By Dean Seal

Shares of Ross Stores are on track to open lower after the company withdrew its full-year outlook, citing tariff uncertainty from its reliance on Chinese imports.

The stock was down 12% at $134.63 in premarket trading. When the market closed Wednesday, shares were up slightly from where they started the year.

The Dublin, Calif., chain of discount department stores said after the bell on Thursday that its profits would take a hit if President Trump's tariffs on China, the source of more than half of its goods, don't come down.

"Given the varying nature of tariff announcements, we are only providing an outlook for the second quarter at this time and are withdrawing our previously provided annual sales and earnings guidance," Chief Executive Jim Conroy said.

The tariffs are expected to cut an estimated 11 to 16 cents a share from Ross's earnings in the current quarter, which would have them coming in lower year over year.

The company's exposure to Chinese imports is higher than expected and endangers its merchandise margins, Jefferies analysts said in a research note. The uncertainty and withdrawn outlook overshadowed a solid first-quarter report, they said.

For the spring quarter that ended May 3, sales rose 2.6% to $4.98 billion. Analysts polled by FactSet had been expecting $4.96 billion. Earnings of $1.47 a share topped analyst estimates by 4 cents.

Conroy said a slow start to the spring season in February was followed by sharp improvements in March and April. Jefferies analysts pointed out that cosmetics was the company's strongest category and that, regionally, it performed best in the U.S. Southeast.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

May 23, 2025 08:04 ET (12:04 GMT)

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