Ross Stores (ROST) shares tumbled 11.19% in pre-market trading on Friday following the company's decision to withdraw its full-year guidance and provide a lower-than-expected second-quarter earnings forecast, primarily due to concerns over tariffs and their potential impact on profitability.

The discount retailer reported first-quarter earnings per share of $1.47, slightly above analysts' expectations. However, the company's cautious outlook for the coming quarter and the unexpected withdrawal of its full-year guidance sent shockwaves through the market. Ross Stores now projects second-quarter earnings per share between $1.40 and $1.55, well below the consensus estimate of $1.65, citing an anticipated cost impact of $0.11 to $0.16 per share due to announced tariffs.

CEO Jim Conroy cited "heightened macroeconomic and geopolitical uncertainty" as the primary reason for withdrawing the annual guidance, specifically pointing to "prolonged inflation and evolving trade policies" as key concerns. Conroy revealed that while Ross directly imports only a small portion of its merchandise, more than half of the goods it sells originate from China, making the company particularly vulnerable to ongoing trade tensions. As a result, Ross Stores expects pressure on its profitability if tariffs remain at elevated levels. The company's cautious stance and withdrawal of full-year guidance signal potential challenges ahead as it navigates an uncertain trade environment and persistent inflationary pressures.