Item 1. FINANCIAL STATEMENTS

Condensed Consolidated Statements of Earnings

			Three Months Ended												Nine Months Ended
($000, except stores and per share data, unaudited)			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Sales			$	5,071,354					$	4,924,849					$	15,216,940					$	14,354,440
Costs and Expenses
Cost of goods sold			3,634,283						3,564,268						10,916,884						10,426,241
Selling, general and administrative			832,855						810,470						2,445,494						2,364,590
Interest income, net			(42,527)						(43,319)						(131,827)						(111,930)
Total costs and expenses			4,424,611						4,331,419						13,230,551						12,678,901
Earnings before taxes			646,743						593,430						1,986,389						1,675,539
Provision for taxes on earnings			157,935						146,103						482,443						410,702
Net earnings			$	488,808					$	447,327					$	1,503,946					$	1,264,837
Earnings per share
Basic			$	1.49					$	1.34					$	4.56					$	3.76
Diluted			$	1.48					$	1.33					$	4.53					$	3.74
Weighted-average shares outstanding (000)
Basic			327,710						334,282						329,453						336,187
Diluted			329,937						336,261						331,728						338,107

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)			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Net earnings			$	488,808					$	447,327					$	1,503,946					$	1,264,837
Other comprehensive income			—						—						—						—
Comprehensive income			$	488,808					$	447,327					$	1,503,946					$	1,264,837

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

Condensed Consolidated Balance Sheets

($000, except share data, unaudited)			November 2, 2024						February 3, 2024						October 28, 2023
Assets
Current Assets
Cash and cash equivalents			$	4,349,262					$	4,872,446					$	4,499,497
Accounts receivable			176,218						130,766						171,915
Merchandise inventory			2,859,106						2,192,220						2,613,808
Prepaid expenses and other			241,703						202,706						206,725
Total current assets			7,626,289						7,398,138						7,491,945
Property and Equipment
Land and buildings			1,487,579						1,486,557						1,491,023
Fixtures and equipment			4,428,436						4,220,221						4,109,947
Leasehold improvements			1,637,771						1,577,102						1,503,769
Construction-in-progress			749,911						628,730						569,995
			8,303,697						7,912,610						7,674,734
Less accumulated depreciation and amortization			4,646,018						4,380,709						4,277,215
Property and equipment, net			3,657,679						3,531,901						3,397,519
Operating lease assets			3,349,427						3,126,841						3,160,017
Other long-term assets			271,791						243,229						221,139
Total assets			$	14,905,186					$	14,300,109					$	14,270,620
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable			$	2,346,479					$	1,955,850					$	2,280,278
Accrued expenses and other			637,332						671,867						665,279
Current operating lease liabilities			699,200						683,625						680,088
Accrued payroll and benefits			459,094						548,371						509,484
Income taxes payable			2,186						76,370						20,960
Current portion of long-term debt			699,407						249,713						249,598
Total current liabilities			4,843,698						4,185,796						4,405,687
Long-term debt			1,514,452						2,211,017						2,210,073
Non-current operating lease liabilities			2,821,417						2,603,349						2,640,068
Other long-term liabilities			265,673						232,383						218,970
Deferred income taxes			196,583						196,238						212,866
Commitments and contingencies
Stockholders’ Equity
Common stock, par value $.01 per share Authorized 1,000,000,000 shares Issued and outstanding 330,258,000, 335,172,000 and 336,952,000 shares, respectively			3,303						3,352						3,370
Additional paid-in capital			2,060,801						1,952,625						1,920,908
Treasury stock			(719,410)						(633,318)						(633,318)
Retained earnings			3,918,669						3,548,667						3,291,996
Total stockholders’ equity			5,263,363						4,871,326						4,582,956
Total liabilities and stockholders’ equity			$	14,905,186					$	14,300,109					$	14,270,620

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

Condensed Consolidated Statements of Stockholders’ Equity

						Nine Months Ended November 2, 2024
						Common stock												Additional paid-in capital						Treasury stock												Retained earnings
($ and shares in 000, except per share data, unaudited)						Shares						Amount																		Total
Balance at February 3, 2024						335,172						$	3,352					$	1,952,625					$	(633,318)											$	3,548,667					$	4,871,326
Net earnings						—						—						—						—												487,990						487,990
Common stock issued under stock plans, net of shares used for tax withholding						642						6						6,218						(70,480)												—						(64,256)
Stock-based compensation						—						—						40,447						—												—						40,447
Common stock repurchased, inclusive of excise tax						(1,892)						(19)						(9,368)						—												(254,870)						(264,257)
Dividends declared ($0.3675 per share)						—						—						—						—												(123,298)						(123,298)
Balance at May 4, 2024						333,922						$	3,339					$	1,989,922					$	(703,798)											$	3,658,489					$	4,947,952
Net earnings						—						—						—						—												527,148						527,148
Common stock issued under stock plans, net of shares used for tax withholding						(7)						—						6,194						(1,248)												—						4,946
Stock-based compensation						—						—						38,021						—												—						38,021
Common stock repurchased, inclusive of excise tax						(1,840)						(18)						(9,315)						—												(255,749)						(265,082)
Dividends declared ($0.3675 per share)						—						—						—						—												(122,453)						(122,453)
Balance at August 3, 2024						332,075						$	3,321					$	2,024,822					$	(705,046)											$	3,807,435					$	5,130,532
Net earnings						—						—						—						—												488,808						488,808
Common stock issued under stock plans, net of shares used for tax withholding						(29)						—						6,351						(14,364)												—						(8,013)
Stock-based compensation						—						—						38,744						—												—						38,744
Common stock repurchased, inclusive of excise tax						(1,788)						(18)						(9,116)						—												(255,833)						(264,967)
Dividends declared ($0.3675 per share)						—						—						—						—												(121,741)						(121,741)
Balance at November 2, 2024						330,258						$	3,303					$	2,060,801					$	(719,410)											$	3,918,669					$	5,263,363
The accompanying notes are an integral part of these condensed consolidated financial statements.

						Nine Months Ended October 28, 2023
																		Additional paid-in capital
						Common stock															Treasury stock									Retained earnings
($ and shares in 000, except per share data, unaudited)						Shares						Amount																		Total
Balance at January 28, 2023						342,753						$	3,428					$	1,820,249					$	(584,750)											$	3,049,656					$	4,288,583
Net earnings						—						—						—						—												371,191						371,191
Common stock issued under stock plans, net of shares used for tax withholding						461						4						6,145						(37,522)												—						(31,373)
Stock-based compensation						—						—						33,063						—												—						33,063
Common stock repurchased, inclusive of excise tax						(2,169)						(22)						(9,729)						—												(226,523)						(236,274)
Dividends declared ($0.3350 per share)						—						—						—						—												(114,794)						(114,794)
Balance at April 29, 2023						341,045						$	3,410					$	1,849,728					$	(622,272)											$	3,079,530					$	4,310,396
Net earnings						—						—						—						—												446,319						446,319
Common stock issued under stock plans, net of shares used for tax withholding						89						1						6,208						(913)												—						5,296
Stock-based compensation						—						—						39,429						—												—						39,429
Common stock repurchased, inclusive of excise tax						(2,152)						(21)						(9,959)						—												(222,713)						(232,693)
Dividends declared ($0.3350 per share)						—						—						—						—												(114,005)						(114,005)
Balance at July 29, 2023						338,982						$	3,390					$	1,885,406					$	(623,185)											$	3,189,131					$	4,454,742
Net earnings						—						—						—						—												447,327						447,327
Common stock issued under stock plans, net of shares used for tax withholding						34						1						6,231						(10,133)												—						(3,901)
Stock-based compensation						—						—						38,877						—												—						38,877
Common stock repurchased, inclusive of excise tax						(2,064)						(21)						(9,606)						—												(231,129)						(240,756)
Dividends declared ($0.3350 per share)						—						—						—						—												(113,333)						(113,333)
Balance at October 28, 2023						336,952						$	3,370					$	1,920,908					$	(633,318)											$	3,291,996					$	4,582,956
The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows

			Nine Months Ended
($000, unaudited)			November 2, 2024						October 28, 2023
Cash Flows From Operating Activities
Net earnings			$	1,503,946					$	1,264,837
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			329,584						300,366
Stock-based compensation			117,212						111,369
Deferred income taxes			345						(4,193)
Change in assets and liabilities:
Merchandise inventory			(666,886)						(590,313)
Other current assets			(62,793)						(48,803)
Accounts payable			390,398						259,105
Other current liabilities			(83,300)						284,989
Income taxes			(64,016)						(25,524)
Operating lease assets and liabilities, net			11,057						8,336
Other long-term, net			(1,116)						5,566
Net cash provided by operating activities			1,474,431						1,565,735
Cash Flows From Investing Activities
Additions to property and equipment			(514,122)						(540,458)
Net cash used in investing activities			(514,122)						(540,458)
Cash Flows From Financing Activities
Issuance of common stock related to stock plans			18,769						18,590
Treasury stock purchased			(86,092)						(48,568)
Repurchase of common stock			(787,479)						(703,400)
Excise tax paid on repurchase of common stock			(8,798)						—
Dividends paid			(367,492)						(342,132)
Payment of long-term debt			(250,000)						—
Net cash used in financing activities			(1,481,092)						(1,075,510)
Net decrease in cash, cash equivalents, and restricted cash and cash equivalents			(520,783)						(50,233)
Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period			4,935,441						4,612,241
End of period			$	4,414,658					$	4,562,008
Supplemental Cash Flow Disclosures
Interest paid			$	80,316					$	80,316
Income taxes paid, net			$	546,113					$	440,419

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

Notes to Condensed Consolidated Financial Statements

Three and Nine Months Ended November 2, 2024 and October 28, 2023

(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 November 2, 2024 and October 28, 2023, and the results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended November 2, 2024 and October 28, 2023, and the cash flows for the nine month periods ended November 2, 2024 and October 28, 2023. The Condensed Consolidated Balance Sheet as of February 3, 2024, 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 Generally Accepted Accounting Principles 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 February 3, 2024.

The results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended November 2, 2024 and October 28, 2023, and the cash flows for the nine month periods ended November 2, 2024 and October 28, 2023 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. The fiscal year ending February 1, 2025 is referred to as fiscal 2024 and is a 52-week year. The fiscal year ended February 3, 2024 is referred to as fiscal 2023 and was a 53-week 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. Actual results could differ materially from the Company’s estimates. 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.

Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three and nine month periods ended November 2, 2024 and October 28, 2023:

			Three Months Ended												Nine Months Ended
			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Home Accents and Bed and Bath			25		%				25		%				25		%				25		%
Ladies			23		%				23		%				23		%				24		%
Men’s			16		%				16		%				16		%				15		%
Accessories, Lingerie, Fine Jewelry, and Cosmetics			14		%				14		%				14		%				14		%
Shoes			13		%				13		%				13		%				13		%
Children’s			9		%				9		%				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. The institutions where these instruments are held could potentially subject the Company to concentrations of credit risk. The Company manages its risk associated with these instruments primarily by holding its cash and cash equivalents across a highly diversified set of banks and other financial institutions.

Restricted cash and cash equivalents. The Company uses standby letters of credit in addition to a funded trust to collateralize certain insurance obligations. These restricted funds are invested in bank deposits, money market mutual funds, and U.S. Government and agency securities, and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The standby letters of credit are collateralized by restricted cash. As of November 2, 2024, February 3, 2024, and October 28, 2023, the Company had $2.2 million, $2.2 million, and $2.6 million, respectively, in standby letters of credit outstanding. As of November 2, 2024, February 3, 2024, and October 28, 2023, the Company had $63.2 million, $60.8 million, and $59.9 million, respectively, in a collateral trust. 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)			November 2, 2024						February 3, 2024						October 28, 2023
Cash and cash equivalents			$	4,349,262					$	4,872,446					$	4,499,497
Restricted cash and cash equivalents included in:
Prepaid expenses and other			15,041						14,489						13,127
Other long-term assets			50,355						48,506						49,384
Total restricted cash and cash equivalents			65,396						62,995						62,511
Total cash, cash equivalents, and restricted cash and cash equivalents			$	4,414,658					$	4,935,441					$	4,562,008

Property and equipment. As of November 2, 2024 and October 28, 2023, the Company had $39.5 million and $47.0 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.

As of November 2, 2024, the Company had $21.1 million in Prepaid expenses and other related to a building that was reclassified as held for sale.

Operating leases. 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)			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Operating lease assets obtained in exchange for operating lease liabilities			$	284,516					$	159,616					$	725,122					$	550,467

Cash dividends. On November 20, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.3675 per common share, payable on December 31, 2024. The Company’s Board of Directors declared a cash dividend of $0.3675 per common share in March, May, and August 2024, and $0.3350 per common share in February, May, August, and November 2023.

Stock repurchase program. In March 2024, the Company’s Board of Directors approved a new two-year program to repurchase up to $2.1 billion of the Company’s common stock through January 31, 2026. During the nine month period ended November 2, 2024, the Company repurchased 5.5 million shares of common stock for $787.5 million (excluding excise tax) under this program. During the nine month period ended October 28, 2023, the Company repurchased 6.4 million shares of common stock for $703.4 million (excluding excise tax) under the previous, publicly announced stock repurchase program.

Litigation, claims, and assessments. Like many retailers, the Company has been named in class/representative action lawsuits, primarily in California, alleging violations by the Company of wage and hour laws. Class/representative action litigation remains pending as of November 2, 2024.

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 currently 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.

Supply chain finance program. The Company facilitates a voluntary supply chain finance program (the “program”) to provide certain suppliers with the opportunity to sell their receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. A third-party bank administers the program. The Company’s responsibility is limited to making payments on the terms originally negotiated with each supplier, regardless of whether a supplier sells its receivable to a financial institution. The Company is not a party to the agreements between the participating financial institutions and the suppliers in connection with the program and receives no financial incentives from the suppliers or the financial institutions. No guarantees are provided by the Company under the program, and the Company’s rights and obligations to its suppliers are not affected by the program. The range of payment terms negotiated with suppliers is consistent, irrespective of whether a supplier participates in the program.

All outstanding payments owed under the program are recorded within Accounts payable in the Condensed Consolidated Balance Sheets. The Company accounts for all payments made under the program as a reduction to operating cash flows in Accounts payable within the Condensed Consolidated Statements of Cash Flows. The amounts owed to participating financial institutions under the program and included in Accounts payable were $148.8 million, $146.9 million, and $141.0 million at November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

Recently adopted accounting standards. In September 2022, the Financial Accounting Standards Board (“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 Company adopted ASU 2022-04 in the first quarter of fiscal 2023 on a retrospective basis, excluding the annual rollforward requirement which will be adopted on a prospective basis in its fiscal 2024 Annual Report on Form 10-K. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements for the three and nine month periods ended November 2, 2024, and is not expected to have a material impact on the Company’s fiscal 2024 consolidated financial statements.

Recently issued accounting standards. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. It requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation and the amount of income taxes paid as well as additional income tax related amounts. The new guidance is effective for annual reporting periods beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The standard is effective for annual reporting periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024. 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 and U.S. government and agency securities are classified within Level 1 because these securities are valued using quoted market prices.

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

($000)						November 2, 2024						February 3, 2024						October 28, 2023
Cash and cash equivalents (Level 1)						$	4,349,262					$	4,872,446					$	4,499,497
Restricted cash and cash equivalents (Level 1)						$	65,396					$	62,995					$	62,511

The underlying assets in the Company’s nonqualified deferred compensation program as of November 2, 2024, February 3, 2024, and October 28, 2023 (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)			November 2, 2024						February 3, 2024						October 28, 2023
Nonqualified deferred compensation program (Level 1)			$	189,522					$	165,582					$	145,003

Note C: Stock-Based Compensation

For the three and nine month periods ended November 2, 2024 and October 28, 2023, the Company recognized stock-based compensation expense as follows:

			Three Months Ended												Nine Months Ended
($000)			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Restricted stock			$	22,781					$	23,546					$	67,691					$	69,094
Performance awards			14,842						14,232						46,208						38,994
Employee stock purchase plan			1,121						1,099						3,313						3,281
Total			$	38,744					$	38,877					$	117,212					$	111,369

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and nine month periods ended November 2, 2024 and October 28, 2023 is as follows:

			Three Months Ended												Nine Months Ended
Statements of Earnings Classification ($000)			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Cost of goods sold			$	19,125					$	20,254					$	55,816					$	58,885
Selling, general and administrative			19,619						18,623						61,396						52,484
Total			$	38,744					$	38,877					$	117,212					$	111,369

The tax benefits related to stock-based compensation expense for the three and nine month periods ended November 2, 2024 were $7.2 million and $22.2 million, respectively. The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 28, 2023 were $7.9 million and $23.2 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.

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 a performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally three years from the date the performance award was granted.

As of November 2, 2024, shares related to unvested restricted stock, restricted stock units, and performance share awards totaled 3.7 million shares. A summary of restricted stock, restricted stock units, and performance share award activity for the nine month period ended November 2, 2024, is presented below:

			Number of shares (000)						Weighted-average grant date fair value
Unvested at February 3, 2024			4,395						$	104.52
Awarded			769						146.57
Released			(1,307)						104.80
Forfeited			(139)						108.50
Unvested at November 2, 2024			3,718						$	112.97

The unamortized compensation expense at November 2, 2024 was $200.7 million which is expected to be recognized over a weighted-average remaining period of 1.8 years. The unamortized compensation expense at October 28, 2023 was $199.0 million which was expected to be recognized over a weighted-average remaining period of 2.0 years.

Shares repurchased for tax withholding are considered treasury shares which are available for reissuance. During the three and nine month periods ended November 2, 2024, shares purchased by the Company for tax withholding totaled 92,847 and 586,644, respectively. During the three and nine month periods ended October 28, 2023, shares purchased by the Company for tax withholding totaled 85,761 and 461,889, respectively.

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 withheld 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. 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.

Shares are excluded from the calculation of diluted EPS if their effect would have been anti-dilutive to the calculation of diluted EPS. For the three and nine month periods ended November 2, 2024, approximately 5,000 and 4,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively. For the three and nine month periods ended October 28, 2023, approximately 14,000 and 17,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively.

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
November 2, 2024
Shares			327,710						2,227						329,937									329,453						2,275						331,728
Amount			$	1.49					$	(0.01)					$	1.48								$	4.56					$	(0.03)					$	4.53
October 28, 2023
Shares			334,282						1,979						336,261									336,187						1,920						338,107
Amount			$	1.34					$	(0.01)					$	1.33								$	3.76					$	(0.02)					$	3.74

Note E: Debt

Senior Notes. Unsecured senior debt (the “Senior Notes”), net of unamortized discounts and debt issuance costs, consisted of the following:

($000)						November 2, 2024						February 3, 2024						October 28, 2023
3.375% Senior Notes due 2024						$	—					$	249,713					$	249,598
4.600% Senior Notes due 2025						699,407						698,441						698,120
0.875% Senior Notes due 2026						498,194						497,268						496,960
4.700% Senior Notes due 2027						240,666						240,335						240,225
4.800% Senior Notes due 2030						132,909						132,776						132,732
1.875% Senior Notes due 2031						496,247						495,820						495,678
5.450% Senior Notes due 2050						146,436						146,377						146,358
Total long-term debt1						$	2,213,859					$	2,460,730					$	2,459,671
Less: current portion						$	699,407					$	249,713					$	249,598
Total due beyond one year						$	1,514,452					$	2,211,017					$	2,210,073

1 Net of unamortized discounts and debt issuance costs of $11.1 million, $14.3 million, and $15.3 million as of November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

Interest on all Senior Notes is payable semi-annually and the Senior Notes are subject to prepayment penalties for early payment of principal.

In September 2024, the Company repaid at maturity the $250 million principal amount of the 3.375% Senior Notes.

The aggregate fair value of the remaining six outstanding series of Senior Notes was approximately $2.1 billion as of November 2, 2024. The aggregate fair value of the seven then outstanding series of Senior Notes was approximately $2.3 billion and $2.2 billion as of February 3, 2024 and October 28, 2023, respectively. 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.

Revolving credit facilities. The Company’s $1.3 billion senior unsecured revolving credit facility (“Credit Facility”) expires in February 2027 and may be extended at the Company’s request for up to two additional one-year periods subject to customary conditions. The Credit 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. Interest on borrowings under this 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 Credit Facility is subject to a quarterly Consolidated Adjusted Debt to Consolidated EBITDAR financial leverage ratio covenant. As of November 2, 2024, the Company was in compliance with the financial covenant, had no borrowings or standby letters of credit outstanding under the Credit Facility, and the $1.3 billion Credit Facility remained in place and available.

The table below shows the components of interest income for the three and nine month periods ended November 2, 2024 and October 28, 2023:

			Three Months Ended												Nine Months Ended
($000)			November 2, 2024						October 28, 2023						November 2, 2024						October 28, 2023
Interest expense on long-term debt			$	20,025					$	21,159					$	62,342					$	63,458
Other interest expense			417						424						1,142						1,169
Capitalized interest			(5,047)						(3,342)						(13,889)						(8,268)
Interest income			(57,922)						(61,560)						(181,422)						(168,289)
Interest income, net			$	(42,527)					$	(43,319)					$	(131,827)					$	(111,930)

Note F: Taxes on Earnings

The Company’s effective tax rate for the three and nine month periods ended November 2, 2024 was approximately 24%, and was approximately 25% for the three and nine month periods ended October 28, 2023. The Company’s effective tax rate is impacted by changes in tax laws and accounting guidance, location of new stores, level of earnings, tax effects associated with stock-based compensation, and the resolution of tax positions with various tax authorities.

As of November 2, 2024, February 3, 2024, and October 28, 2023, the reserves for unrecognized tax benefits were $67.1 million, $58.6 million, and $65.3 million, inclusive of $9.0 million, $6.2 million, and $8.4 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, $53.1 million would impact the Company’s effective tax rate. It is reasonably possible that certain federal and 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 $8.5 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 2021 through 2023. The Company’s state income tax returns are generally open to audit under the various statutes of limitations for fiscal years 2019 through 2023. Certain 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.

In December 2021, the Organization for Economic Co-operation and Development released Pillar Two Model Rules (“Pillar Two”), which provide for a global minimum tax of 15% on multinational entities. Although the United States has not yet adopted Pillar Two, several countries enacted Pillar Two with an initial effective date of January 1, 2024. The impact of Pillar Two on the Company’s effective tax rate is expected to be minimal for fiscal 2024. The Company will continue to monitor future Pillar Two legislation in relevant jurisdictions for any impacts to its effective tax rate.

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 November 2, 2024 and October 28, 2023, the related condensed consolidated statements of earnings, comprehensive income, and stockholders’ equity, for the three and nine month periods ended November 2, 2024 and October 28, 2023, and cash flows for the nine month periods ended November 2, 2024 and October 28, 2023 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 February 3, 2024, 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 April 1, 2024, 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 February 3, 2024, 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 10, 2024