Glitch Lingers at Ross Stores

As a result, the Pleasanton, Calif.-based company sees lingering impacts on sales and earnings in the second half of 2004. It still expects to open 80 new stores in the year, however.

The company initially said May 19 that the new merchandising system had created temporary inventory problems, which it expected to hurt sales and margins in the near term. At that time, the company brought down its second-quarter forecast to below the consensus and guided third-quarter earnings to 33 cents to 35 cents a share. Ross has since revised its third-quarter guidance to a profit of 25 cents to 30 cents a share.

In the third quarter, the Wall Street consensus is for a profit of 27 cents a share at Ross, according to Thomson First Call. That would compare with 33 cents a share in the prior-year period.

Looking to the fourth quarter, the company said on Aug. 5 that it expects earnings of 44 cents to 49 cents a share; the analyst consensus is 46 cents a share. Ross earned 48 cents a share in the fourth quarter last year.