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8-K - FORM 8-K - rue21, inc. | l42171e8vk.htm |
Exhibit 99.1
rue21, inc. Announces Fourth Quarter and Fiscal Year 2010 Financial Results
Net Sales for the Fourth Quarter of 2010 Increased 22% to $190 million
Net Sales for Fiscal Year 2010 Increased 21% to $635 million
EPS of $0.44 for the Fourth Quarter of 2010 and $1.21 for Fiscal Year 2010
Warrendale, PA March 15, 2011 rue21, inc. [NASDAQ: RUE] today announced its financial results
for the fourth quarter and fiscal year ended January 29, 2011.
Highlights for the Fourth Quarter of Fiscal Year 2010:
| Net sales increased 22.3% to $190.1 million from $155.4 million in the fourth quarter of fiscal year 2009, which ended January 30, 2010. | ||
| Comparable store sales increased 1.5% on top of an 8.6% increase for the same period in 2009. | ||
| The Company opened 10 stores in the quarter versus 3 in the same period last year. | ||
| Gross margin increased to 35.8% from 35.7% in the fourth quarter of fiscal year 2009. | ||
| Fourth quarter net income increased 41% to $10.9 million from $7.7 million in the fourth quarter of fiscal year 2009. | ||
| Diluted earnings per share were $0.44 compared to diluted earnings per share of $0.32 in the fourth quarter of fiscal year 2009. | ||
| Average diluted shares outstanding were 25.0 million in the fourth quarter of fiscal 2010 versus 24.3 million in the comparable period last year. |
Highlights for Fiscal Year 2010:
| Net sales increased 20.8% to $634.7 million from $525.6 million in fiscal year 2009. | ||
| Comparable-store sales increased 2.1% on top of a 7.8% increase in fiscal year 2009. | ||
| The Company opened 105 stores, closed 2 stores, and converted 31 stores to the rue21 etc! format. The Company ended the year with 638 stores in 44 states. | ||
| Gross margin increased 120 bps to 37.0% from 35.8% in fiscal year 2009. | ||
| Operating margin increased to 7.9% of net sales from 7.0% of net sales in fiscal year 2009. | ||
| Net income increased 37.4% to $30.2 million from $22.0 million in fiscal year 2009. | ||
| Diluted earnings per share were $1.21 versus $0.96 for fiscal 2009. | ||
| The Company ended fiscal 2010 with no long-term debt and $50.1 million in cash and cash equivalents compared to $26.8 million at the end of fiscal year 2009, an 87% increase. |
Bob Fisch, rue21s President and CEO, stated: We are pleased with the consistent performance we
were able to deliver to our shareholders in 2010, topped off by 38% earnings per share growth in
the fourth quarter. We opened 105 stores in 2010 which performed above our expectations. The
Company had strong growth across all categories, with our etc! accessories merchandise leading the
way as we converted 31 stores during the year to our larger etc! format. We are planning for 110
new stores and approximately 35 conversions in 2011. I am pleased with February and early March
results due to our excellent selling of regular priced merchandise in all categories of business.
We feel well positioned to achieve another quarter of profitable growth.
Outlook:
For fiscal year 2011, the Company currently expects diluted earnings per share to be in the range
of $1.40 to $1.44 as compared to $1.21 in fiscal year 2010. This is based on 25.2 million average
diluted shares expected for fiscal year 2011 as compared to 25.0 million average diluted shares in
fiscal year 2010. For the first quarter, the Company currently expects diluted earnings per share
to be in the range of $0.27 to $0.29 as compared to $0.23 in the first quarter of fiscal year 2010.
The Company currently expects a low to mid single digit comparable store sales increase in the
first quarter of fiscal 2011.
Conference Call Information:
A conference call to discuss fourth quarter and fiscal 2010 financial results is scheduled for
today, March 15, 2011 at 4:30 PM Eastern Time. To participate, dial toll-free (888) 556-4997 or
(719) 325-2230 (international). The conference call will also be webcast live at www.rue21.com
under the Investor Relations section. A replay of this call will be available on the Investor
Relations section of the Companys website, www.rue21.com, within two hours of the
conclusion of the call and will remain on the website for ninety days.
About rue21, inc.
rue21 is a leading specialty apparel retailer offering exclusive branded merchandise and the newest
trends at a great value. At the end of the fourth quarter of fiscal 2010, the Company operated 638
stores in 44 states. Learn more at www.rue21.com.
Forward Looking Statements:
Certain statements herein, including statements relating to future store openings and growth
strategies, are forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the
Companys current expectations or beliefs concerning future events and actual results of operations
may differ materially from historical results or current expectations. Any such forward-looking
statements are subject to various risks and uncertainties, including the strength of the economy,
consumer spending, our ability to effectively identify and respond to changing fashion trends, our
ability to compete with other retailers, our strategy and expansion plans, implementation of
systems upgrades, reliance on key personnel, trade restrictions, events that may affect our vendors
or their ability to finance their operations, availability of suitable new store locations and
other factors which are set forth in the Companys Annual Report on Form 10-K filed March 31, 2010,
and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The
Company does not undertake to
publicly update or revise its forward-looking statements, whether as
a result of new information, future events or otherwise.
Contact:
Joseph Teklits / Melissa Mackay
ICR, Inc
203-682-8200
jteklits@icrinc.com
ICR, Inc
203-682-8200
jteklits@icrinc.com
rue21, inc.
Consolidated Statements of Income
Thirteen weeks ended | Fifty-two weeks ended | |||||||||||||||
January 29, | January 30, | January 29, | January 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Unaudited) | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales |
$ | 190,093 | $ | 155,386 | $ | 634,728 | $ | 525,600 | ||||||||
Cost of goods sold (includes certain buying,
occupancy and distribution center expenses) |
122,090 | 99,960 | 399,896 | 337,693 | ||||||||||||
Gross profit |
68,003 | 55,426 | 234,832 | 187,907 | ||||||||||||
Selling, general, and administrative expense |
44,337 | 37,862 | 163,006 | 134,078 | ||||||||||||
Depreciation and amortization expense |
5,915 | 4,703 | 21,852 | 16,898 | ||||||||||||
Income from operations |
17,751 | 12,861 | 49,974 | 36,931 | ||||||||||||
Interest expense, net |
30 | 99 | 202 | 532 | ||||||||||||
Income before income taxes |
17,721 | 12,762 | 49,772 | 36,399 | ||||||||||||
Provision for income taxes |
6,831 | 5,040 | 19,528 | 14,382 | ||||||||||||
Net income |
$ | 10,890 | $ | 7,722 | $ | 30,244 | $ | 22,017 | ||||||||
Basic income per common share |
$ | 0.45 | $ | 0.33 | $ | 1.25 | $ | 0.99 | ||||||||
Diluted income per common share |
$ | 0.44 | $ | 0.32 | $ | 1.21 | $ | 0.96 | ||||||||
Weighted average basic common shares outstanding |
24,335 | 23,530 | 24,277 | 22,267 | ||||||||||||
Weighted average diluted common shares
outstanding |
25,029 | 24,281 | 25,002 | 23,037 |
rue21,
inc. and subsidiary
Consolidated Balance Sheets
January 29, | January 30, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
(in thousands, except per share data) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 50,111 | $ | 26,751 | ||||
Accounts receivable |
6,733 | 3,834 | ||||||
Merchandise inventory, net |
96,051 | 72,693 | ||||||
Prepaid expenses and other current assets |
10,580 | 6,783 | ||||||
Deferred tax assets |
5,024 | 4,286 | ||||||
Total current assets |
168,499 | 114,347 | ||||||
Property and equipment, net |
91,371 | 73,147 | ||||||
Other assets |
921 | 937 | ||||||
Total assets |
$ | 260,791 | $ | 188,431 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 82,075 | $ | 59,963 | ||||
Accrued expenses and other current liabilities |
15,616 | 14,384 | ||||||
Accrued payroll and related taxes |
12,053 | 10,486 | ||||||
Deferred rent and tenant allowances, current portion |
7,033 | 5,509 | ||||||
Accrued income and franchise taxes |
1,999 | 2,401 | ||||||
Total current liabilities |
118,776 | 92,743 | ||||||
Long-term liabilities: |
||||||||
Long-term debt |
| | ||||||
Deferred rent, tenant allowances and other long-term liabilities |
34,235 | 23,991 | ||||||
Deferred tax liabilities |
5,651 | 4,249 | ||||||
Total long-term liabilities |
39,886 | 28,240 | ||||||
Total liabilities |
158,662 | 120,983 | ||||||
Commitments and Contingencies |
||||||||
Stockholders equity: |
||||||||
Common stock par value $0.001 per share; 200,000 shares
authorized; 24,379 issued and outstanding at January 29, 2011;
24,237 shares issued and outstanding at January 30, 2010 |
24 | 24 | ||||||
Additional paid in capital |
31,552 | 27,115 | ||||||
Retained earnings |
70,553 | 40,309 | ||||||
Total stockholders equity |
102,129 | 67,448 | ||||||
Total liabilities and stockholders equity |
$ | 260,791 | $ | 188,431 | ||||