US: Rue21 Q2 profit plummets on weak trading
- Profit falls to $1.1m from $9.1m
- Sales grew 13.5% to $229.3m versus $202.1m
- Sees "prolonged period of top line weakness"
Higher sales failed to offset weaker trading during the second quarter for teen apparel retailer Rue21, which saw net profit plummet 88%.
The company, which is to be acquired by private equity firm Apax Partners for US$1.1bn, said net income was US$1.1m for the 13 weeks to 3 August, compared to $9.1m in the same period of last year. Sales grew 13.5% to $229.3m from $202.1m.
Rue21 in May said Apax Partners will pay $42.00 per share in cash for the company which operates 932 stores. The deal is expected to close before the end of the 2013 calendar year.
Year-to-date profit nearly halved to $11.9m from $20.7m last year, while sales reached $453.7m, up 11.3% on $407.7m in the prior year.
"While we expect for conditions to improve for the teen retail sector into the holiday season, we are prepared to manage the business for a prolonged period of top line weakness, if necessary," the company said in an SEC filing.
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