Item 1. FINANCIAL STATEMENTS

Condensed Consolidated Statements of Earnings

			Three Months Ended												Nine Months Ended
($000, except stores and per share data, unaudited)			October 29, 2022						October 30, 2021						October 29, 2022						October 30, 2021
Sales			$	4,565,489					$	4,574,541					$	13,481,598					$	13,895,595
Costs and Expenses
Cost of goods sold			3,424,046						3,326,004						10,020,027						9,935,271
Selling, general and administrative			693,367						725,761						2,029,926						2,118,602
Interest (income) expense, net			(2,802)						18,744						25,561						56,500
Total costs and expenses			4,114,611						4,070,509						12,075,514						12,110,373
Earnings before taxes			450,878						504,032						1,406,084						1,785,222
Provision for taxes on earnings			108,842						119,002						341,086						429,455
Net earnings			$	342,036					$	385,030					$	1,064,998					$	1,355,767
Earnings per share
Basic			$	1.00					$	1.10					$	3.09					$	3.85
Diluted			$	1.00					$	1.09					$	3.08					$	3.82
Weighted-average shares outstanding (000)
Basic			342,120						351,071						344,686						352,308
Diluted			343,720						353,081						346,212						354,477
Store count at end of period			2,019						1,924						2,019						1,924

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income

			Three Months Ended												Nine Months Ended
($000, unaudited)			October 29, 2022						October 30, 2021						October 29, 2022						October 30, 2021
Net earnings			$	342,036					$	385,030					$	1,064,998					$	1,355,767
Other comprehensive income			—						—						—						—
Comprehensive income			$	342,036					$	385,030					$	1,064,998					$	1,355,767

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Balance Sheets

($000, except share data, unaudited)			October 29, 2022						January 29, 2022						October 30, 2021
Assets
Current Assets
Cash and cash equivalents			$	3,906,490					$	4,922,365					$	5,259,595
Accounts receivable			168,483						119,247						158,765
Merchandise inventory			2,494,002						2,262,273						2,231,242
Prepaid expenses and other			192,214						169,291						195,309
Total current assets			6,761,189						7,473,176						7,844,911
Property and Equipment
Land and buildings			1,491,927						1,240,246						1,194,125
Fixtures and equipment			3,882,127						3,425,762						3,357,986
Leasehold improvements			1,402,653						1,332,687						1,317,979
Construction-in-progress			171,185						574,333						506,903
			6,947,892						6,573,028						6,376,993
Less accumulated depreciation and amortization			3,939,154						3,674,501						3,592,707
Property and equipment, net			3,008,738						2,898,527						2,784,286
Operating lease assets			3,101,882						3,027,272						3,032,175
Other long-term assets			228,286						241,281						254,362
Total assets			$	13,100,095					$	13,640,256					$	13,915,734
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable			$	1,927,757					$	2,372,302					$	2,652,881
Accrued expenses and other			616,753						613,089						625,426
Current operating lease liabilities			656,837						630,517						620,675
Accrued payroll and benefits			251,479						588,772						512,336
Income taxes payable			11,404						10,249						—
Current portion of long-term debt			—						—						64,991
Total current liabilities			3,464,230						4,214,929						4,476,309
Long-term debt			2,455,460						2,452,325						2,451,283
Non-current operating lease liabilities			2,596,221						2,539,297						2,551,162
Other long-term liabilities			223,162						236,013						296,819
Deferred income taxes			214,022						137,642						156,944
Commitments and contingencies
Stockholders’ Equity
Common stock, par value $.01 per share Authorized 1,000,000,000 shares Issued and outstanding 344,808,000, 351,720,000 and 353,694,000 shares, respectively			3,448						3,517						3,537
Additional paid-in capital			1,793,265						1,717,530						1,681,802
Treasury stock			(581,267)						(535,895)						(535,642)
Retained earnings			2,931,554						2,874,898						2,833,520
Total stockholders’ equity			4,147,000						4,060,050						3,983,217
Total liabilities and stockholders’ equity			$	13,100,095					$	13,640,256					$	13,915,734

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

						Nine Months Ended October 29, 2022
						Common stock												Additional paid-in capital						Treasury stock												Retained earnings
(000)						Shares						Amount																		Total
Balance at January 29, 2022						351,720						$	3,517					$	1,717,530					$	(535,895)											$	2,874,898					$	4,060,050
Net earnings						—						—						—						—												338,445						338,445
Common stock issued under stock
plans, net of shares
used for tax withholding						1,131						11						5,906						(38,113)												—						(32,196)
Stock-based compensation						—						—						36,071						—												—						36,071
Common stock repurchased						(2,524)						(25)						(10,266)						—												(229,274)						(239,565)
Dividends declared ($0.310 per share)						—						—						—						—												(108,908)						(108,908)
Balance at April 30, 2022						350,327						$	3,503					$	1,749,241					$	(574,008)											$	2,875,161					$	4,053,897
Net earnings						—						—						—						—												384,517						384,517
Common stock issued under stock
plans, net of shares
used for tax withholding						153						1						5,974						(521)												—						5,454
Stock-based compensation						—						—						26,803						—												—						26,803
Common stock repurchased						(2,928)						(29)						(12,594)						—												(222,812)						(235,435)
Dividends declared ($0.310 per share)						—						—						—						—												(108,285)						(108,285)
Balance at July 30, 2022						347,552						$	3,475					$	1,769,424					$	(574,529)											$	2,928,581					$	4,126,951
Net earnings						—						—						—						—												342,036						342,036
Common stock issued under stock
plans, net of shares
used for tax withholding						47						1						6,405						(6,738)												—						(332)
Stock-based compensation						—						—						29,493						—												—						29,493
Common stock repurchased						(2,791)						(28)						(12,057)						—												(231,608)						(243,693)
Dividends declared ($0.310 per share)						—						—						—						—												(107,455)						(107,455)
Balance at October 29, 2022						344,808						$	3,448					$	1,793,265					$	(581,267)											$	2,931,554					$	4,147,000
The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

						Nine Months Ended October 30, 2021
						Common stock												Additional paid-in capital						Treasury stock												Retained earnings
(000)						Shares						Amount																		Total
Balance at January 30, 2021						356,503						$	3,565					$	1,579,824					$	(478,550)											$	2,185,801					$	3,290,640
Net earnings						—						—						—						—												476,479						476,479
Common stock issued under stock
plans, net of shares
used for tax withholding						614						6						6,057						(47,378)												—						(41,315)
Stock-based compensation						—						—						28,674						—												—						28,674
Dividends declared ($0.285 per share)						—						—						—						—												(101,657)						(101,657)
Balance at May 01, 2021						357,117						$	3,571					$	1,614,555					$	(525,928)											$	2,560,623					$	3,652,821
Net earnings						—						—						—						—												494,258						494,258
Common stock issued under stock
plans, net of shares
used for tax withholding						30						—						6,471						(1,637)												—						4,834
Stock-based compensation						—						—						29,584						—												—						29,584
Common stock repurchased						(1,449)						(14)						(5,492)						—												(170,278)						(175,784)
Dividends declared ($0.285 per share)						—						—						—						—												(101,727)						(101,727)
Balance at July 31, 2021						355,698						$	3,557					$	1,645,118					$	(527,565)											$	2,782,876					$	3,903,986
Net earnings						—						—						—						—												385,030						385,030
Common stock issued under stock
plans, net of shares
used for tax withholding						97						1						6,091						(8,077)												—						(1,985)
Stock-based compensation						—						—						38,517						—												—						38,517
Common stock repurchased						(2,101)						(21)						(7,924)						—												(233,250)						(241,195)
Dividends declared ($0.285 per share)						—						—						—						—												(101,136)						(101,136)
Balance at October 30, 2021						353,694						$	3,537					$	1,681,802					$	(535,642)											$	2,833,520					$	3,983,217
The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows

			Nine Months Ended
($000, unaudited)			October 29, 2022						October 30, 2021
Cash Flows From Operating Activities
Net earnings			$	1,064,998					$	1,355,767
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			290,565						262,139
Stock-based compensation			92,367						96,775
Deferred income taxes			76,380						35,077
Change in assets and liabilities:
Merchandise inventory			(231,729)						(722,260)
Other current assets			(72,079)						(50,139)
Accounts payable			(452,968)						422,277
Other current liabilities			(308,202)						160,984
Income taxes			3,397						(60,442)
Operating lease assets and liabilities, net			8,634						4,767
Other long-term, net			1,304						(1,292)
Net cash provided by operating activities			472,667						1,503,653
Cash Flows From Investing Activities
Additions to property and equipment			(417,901)						(377,916)
Net cash used in investing activities			(417,901)						(377,916)
Cash Flows From Financing Activities
Issuance of common stock related to stock plans			18,298						18,626
Treasury stock purchased			(45,372)						(57,092)
Repurchase of common stock			(718,693)						(416,979)
Dividends paid			(324,648)						(304,520)
Net cash used in financing activities			(1,070,415)						(759,965)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents			(1,015,649)						365,772
Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period			4,982,382						4,953,769
End of period			$	3,966,733					$	5,319,541
Supplemental Cash Flow Disclosures
Interest paid			$	80,316					$	82,209
Income taxes paid			$	261,309					$	454,821

The accompanying notes are an integral part of these condensed consolidated financial statements.

Notes to Condensed Consolidated Financial Statements

Three and Nine Months Ended October 29, 2022 and October 30, 2021

(Unaudited)

Note A: Summary of Significant Accounting Policies

Basis of presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared from the records of Ross Stores, Inc. and subsidiaries (the “Company”) without audit and, in the opinion of management, include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company’s financial position as of October 29, 2022 and October 30, 2021, the results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021. The Condensed Consolidated Balance Sheet as of January 29, 2022, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended.

Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including notes thereto, contained in the Company’s Annual Report on Form 10-K for the year ended January 29, 2022.

The results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021 presented herein are not necessarily indicative of the results to be expected for the full fiscal year.

Use of accounting estimates. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant accounting estimates include valuation reserves for inventory, packaway and other inventory carrying costs, useful lives of fixed assets, insurance reserves, reserves for uncertain tax positions, and legal claims. The uncertainties and potential impacts from inflation, the Russia-Ukraine conflict, and the ongoing COVID-19 pandemic increase the challenge of making these estimates; actual results could differ materially from the Company’s estimates.

Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three and nine month periods ended October 29, 2022 and October 30, 2021:

			Three Months Ended												Nine Months Ended
			October 29, 2022						October 30, 2021						October 29, 2022						October 30, 2021
Ladies			25		%				26		%				25		%				26		%
Home Accents and Bed and Bath			25		%				25		%				25		%				25		%
Men’s			15		%				15		%				15		%				14		%
Accessories, Lingerie, Fine Jewelry, and Cosmetics			13		%				13		%				13		%				14		%
Shoes			13		%				11		%				13		%				12		%
Children’s			9		%				10		%				9		%				9		%
Total			100		%				100		%				100		%				100		%

Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original maturity of three months or less.

Restricted cash, cash equivalents, and investments. Restricted cash, cash equivalents, and investments serve as collateral for certain insurance obligations. These restricted funds are invested in bank deposits, money market mutual funds, U.S. Government and agency securities, and corporate securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The classification between current and long-term is based on the timing of expected payments of the obligations.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:

($000)			October 29, 2022						January 29, 2022						October 30, 2021
Cash and cash equivalents			$	3,906,490					$	4,922,365					$	5,259,595
Restricted cash and cash equivalents included in:
Prepaid expenses and other			11,446						11,403						10,790
Other long-term assets			48,797						48,614						49,156
Total restricted cash and cash equivalents			60,243						60,017						59,946
Total cash, cash equivalents, and restricted cash and cash equivalents			$	3,966,733					$	4,982,382					$	5,319,541

Property and equipment. As of October 29, 2022 and October 30, 2021, the Company had $30.2 million and $14.4 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and equipment, Accounts payable, and Accrued expenses and other in the accompanying Condensed Consolidated Balance Sheets.

Operating leases. Supplemental cash flow disclosures related to operating lease assets obtained in exchange for operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) were as follows:

			Three Months Ended												Nine Months Ended
($000)			October 29, 2022						October 30, 2021						October 29, 2022						October 30, 2021
Operating lease assets obtained in exchange for operating lease liabilities			$	235,186					$	208,767					$	549,267					$	395,428

Cash dividends. The Company’s Board of Directors declared a cash dividend of $0.310 per common share in March, May, and August 2022, and $0.285 per common share in March, May, August, and November 2021.

On November 16, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.310 per common share, payable on December 30, 2022.

Stock repurchase program. In March 2022, the Company's Board of Directors approved a new two-year program to repurchase up to $1.9 billion of the Company's common stock through fiscal 2023. This new program replaced the previous $1.5 billion stock repurchase program, effective at the end of fiscal 2021 (at which time the Company had repurchased $650 million of stock under the $1.5 billion program). The Company repurchased 8.2 million shares of common stock for $718.7 million during the nine month period ended October 29, 2022. The Company repurchased 3.5 million shares of common stock for $417.0 million during the nine month period ended October 30, 2021.

Litigation, claims, and assessments. Like many retailers, the Company has been named in class/representative action lawsuits, primarily in California, alleging violation of wage and hour/employment laws and consumer protection laws. Class/representative action litigation remains pending as of October 29, 2022.

The Company is also party to various other legal and regulatory proceedings arising in the normal course of business. Actions filed against the Company may include commercial, product and product safety, consumer, intellectual property, environmental, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that the Company violated federal, state, and/or local laws. Actions against the Company are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties.

In the opinion of management, the resolution of pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

Recently issued accounting standards. In September 2022, the FASB issued Accounting Standards Update (ASU) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, to enhance transparency about an entity's use of supplier finance programs. The ASU requires enhanced and additional disclosures about the key terms of supplier finance programs including a description of where in the financial statements any related amounts are presented. The initial guidance in the ASU will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase the transparency of the effects of government assistance, including disclosure of the types of assistance an entity receives, an entity’s method of accounting for government assistance, and the effect of government assistance on an entity’s financial statements. The guidance in this ASU will be effective for the Company for its fiscal 2022 Form 10-K. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

Note B: Fair Value Measurements

Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The inputs used to measure fair value include: Level 1, observable inputs such as quoted prices in active markets; Level 2, inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, unobservable inputs in which little or no market data exists. This fair value hierarchy requires the Company to develop its own assumptions, maximize the use of observable inputs, and minimize the use of unobservable inputs when measuring fair value. Corporate, U.S. government and agency, and mortgage-backed securities are classified within Level 1 or Level 2 because these securities are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

The fair value of the Company’s financial instruments are as follows:

($000)						October 29, 2022						January 29, 2022						October 30, 2021
Cash and cash equivalents (Level 1)						$	3,906,490					$	4,922,365					$	5,259,595
Restricted cash and cash equivalents (Level 1)						$	60,243					$	60,017					$	59,946

The underlying assets in the Company’s non-qualified deferred compensation program as of October 29, 2022, January 29, 2022, and October 30, 2021 (included in Other long-term assets and in Other long-term liabilities) primarily consist of participant-directed money market, stock, and bond funds. The fair value measurement for funds with quoted market prices in active markets (Level 1) are as follows:

($000)			October 29, 2022						January 29, 2022						October 30, 2021
Level 1			$	148,849					$	163,891					$	178,966

Note C: Management Incentive Plan and Stock-Based Compensation

The Company has incentive compensation programs which provide cash incentive bonuses and performance share awards to key management and employees based on Company and individual performance.

For fiscal 2022, the Compensation Committee of the Board of Directors established the performance measures for determining cash incentive bonuses and performance share awards based on profitability-based performance goals.

For fiscal 2021, the Compensation Committee of the Board of Directors established the performance measures for determining cash incentive bonuses and performance share awards based on profitability-based performance goals and the attainment of specific management priorities related to business challenges from the COVID-19 pandemic, as measured and approved by the Compensation Committee.

Stock-based compensation. For the three and nine month periods ended October 29, 2022 and October 30, 2021, the Company recognized stock-based compensation expense as follows:

			Three Months Ended												Nine Months Ended
($000)			October 29, 2022						October 30, 2021						October 29, 2022						October 30, 2021
Restricted stock			$	22,177					$	18,841					$	63,337					$	53,487
Performance awards			6,186						18,601						25,800						40,000
Employee stock purchase plan			1,130						1,075						3,230						3,288
Total			$	29,493					$	38,517					$	92,367					$	96,775

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and nine month periods ended October 29, 2022 and October 30, 2021, is as follows:

			Three Months Ended												Nine Months Ended
Statements of Earnings Classification ($000)			October 29, 2022						October 30, 2021						October 29, 2022						October 30, 2021
Cost of goods sold			$	16,547					$	18,594					$	50,768					$	48,354
Selling, general and administrative			12,946						19,923						41,599						48,421
Total			$	29,493					$	38,517					$	92,367					$	96,775

The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 29, 2022 were $6.1 million and $18.9 million, respectively. The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 30, 2021 were $8.4 million and $19.4 million, respectively.

Restricted stock awards. The Company grants shares of restricted stock or restricted stock units to directors, officers, and key employees. The market value of shares of restricted stock and restricted stock units at the date of grant is amortized to expense over the vesting period of generally three to five years.

During the three and nine month periods ended October 29, 2022 and October 30, 2021, shares purchased by the Company for tax withholding totaled 74,844 and 490,060, and 70,488 and 471,081, respectively, and are considered treasury shares which are available for reissuance.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of performance goals during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally two to three years from the date the performance award was granted.

As of October 29, 2022, shares related to unvested restricted stock, restricted stock units, and performance share awards totaled 4.5 million shares. A summary of restricted stock, restricted stock units, and performance share award activity for the nine month period ended October 29, 2022, is presented below:

(000, except per share data)			Number of shares						Weighted-average grant date fair value
Unvested at January 29, 2022			4,378						$	99.58
Awarded			1,504						88.98
Released			(1,266)						90.38
Forfeited			(101)						101.39
Unvested at October 29, 2022			4,515						$	98.44

The unamortized compensation expense at October 29, 2022 was $213.6 million, which is expected to be recognized over a weighted-average remaining period of 2.0 years. The unamortized compensation expense at October 30, 2021, was $193.8 million, which was expected to be recognized over a weighted-average remaining period of 2.1 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.

Note D: Earnings Per Share

The Company computes and reports both basic earnings per share (“EPS”) and diluted EPS. Basic EPS is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period, except in cases where the effect of the common stock equivalents would be anti-dilutive. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards and unvested shares of both performance and non-performance based awards of restricted stock and restricted stock units.

For the three and nine month periods ended October 29, 2022, approximately 85,000 and 492,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively, because their effect would have been anti-dilutive for the periods presented. For the three and nine month periods ended October 30, 2021, approximately 13,200 and 3,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively, because their effect would have been anti-dilutive for the periods presented.

The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:

			Three Months Ended																					Nine Months Ended
Shares in (000s)			Basic EPS						Effect of dilutive common stock equivalents						Diluted EPS									Basic EPS						Effect of dilutive common stock equivalents						Diluted EPS
October 29, 2022
Shares			342,120						1,600						343,720									344,686						1,526						346,212
Amount			$	1.00					$	—					$	1.00								$	3.09					$	(0.01)					$	3.08
October 30, 2021
Shares			351,071						2,010						353,081									352,308						2,169						354,477
Amount			$	1.10					$	(0.01)					$	1.09								$	3.85					$	(0.03)					$	3.82

Note E: Debt

Long-term debt. Unsecured senior debt, net of unamortized discounts and debt issuance costs, consisted of the following:

($000)						October 29, 2022						January 29, 2022						October 30, 2021
6.530% Series B Senior Notes due 2021						$	—					$	—					$	64,991
3.375% Senior Notes due 2024						249,144						248,808						248,697
4.600% Senior Notes due 2025						696,841						695,888						695,571
0.875% Senior Notes due 2026						495,732						494,814						494,508
4.700% Senior Notes due 2027						239,791						239,470						239,364
4.800% Senior Notes due 2030						132,559						132,431						132,388
1.875% Senior Notes due 2031						495,113						494,691						494,551
5.450% Senior Notes due 2050						146,280						146,223						146,204
Total long-term debt						$	2,455,460					$	2,452,325					$	2,516,274
Less: current portion						—						—						64,991
Total due beyond one year						$	2,455,460					$	2,452,325					$	2,451,283

As of October 29, 2022, January 29, 2022, and October 30, 2021, total unamortized discount and debt issuance costs were $19.5 million, $22.7 million, and $23.7 million, respectively, and were classified as a reduction of Long-term debt.

As of October 29, 2022 and January 29, 2022 the aggregate fair value of the seven outstanding series of Senior Notes was approximately $2.2 billion and $2.6 billion, respectively. As of October 30, 2021 the aggregate fair value of the then eight outstanding series of Senior Notes was approximately $2.6 billion. The fair value is estimated by obtaining comparable market quotes which are considered to be Level 1 inputs under the fair value measurements and disclosures guidance.

See Note D: Debt, in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022, for additional information regarding the terms of the Company’s unsecured senior notes.

Revolving credit facilities. In February 2022, the Company entered into a new, $1.3 billion senior unsecured revolving Credit Agreement (the “2022 Credit Facility”), which replaced its previous $800 million unsecured revolving credit facility. The 2022 Credit Facility expires in February 2027, and may be extended, at the Company's request and with the consent of the lenders, for up to two additional one year periods, subject to customary conditions. The new facility contains a $300 million sublimit for issuance of standby letters of credit. It also contains an option allowing the Company to increase the size of its credit facility by up to an additional $700 million, with the agreement of the committing lenders. The interest rate on borrowings under the 2022 Credit Facility is a term rate based on the Secured Overnight Financing Rate (“Term SOFR”) (or an alternate benchmark rate, if Term SOFR is no longer available) plus an applicable margin, and is payable quarterly and upon maturity. The 2022 Credit Facility is subject to a quarterly Consolidated Adjusted Debt to Consolidated EBITDAR financial leverage ratio covenant. As of October 29, 2022, the Company was in compliance with this financial covenant.

As of October 29, 2022, the Company had no borrowings or standby letters of credit outstanding under the 2022 Credit Facility, and the $1.3 billion credit facility remains in place and available.

The table below shows the components of interest expense and income for the three and nine month periods ended October 29, 2022 and October 30, 2021:

			Three Months Ended															Nine Months Ended
($000)			October 29, 2022						October 30, 2021									October 29, 2022						October 30, 2021
Interest expense on long-term debt			$	21,150					$	22,227								63,429						$	66,626
Other interest expense			448						391									1,242						1,012
Capitalized interest			(663)						(3,682)									(4,489)						(10,511)
Interest income			(23,737)						(192)									(34,621)						(627)
Interest (income) expense, net			$	(2,802)					$	18,744								$	25,561					$	56,500

Note F: Taxes on Earnings

The Company’s effective tax rate for the three and nine month periods ended October 29, 2022 and October 30, 2021, was approximately 24%. The Company's effective tax rate is impacted by changes in tax law and accounting guidance, location of new stores, level of earnings, tax effects associated with stock-based compensation, and uncertain tax positions.

As of October 29, 2022, January 29, 2022, and October 30, 2021, the reserves for unrecognized tax benefits were $70.7 million, $68.1 million, and $76.9 million, inclusive of $9.1 million, $7.6 million, and $9.8 million of related interest and penalties, respectively. The Company accounts for interest and penalties related to unrecognized tax benefits as a part of its provision for taxes on earnings. If recognized, $56.7 million would impact the Company’s effective tax rate. It is reasonably possible that certain state tax matters may be concluded or statutes of limitations may lapse during the next 12 months. Accordingly, the total amount of unrecognized tax benefits may decrease by up to $10.0 million. The difference between the total amount of unrecognized tax benefits and the amounts that would impact the effective tax rate relates to amounts attributable to deferred income tax assets and liabilities. These amounts are net of federal and state income taxes.

The Company is open to audit by the Internal Revenue Service under the statute of limitations for fiscal years 2018 through 2021. The Company’s state income tax returns are generally open to audit under the various statutes of limitations for fiscal years 2017 through 2021. Certain federal and state tax returns are currently under audit by various tax authorities. The Company does not expect the results of these audits to have a material impact on the condensed consolidated financial statements.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Ross Stores, Inc.:

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheets of Ross Stores, Inc. and subsidiaries (the “Company”) as of October 29, 2022 and October 30, 2021, the related condensed consolidated statements of earnings, comprehensive income, and stockholders’ equity, for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of January 29, 2022, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 29, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 29, 2022 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

San Francisco, California

December 6, 2022