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99 Cents Only Delays Results; Stock Slips

The SEC is raising questions about how the retailer accounted for a sale of a division in 2000.

Updated from 9:05 a.m. EST

Shares of

99 Cents Only Stores


slid Wednesday after the company delayed reporting its fourth-quarter results following the receipt of a letter from the

Securities and Exchange Commission


The fast-growing dollar-store chain was due to report its results Wednesday.But the company said the SEC's corporate finance division is raising questions about how it accounted for a sale of a division in 2000. The retailer also said its results were awaiting final calculations on its California workers' compensation reserve.

The company said the SEC matter could affect results from "year 2000 and subsequent periods," adding that the impact would be "of a non-cash nature and would not affect the net worth of the company."

Despite that assurance, 99 Cents Only's shares were recently off 82 cents, or 3.3%, to $24.52.

Although the company didn't release its official earnings report, it did offer some unofficial numbers. 99 Cents Only said the workers' compensation reserve is estimated to have crimped per share earnings by 4 to 7 cents. Excluding that item, 99 Cents Only said fourth-quarter earnings would be 27 cents a share. Sales rose 17% to $247.5 million, and profit margins totaled 40.7%.

Consensus estimates called for earnings of 24 cents on sales of $246.95 million, according to Thomson One Analytics.

99 Cents Only said it plans to add 48 new stores in the Southwest during 2004, adding to its current 191. The company also said it plans to increase earnings per share by at least 20% in 2004.