Jo-Ann Stores ( JAS) slashed earnings guidance, warning of weak sales, and cut back its store-opening plan.

The Hudson, Ohio, fabric retailer said same-store sales rose 0.2% from a year ago in September, while total sales rose 5.3% to $176 million. The company called its sales performance for the first nine weeks of the second half "a major disappointment" and warned that sales in stores open at least a year would be flat for the rest of the fiscal year ending in January. Jo-Ann's same-store sales rose 3.3% in the comparable stretch last year.

The company said merchandising chief David Bolen would leave and that Jo-Ann would look for a successor. The company also said it would open just 25-30 stores next year, down from this year's 44, in a bid to protect its balance sheet while results are weak.

"Based on the above factors, it is clear that the company will not reach its earlier annual earnings guidance of $1.65 to $1.75," Jo-Ann said. "However, the final earnings that the company is ultimately able to realize in fiscal 2006 is highly dependent on the sales performance and gross margin rates that are achieved over the next four months. Given the wide range of possible sales and gross margin rate outcomes, the company has determined that it is prudent to suspend earnings per share guidance for the near-term."

Jo-Ann fell 71 cents Wednesday to $16.59.