US: Rue21 lifts FY outlook, sees holiday momentum
- Q3 profit fell 6.6% to $8.2m
- Sales up 15.6% to $225.2m
- Gross margin improved to 37.8%
- Company raised FY earnings guidance to $1.83 to $1.86
The teen apparel retailer has lifted its full-year adjusted earnings per share to range from $1.83 to $1.86
Teen apparel retailer Rue21 has lifted its full-year earnings guidance after achieving record sales gains over the Thanksgiving holiday weekend.
Net income slipped 6.6% to US$8.2m for the 13 weeks to 27 October, compared to $8.7m the same period last year. However, stripping out an expected $2.9m pre-tax litigation expense to settle wage claims in California, adjusted net income for the quarter was $10.0m.
Sales rose 15.6% to $225.2m, compared to $194.8m the same period last year. The company, which opened 29 stores during the quarter, said the increase was driven by the addition of new stores and comparable store sales growth of 0.2%.
Gross margin improved to 37.8%, compared to 36.7% the prior year.
President and CEO Bob Fisch said: "We executed our plan for the third quarter and continued our history of quality top and bottom line earnings growth, highlighted by a record third quarter gross margin.
"We achieved solid comp store sales growth above our plan in the junior's sportswear division, which is our largest category and will benefit the overall business going forward."
The company now expects full-year adjusted earnings per share to range from $1.83 to $1.86, compared to previous guidance of $1.80 to $1.85.
Fisch continued: "We are very focused on achieving our results for the fourth quarter and we were excited by the record sales gains we achieved over the Thanksgiving holiday weekend without increasing our promotional cadence from last year.
"We have great momentum going into December in addition to strong opportunities and initiatives that we believe will bring us a very happy holiday season and position us well for 2013."
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