US: Rue21 posts 16.4% increase in Q4 profit
- Q4 profit increased 16.4% to $15m
- Sales jumped 22.4% to $269.1m
- Gross margin improved 110 basis points to 37.6%
Rue21 opened 17 stores and closed two during the fourth quarter
US teen apparel retailer Rue21 has booked a 16.4% increase in fourth-quarter net profit, thanks to sales growth and improved margins.
Net income reached US$15m for the three months to 2 February, compared to $12.9m last year. The company said the results were impacted by $1.2m in one-off costs, and adjusted earnings came in at $15.8m.
Net sales jumped 22.4% to $269.1m from $219.9m a year ago, while comparable store sales climbed 0.7%. The company opened 17 new stores and closed two during the fourth quarter.
Gross margin improved 110 basis points to 37.6%, driven by improved merchandise margin of 70 basis points and leverage of expenses.
Over the full year, net income rose 12.7% to $43.9m over $39m the previous year, while net sales were up 18.6% to $901.9m against $760.3m last year.
President and CEO Bob Fisch said: "Fiscal 2012 was another year of consistent top and bottom line growth for Rue21, including record gross margin and double-digit growth in net income.
"We continue to focus on the qualities that make Rue21 appealing to our customers and our financial returns attractive for our shareholders: offering current fashion at every day great value, executing on our strategic square footage growth, and methodically delivering productivity and profitability gains every quarter."
Looking ahead, Rue21 expects fiscal 2013 diluted earnings per share to range from $2.10 to $2.15, excluding the impact of its investments in building its e-commerce platform, while comparable store sales growth is set to be in the low single digits.
For the first quarter, diluted earnings per share are likely to be in the range of $0.47-$0.50 and comparable store sales growth is forecast to be slightly negative to slightly positive.
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