ROSS STORES, INC.ROST

ROSS STORES, INC. Fair Value Disclosure

10-KFiled Mar 31, 20262 min read
Fair Value Measurements
FASB ASC 820, Fair Value Measurement, establishes a three-tier fair value hierarchy that 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.
The underlying assets held in Cash and cash equivalents, and restricted cash and cash equivalents include bank deposits, money market mutual funds, and U.S. Government and agency securities for which the fair value is determined using quoted prices for identical assets in active markets, which are considered Level 1 inputs. The fair values of Cash and cash equivalents, and restricted cash and cash equivalents as of January 31, 2026 and February 1, 2025 are as follows:

($000)20252024
Cash and cash equivalents (Level 1)
$4,594,392 $4,730,744 
Restricted cash and cash equivalents (Level 1)
$67,581 $65,718 

The underlying assets in the Company’s nonqualified deferred compensation program are included in Other long-term assets and Other long-term liabilities on the Consolidated Balance Sheets. As of January 31, 2026, the underlying assets consisted of participant-directed mutual funds (Level 1) and fixed-income securities (Level 2). The mutual funds all have quoted market prices in active markets and are classified as Level 1. The fixed-income securities are measured at contract value, which represents the amount available to participants upon withdrawal and are classified as Level 2. As of February 1, 2025, the underlying assets primarily consisted of participant-directed mutual funds that had quoted market prices in active markets and were classified as Level 1.

The fair value of the Company’s nonqualified deferred compensation program assets as of January 31, 2026 and February 1, 2025 are as follows:

($000)20252024
Mutual funds (Level 1)$181,532 $196,786 
Fixed-income securities (Level 2)37,122 — 
Total$218,654 $196,786 
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Historical Timeline

Fiscal YearFiled
2026Mar 31, 2026Showing above
2025Apr 1, 2025
2024Apr 2, 2024
2023Mar 28, 2023
2022Mar 29, 2022

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueLeasesSegmentsDebtCommitmentsStock CompensationNew Standards