For the first quarter 2005, the chain achieved netincome of $3.7 million, or 5 cents per share,compared to $10.2 million, or 14 cents per share forthe first quarter 2004. Profit for the second quarterwas $3.6 million or five cents per share compared to$3.5 million or five cents per share for the sameperiod last year.

99 Cents Only CEO Eric Schiffer attributes the chain's decreased earnings to internal efforts to improve operations this year, as well as increased workers' compensation and transportation expenses. This year, 99 Cents Only reduced its store-opening rate to roughly 5% in an effort to allow the company to focus on implementing improvement to its infrastructure and business processes. The reduced store opening rate negatively impacted the chain's revenue growth, Schiffer said in a statement.

Next year, however, 99 Cents Only plans to boost itsstore openings by at least 10%, or about 23 stores,including two to five Texas stores. Currently, thecompany owns and operates 226 stores in Arizona,California, Nevada and Texas. In 2007, the chain hopesto increase its store openings by at least 15% byexpanding into new metropolitan markets in existingand new states.