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Rue21 Profit Rises - Update

3/21/2013 5:49 PM ET

Rue21 Inc. (RUE: Quote) Thursday said its fourth-quarter profit increased 16 percent from a year ago, driven mainly by continued double-digit revenue growth and strong margins. Earnings for the quarter came in ahead of Wall Street expectations, while revenues fell shy of estimates.

The teen apparel retailer also detailed its outlook for the first quarter and full year 2013, which is indicated to miss current estimates.

Warrendale, Pennsylvania-based Rue21's fourth-quarter profit improved to $15.0 million or $0.62 per share from $12.9 million or $0.52 per share last year.

Adjusted net income for the quarter was $15.8 million or $0.65 per share. Analysts polled by Thomson Reuters expected earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Rue21's revenues grew 22.4 percent to $269.1 million from $219.9 million last year. Analysts had a consensus revenue estimate of $270.49 million for the quarter. Comparable store sales increased 0.7 percent for the quarter.

Gross margin increased 110 basis points to 37.6 percent, reflecting improved merchandise margin and leverage of expenses.

Looking ahead, the company expects first quarter earnings in the range of $0.47 to $0.50 per share. Analysts currently expect the company to earn $0.54 per share for the first quarter.

For fiscal 2013, the company currently expect earnings in the range of $2.10 to $2.15 per share. Analysts currently expect earnings of $2.16 per share for the year.

Earnings guidance does not include the impact of the company's investments in the construction of its e-commerce platform. Rue21 expects e-commerce investments to have an impact of about $0.02 and $0.10 per share for first quarter and full year 2013, respectively.

RUE closed Thursday's regular trade at $28.46, down $0.38 or 1.32%, on a volume of 0.5 million shares on the Nasdaq. The stock further slipped $0.02 or 0.07% in after hours trade.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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Editors Pick
After reporting a bigger than expected increase in new orders for U.S. manufactured durable goods in the previous month, the Commerce Department released a report on Thursday that once again showed stronger than expected durable goods orders growth in the month of March. The report said durable goods orders surged up by 2.6 percent in March after jumping by a revised 2.1 percent in February. First-time claims for U.S. unemployment benefits rose by more than expected in the week ended April 19th, according to a report released by the Labor Department on Thursday, with initial jobless claims climbing further off their recent lows. The report said initial jobless claims rose to 329,000, an increase of 24,000 from the previous week's revised figure of 305,000. After giving back some ground in the previous session, stocks are likely to move back to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 40 points.
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