficial Ownership Reporting Compliance.” We have not made any material changes to the procedures by which our stockholders may recommend nominees to the Board of Directors.

Our Board of Directors has adopted a Code of Ethics for Senior Financial Officers that applies to the Company's [added: Executive Chairman;] Chief Executive [removed: Officer,] [added: Officer;] Chief [added: Operating Officer; Chief] Merchandising [removed: Officer,] [added: Officer;] Chief Development [removed: Officer, Chief Operating Officer,] [added: Officer;] Executive Vice President, Finance and [removed: Legal,] [added: Legal;] Chief Financial [removed: Officer,] [added: Officer;] Group Vice President, [added: Controller; Group Vice President,] Finance and [removed: Treasurer, Controller,] [added: Treasurer;] Vice President, Accounting and Assistant [removed: Controller,] [added: Controller;] Vice President [removed: Finance,] [added: Finance;] Vice President [removed: Tax,] [added: Tax;] Assistant [removed: Treasurer,] [added: Treasurer;] Investor and Media Relations [removed: personnel,] [added: personnel;] and other positions that may be designated by the Company.

The following table summarizes the equity compensation plans under which the Company’s common stock may be issued as of [removed: February 1, 2014:][added: January 31, 2015:]

| Shares in (000s) | | (a) Number of securities to be issued upon exercise of outstanding options and rights | | | (b) Weighted average exercise price per share of outstanding options and rights | | [added: |] (c) Number of securities remaining available for future issuance (excluding securities reflected in column (a))1 | | |

| Equity compensation plans | | | | | | | | | | [added: |]

| approved by security holders | | [removed: 1,421] [added: —] | | [removed: 2] | [removed: $14.04] [added: —] | | [removed: 7,844] | [added: —] | [removed: 3] | [added: |]

| Equity compensation plans not | | | | | | | | | | [added: |]

3 Includes [removed: 858,000] [added: 658,000] shares reserved for issuance under the Employee Stock Purchase Plan and [removed: 6,986,000] [added: 6,628,000] shares reserved for issuance under the 2008 Equity Incentive Plan.

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | |

| approved by security holders | | 662 | | 2 | $14.09 | | | 7,286 | | 3 |

| Total | | 662 | | | $14.09 | | | 7,286 | | |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| approved by security holders4 | | 42 | | | $14.81 | | — | | |

| Total | | 1,463 | | | $14.07 | | 7,844 | | |

4 Represents shares reserved for options granted under the prior 2000 Equity Incentive Plan, which was approved by the Company’s Board of Directors in March 2000.

Consolidated Statements of Earnings for the years ended [added: January 31, 2015,] February 1, 2014, [added: and] February 2, [removed: 2013, and January 28, 2012.][added: 2013.]

Consolidated Statements of Comprehensive Income for the years ended [added: January 31, 2015,] February 1, 2014, [added: and] February 2, [removed: 2013, and January 28, 2012.][added: 2013.]

Consolidated Balance Sheets at [removed: February 1, 2014] [added: January 31, 2015] and February [removed: 2, 2013.][added: 1, 2014.]

Consolidated Statements of Stockholders' Equity for the years ended [added: January 31, 2015,] February 1, 2014, [added: and] February 2, [removed: 2013, and January 28, 2012.][added: 2013.]

Consolidated Statements of Cash Flows for the years ended [added: January 31, 2015,] February 1, 2014, [added: and] February 2, [removed: 2013, and January 28, 2012.][added: 2013.]

| [added: Michael Balmuth] | | [removed: By:] | [removed: /s/Michael Balmuth] | [added: |]

| [removed: Michael Balmuth] [added: /s/Barbara Rentler] | | Chief Executive Officer, Director | | [added: March 31, 2015] |

| /s/Michael J. Hartshorn | | [added: Group] Senior Vice President, Chief Financial Officer, [removed: and] | | [removed: April 1, 2014] [added: March 31, 2015] |

| Michael J. Hartshorn | | [added: and] Principal Accounting Officer | | |

| /s/Norman A. Ferber | | Chairman [added: Emeritus] of the Board, Director | | [removed: April 1, 2014] [added: March 31, 2015] |

| /s/K. Gunnar Bjorklund | | Director | | [removed: April 1, 2014] [added: March 31, 2015] |

| /s/Michael J. Bush | | Director | | [removed: April 1, 2014] [added: March 31, 2015] |

| /s/Sharon D. Garrett | | Director | | [removed: April 1, 2014] [added: March 31, 2015] |

| /s/Larry S. Peiros | | Director | | [removed: April 1, 2014] [added: March 31, 2015] |

| MANAGEMENT CONTRACTS AND COMPENSATORY PLANS (EXHIBITS [removed: 10.3] [added: 10.5] - [removed: 10.44)] [added: 10.49)] | |

| [removed: 10.3] [added: 10.5] | Third Amended and Restated Ross Stores, Inc. 1992 Stock Option Plan, incorporated by reference to Exhibit 10.5 to the Form 10-K filed by Ross Stores, Inc. for its fiscal year ended January 29, 2000. |

| [removed: 10.4] [added: 10.6] | Amendment to Third Amended and Restated Ross Stores, Inc. 1992 Stock Option Plan, incorporated by reference to Exhibit 10.4 to the Form 10-Q filed by Ross Stores, Inc. for its quarter ended August 4, 2001. |