Year-to-Date net income up at apparel retailer rue21

07 Dec '11

4 min read

rue21 inc. announced its financial results for the third quarter and fiscal year-to-date ended October 29, 2011.

Highlights for the Third Quarter:
• Net sales increased 18.8% to $194.8 million from $163.9 million in the third quarter of fiscal 2010 ended October 30, 2010. Comparable store sales for the quarter were flat.
• The Company opened 30 new stores and converted an additional 8 stores to the larger rue21 etc! format compared to opening 33 stores and converting 9 stores to the etc! format in the third quarter of fiscal 2010. The Company ended the quarter with 740 stores.
• Gross margin increased 10 bps to 36.7% from 36.6% in the third quarter of fiscal 2010, driven by a merchandise margin increase of 20 bps.
• Selling, general and administrative expenses were $50.8 million or 26.1% of net sales. This compares to $42.6 million or 26.0% of net sales in the third quarter of fiscal 2010.
• Operating income increased by 17.4% to $13.8 million as compared to $11.7 million in the third quarter of fiscal 2010.
• Net income increased 22.4% to $8.7 million from $7.1 million in the third quarter of fiscal 2010.
• Diluted earnings per share were $0.35 compared to diluted earnings per share of $0.29 in the third quarter of fiscal 2010.

Balance sheet highlights as of October 29, 2011:
• Cash and cash equivalents increased to $36.1 million as of October 29, 2011, as compared to $18.7 million as of October 30, 2010, with no long-term debt.
• Inventory per square foot at the end of the third quarter of fiscal 2011 was up 2.5% as compared to the end of the third quarter of 2010.

Highlights for the Fiscal Year-to-Date as of October 29, 2011:
• Net sales increased 21.5% to $540.4 million for the period ending October 29, 2011 from $444.6 million for the comparable period a year ago. Comparable-store sales increased 1.5% for the 2011 year-to-date period, following a 2.4% increase for the comparable year-to-date period in 2010.
• The Company opened 103 new stores, closed 1 store, and converted 34 stores to the rue21 etc! format.
• Gross margin increased 70 bps to 38.2% from 37.5% for the comparable period in 2010.
• Operating income increased by 30.3% to $41.9 million and was 7.7% of net sales as compared to $32.1 million or 7.2% of net sales in the comparable period of 2010.
• Net income increased 34.5% to $26.0 million from $19.4 million for the comparable period in 2010.
• Diluted earnings per share were $1.04 compared to diluted earnings per share of $0.77 for the comparable period of fiscal 2010

Bob Fisch, rue21's President and CEO, stated, "We are pleased to have once again delivered on our sales and financial goals in a tough economic and promotional environment. We believe our ability to offer fashion at every day great value continues to provide us with growth opportunities in any economy. Our ability to control promotions and run at regular price on our trend right fashion items enabled us to post a gross margin increase for the quarter as we have done consistently every quarter this year."

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