Comparable store sales for the same period grew 3% on top of a3% gain in the same quarter of 2004, and Ross CEO Michael Balmuthindicated during Wednesday's conference call that same store salesfor the rest of this year should be free from some of the problemsthat plagued the company last year. Said Balmuth, "Last year, theproblems associated with the implementation of our new merchandiseinformation system contributed to same store sales that declined 3%in the second and third quarters." The merchandise informationsystem problems also produced flat comparable store sales in thefourth quarter last year, Balmuth said, but the company believesthose problems are behind it.

In addition to the improvement of the merchandise informationsystem, Balmuth discussed a number of operational improvements thatRoss is working on, including streamlining of its distributioncenters. "We began implementation of new standards in ourdistribution centers in the first quarter," he said. The newstandards, expected to be fully implemented by 2006, are improvingoperations at the centers by "using industrial engineers to assesseach function of the distribution centers to create new standards,which will ultimately increase productivity," Balmuth said.

Ross last year launched its new dd's Discounts chain and,although Balmuth commented that it is early in the development ofthe chain, thus far the dd's stores "are performing slightly betterthan our expectations." The 10 California locations of dd's thatRoss opened last year during the third quarter average 26,000 grosssf, with similar departments to Ross but with a selection of brandsthat is similar to those of moderately priced department stores.Including the new chain, Ross operates about 663 Ross stores andthe 10 dd's Discounts, an increase of about 74 stores from thenumber at this time last year.