Ross Stores, Inc. reported sales of $311 million for the four weeks ended February 26, 2005, a 17% increase above the $266 million for the four weeks ended February 28, 2004. Comparable store sales for the month increased 6% over the prior year period.
On another subject, the Company reported that it has completed a preliminary review of its lease accounting in response to recent SEC clarification. Consistent with other public retailers, the Company plans to adjust the way it accounts for its operating leases, including the accounting for rent “holidays” and tenant allowances. These adjustments will have no impact on cash, revenues or comparable store sales.
In commenting on the expected impact to earnings of the accounting adjustment, Michael Balmuth, Vice Chairman, President and Chief Executive Officer, said, “We currently estimate that these adjustments will reduce earnings per share by about $.09 cumulatively for fiscal 2004 and prior years. Of this aggregate amount, approximately $.01 to $.02 would be related to fiscal year 2004. We currently project the impact to fiscal 2005 earnings per share to be about $.01. We have not yet determined whether these adjustments will require a restatement of our previously issued financial statements for fiscal 2003 and prior years, or whether the cumulative adjustment will be reflected entirely in the fourth quarter fiscal 2004 results. We believe, however, that a restatement is likely.”
