For the fourth quarter fiscal 2005, the chain posted profit of $145.3 million, or 46 cents per share, compared to $133.9 million, or 41 cents per share, in the fourth quarter of fiscal 2004. Analysts were expecting a per-share profit of 49 cents, according to Thomson First Call.

The chain attributed the increase in sales to new stores and one additional week in the reporting period. However, the increased sales were offset by a 1.6% decrease in same-store sales and a decreased gross profit. During the quarter, gross profit was $730.9 million or 29.5%, versus $660 million, or 30% of sales, in the prior year quarter. The decrease in the gross profit rate is primarily attributable to increased markdowns to reduce older inventory levels; lower mark-ups on receipts in the quarter; higher transportation expenses primarily attributable to increased fuel costs; and increased inventory shrink.

For the entire fiscal year, net sales were $8.58 billion, an increase of 12% compared to fiscal 2004, and same-store sales increased 2%. Net income for fiscal 2005 was also up to $350.2 million, or $1.08 per share, from $344.2 million, or $1.04 per share, in fiscal 2004. Gross profit fell to $2.46 billion, or 28.7% of net sales, compared with $2.26 billion, or 29.5% of net sales, in 2004.