Ross Stores (ROST)

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, to open new stores, and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising, and other information systems.
• Our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to lease or acquire acceptable new store sites with favorable demographics and long term financial returns.
• Our ability to identify and to successfully enter new geographic markets.
• Our ability to achieve planned gross margins, by effectively managing inventories, markdowns, and shrink.
• Our ability to effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for store and distribution center employees.

24

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, to open new stores, and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising and other information systems.
• Our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to lease or acquire acceptable new store sites with favorable demographics and long term financial returns.
• Our ability to identify and to successfully enter new geographic markets.
• Our ability to achieve planned gross margins, by effectively managing inventories, markdowns, and shrink.
• Our ability to effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for store and distribution center employees.

We are subject to operating
risks as we attempt to execute on our merchandising and growth
strategies.

The continued success of our
business depends, in part, upon our ability to increase sales at our existing
store locations, to open new stores, and to operate stores on a profitable
basis. Our existing strategies and store expansion programs may not result in a
continuation of our anticipated revenue or profit growth. In executing our
off-price retail strategies and working to improve efficiencies, expand our
store network, and reduce our costs, we face a number of operational risks,
including:

• Our ability to attract and retain personnel
  with the retail talent necessary to execute our strategies.
  
• Our ability to effectively operate our
  various supply chain, core merchandising and other information systems.
  
  
• Our ability to improve our merchandising
  capabilities through the development and implementation of new processes and
  systems enhancements.
  
• Our ability to improve new store sales and
  profitability, especially in newer regions and markets.
  
• Our ability to achieve and maintain targeted
  levels of productivity and efficiency in our distribution centers.
  
• Our ability to lease or acquire acceptable
  new store sites with favorable demographics and long term financial
  returns.
  
• Our ability to identify and to successfully
  enter new geographic markets.
  
• Our ability to achieve planned gross margins,
  by effectively managing inventories, markdowns, and shrink.
  
• Our ability to effectively manage all
  operating costs of the business, the largest of which are payroll and benefit
  costs for store and distribution center employees.

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising and other information systems.
• Our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to lease or acquire acceptable new store sites with favorable demographics and long term financial returns.
• Our ability to identify and to successfully enter new geographic markets.
• Our ability to achieve planned gross margins, by effectively managing inventories, markdowns, and shrink.
• Our ability to effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for stores and distribution centers.

24

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising and other information systems.
• Our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to lease or acquire acceptable new store sites with favorable demographics and long term financial returns.
• Our ability to identify and to successfully enter new geographic markets.
• Our ability to achieve planned gross margins, by effectively managing inventories, markdowns, and shrink.
• Our ability to effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for stores and distribution centers.

24

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising and other information systems.
• Our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to lease or acquire acceptable new store sites with favorable demographics and long term financial returns.
• Our ability to identify and to successfully enter new geographic markets.
• Our ability to achieve planned gross margins, by effectively managing inventories, markdowns, and shrink.
• Our ability to effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for stores and distribution centers.

23

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue or profit growth. In executing our off-price retail strategies and working to improve efficiencies, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising and other information systems.
• Our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to lease or acquire acceptable new store sites with favorable demographics and long term financial returns.
• Our ability to identify and to successfully enter new geographic markets.
• Our ability to achieve planned gross margins, by effectively managing inventories, markdowns, and shrink.
• Our ability to effectively manage all operating costs of the business, the largest of which are payroll and benefit costs for stores and distribution centers.

We are subject to operating
risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our
business depends, in part, upon our ability to increase sales at our existing
store locations, and to open new stores and to operate stores on a profitable
basis. Our existing strategies and store expansion programs may not result in a
continuation of our anticipated revenue or profit growth. In executing our
off-price retail strategies and working to improve efficiencies, expand our
store network, and reduce our costs, we face a number of operational risks,
including:

• Our ability to attract and retain personnel
  with the retail talent necessary to execute our strategies.
  
• Our ability to effectively operate our
  various supply chain, core merchandising and other information systems.
  
  
• Our ability to improve our merchandising
  capabilities through the development and implementation of new processes and
  systems enhancements.
  
• Our ability to improve new store sales and
  profitability, especially in newer regions and markets.
  
• Our ability to achieve and maintain targeted
  levels of productivity and efficiency in our distribution centers.
  
• Our ability to lease or acquire acceptable
  new store sites with favorable demographics and long term financial returns.
  
  
• Our ability to identify and to successfully
  enter new geographic markets.
  
• Our ability to achieve planned gross margins,
  by effectively managing inventories, markdowns, and shrink.
  
• Our ability to effectively manage all
  operating costs of the business, the largest of which are payroll and benefit
  costs for stores and distribution centers.

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth. In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail talent necessary to execute our strategies.
• Our ability to effectively operate our various supply chain, core merchandising and other information systems.
• Our ability to improve our merchandising capabilities through the implementation of new processes and systems enhancements.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to continue to acquire or lease acceptable new store locations.
• Our ability to identify and to successfully enter new geographic markets.
• Lower than planned gross margin, including higher than planned markdowns, and higher than expected inventory shortage.
• Greater than planned operating costs including, among other factors, increases in occupancy costs, advertising costs, and wage and benefit costs, including the impact of changes in labor laws or as a result of class action or other lawsuits relating to wage and hour claims and other labor-related matters.
• Our ability to convert certain Albertsons real estate sites to the Ross and dd’s DISCOUNTS formats in a timely and cost effective manner and on acceptable terms, and the ability to achieve targeted levels of sales, profits and cash flows from these acquired store locations.

The above risks could significantly affect our operating results and financial condition.

22

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth. In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail expertise necessary to execute our strategies.
• Our ability to effectively implement and operate our various supply chain, core merchandising and other information systems, including generation of all necessary data and reports for merchants, allocators and other business users in a timely and cost-effective manner.
• Our ability to successfully implement new processes and systems enhancements that are expected to improve our merchandising capabilities with the goal of being able to plan, buy and allocate product at a more local versus regional level.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to continue to acquire or lease acceptable new store locations.
• Our ability to identify and to successfully enter new geographic markets.
• Lower than planned gross margin, including higher than planned markdowns, inventory shortage or freight costs.
• Greater than planned operating costs including, among other factors, increases in occupancy costs, advertising costs, and wage and benefit costs, including the impact of changes in labor laws or as a result of class action or other lawsuits relating to wage and hour claims and other labor-related matters.
• Our ability to convert certain Albertsons real estate sites to the Ross and dd’s DISCOUNTS formats in a timely and cost effective manner and on acceptable terms, and the ability to achieve targeted levels of sales, profits and cash flows from these acquired store locations.

The above risks could significantly affect our operating results and financial condition.

22

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth. In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail expertise necessary to execute our strategies. 
• Our ability to effectively implement and operate our various supply chain, core merchandising and other information systems, including generation of all necessary data and reports for merchants, allocators and other business users in a timely and cost-effective manner. 
• Our ability to successfully implement new processes and systems enhancements that are expected to improve our merchandising capabilities with the goal of being able to plan, buy and allocate product at a more local versus regional level. 
• Our ability to improve new store sales and profitability, especially in newer regions and markets. 

21

We are subject to operating risks as we attempt to execute our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis. Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth. In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

• Our ability to attract and retain personnel with the retail expertise necessary to execute our strategies.
• Our ability to effectively implement and operate our various supply chain, core merchandising and other information systems, including generation of all necessary data and reports for merchants, allocators and other business users in a timely and cost-effective manner.
• Our ability to successfully implement new processes and systems enhancements that are expected to improve our merchandising capabilities over the next few years with the goal of being able to plan, buy and allocate product at a more local versus regional level.
• Our ability to improve new store sales and profitability, especially in newer regions and markets.
• Our ability to achieve and maintain targeted levels of productivity and efficiency in our distribution centers.
• Our ability to continue to acquire or lease acceptable new store locations.
• Our ability to identify and to successfully enter new geographic markets.
• Lower than planned gross margin, including higher than planned markdowns, inventory shortage or freight costs.
• Greater than planned operating costs including, among other factors, increases in occupancy costs, advertising costs, and wage and benefit costs, including the impact of changes in labor laws or as a result of class action or other lawsuits relating to wage and hour claims and other labor-related matters.
• Our ability to convert certain former Albertsons real estate sites to the Ross and dd’s DISCOUNTS formats in a timely and cost-effective manner and on acceptable terms, and the ability to achieve targeted levels of sales, profits and cash flows from these acquired store locations.

6

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis.  Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth.  In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

24

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis.  Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth.  In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

22

We are subject to operating risks as we attempt to execute on our merchandising and growth strategies.

The continued success of our business depends, in part, upon our ability to increase sales at our existing store locations, and to open new stores and to operate stores on a profitable basis.  Our existing strategies and store expansion programs may not result in a continuation of our anticipated revenue growth or profit growth.  In executing our off-price retail strategies and working to improve our efficiency, expand our store network, and reduce our costs, we face a number of operational risks, including:

We have received no written comments regarding our periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more preceding the end of our 2005 fiscal year and that remain unresolved.