Attached files
| file | filename |
|---|---|
| 8-K - 8-K - rue21, inc. | d316441d8k.htm |
Exhibit 99.1
rue21, inc. Announces Fourth Quarter and Fiscal Year 2011 Financial Results
EPS growth of 18.2% for the quarter and 28.1% for the fiscal year
Gross Margin expansion of 70 bps for the quarter and the fiscal year
Net Sales growth of 15.7% for the quarter and 19.8% for the fiscal year
Warrendale, PA – March 14, 2012 – rue21, inc. [NASDAQ: RUE] today announced its financial results for the fourth quarter and fiscal year ended January 28, 2012.
Highlights for the Fourth Quarter:
| • | Net sales increased 15.7% to $219.9 million from $190.1 million. Comparable store sales for the quarter were down 2.2%, following a 1.5% increase for the fourth quarter of fiscal 2010. |
| • | Gross margin increased 70 bps to 36.5% from 35.8%, driven by improved merchandise margin. |
| • | Selling, general and administrative expenses increased 17.6% to $52.1 million from $44.3 million. |
| • | The Company opened 17 new stores, closed 2 stores, and converted an additional 4 stores to the larger rue21 etc! format compared to opening 10 stores and closing 2 stores in the fourth quarter of fiscal 2010. |
| • | Operating income increased by 18.4% to $21.0 million from $17.7 million. |
| • | Net income increased by 18.7% to $12.9 million from $10.9 million. |
| • | Diluted earnings per share were $0.52 compared to diluted earnings per share of $0.44 in the fourth quarter of fiscal 2010. |
Highlights for Fiscal Year 2011:
| • | Net sales increased 19.8% to $760.3 million from $634.7 million. Comparable-store sales increased 0.4%, following a 2.1% increase for fiscal 2010. |
| • | Gross margin increased 70 bps to 37.7% from 37.0%. |
| • | The Company opened 120 new stores, closed 3 stores, and converted 38 stores to the rue21 etc! format. The Company ended the year with 755 stores. |
| • | Operating income increased by 26.1% to $62.8 million and was 8.3% of net sales as compared to $49.8 million or 7.9% of net sales in fiscal 2010. |
| • | Net income increased 28.8% to $39.0 million from $30.2 million. |
| • | Diluted earnings per share were $1.55 compared to diluted earnings per share of $1.21 for fiscal 2010. |
Balance sheet highlights as of January 28, 2012:
| • | Cash and short term investments increased 43.6% to $72.0 million. The Company did not borrow during the year and had no long term debt as of January 28, 2012. |
| • | In-store inventory per square foot was up 3.4% and total company inventory per square foot was up 10.0% as compared to the end of fiscal 2010. |
Bob Fisch, rue21’s President and CEO, stated: “In fiscal 2011 we were again able to meet our short and long-term objectives despite the promotional environment and economic pressures. We maintained our planned promotional cadence throughout 2011, allowing us to achieve margin expansion during a period when much of the sector suffered from margin erosion. In 2012 we will continue to drive profit growth by offering fashion at every day great value to our customers, growing square footage, and driving comp store sales with exciting initiatives.”
Outlook:
For fiscal 2012, the Company currently expects diluted earnings per share to be in the range of $1.74 to $1.79 as compared to $1.55 in fiscal 2011. This incorporates 25.4 million average diluted shares expected for fiscal 2012 as compared to 25.1 million average diluted shares in fiscal 2011. Diluted earnings per share for the first quarter are expected to be in the range of $0.42 to $0.44. The Company currently expects a low single digit comparable store sales increase in the first quarter of fiscal 2012 and for fiscal 2012.
Mr. Fisch further stated: “We are confident that our 2012 financial performance will match the earnings growth we have consistently delivered for our shareholders. Our spring merchandise assortment has resonated well with our customers. February has historically been a strong volume month for rue, and we again achieved sales that support our guidance for the quarter.”
Conference Call Information:
A conference call to discuss fourth quarter and fiscal 2011 financial results is scheduled for today, March 14, 2012 at 4:30 PM Eastern Time. To participate, dial toll-free (877) 719-9788 or 1-719-325-4756 (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 Company’s 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. rue21 currently operates 770 stores in 46 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 Company’s 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 Company’s Annual Report on Form 10-K filed March 29, 2011, 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 / Jill Gaul
ICR, Inc
203-682-8200
jteklits@icrinc.com
rue21, inc.
Consolidated Statements of Income
| Thirteen Weeks Ended | Fifty-two Weeks Ended | |||||||||||||||
| January 28, 2012 |
January 29, 2011 |
January 28, 2012 |
January 29, 2011 |
|||||||||||||
| (Unaudited) | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Net sales |
$ | 219,896 | $ | 190,093 | $ | 760,302 | $ | 634,728 | ||||||||
| Cost of goods sold (includes certain buying, occupancy and distribution center expenses) |
139,531 | 122,090 | 473,662 | 399,896 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
80,365 | 68,003 | 286,640 | 234,832 | ||||||||||||
| Selling, general, and administrative expense |
52,130 | 44,337 | 197,176 | 163,006 | ||||||||||||
| Depreciation and amortization expense |
7,262 | 5,947 | 26,618 | 21,980 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
20,973 | 17,719 | 62,846 | 49,846 | ||||||||||||
| Interest expense, net |
16 | (2 | ) | (9 | ) | 74 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
20,957 | 17,721 | 62,855 | 49,772 | ||||||||||||
| Provision for income taxes |
8,036 | 6,831 | 23,905 | 19,528 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 12,921 | $ | 10,890 | $ | 38,950 | $ | 30,244 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic income per common share |
$ | 0.53 | $ | 0.45 | $ | 1.60 | $ | 1.25 | ||||||||
| Diluted income per common share |
$ | 0.52 | $ | 0.44 | $ | 1.55 | $ | 1.21 | ||||||||
| Weighted average basic common shares outstanding |
24,467 | 24,335 | 24,417 | 24,277 | ||||||||||||
| Weighted average diluted common shares outstanding |
25,054 | 25,029 | 25,051 | 25,002 | ||||||||||||
rue21, inc.
Consolidated Balance Sheets
| January 28, | January 29, | |||||||
| 2012 | 2011 | |||||||
| (Unaudited) | ||||||||
| (in thousands, except per share data) | ||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 41,960 | $ | 50,111 | ||||
| Short term investments |
30,000 | — | ||||||
| Accounts receivable |
6,675 | 6,285 | ||||||
| Merchandise inventory, net |
131,136 | 96,051 | ||||||
| Prepaid expenses and other current assets |
14,338 | 10,580 | ||||||
| Deferred tax assets |
5,121 | 5,024 | ||||||
|
|
|
|
|
|||||
| Total current assets |
229,230 | 168,051 | ||||||
| Property and equipment, net |
117,798 | 91,371 | ||||||
| Other assets |
994 | 921 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 348,022 | $ | 260,343 | ||||
|
|
|
|
|
|||||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 103,914 | $ | 81,627 | ||||
| Accrued expenses and other current liabilities |
16,570 | 15,616 | ||||||
| Accrued payroll and related taxes |
12,045 | 12,053 | ||||||
| Deferred rent and tenant allowances, current portion |
8,652 | 7,033 | ||||||
| Accrued income and franchise taxes |
1,068 | 1,999 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
142,249 | 118,328 | ||||||
| Non-current liabilities: |
||||||||
| Deferred rent, tenant allowances and other long-term liabilities |
46,965 | 34,235 | ||||||
| Deferred tax liabilities |
11,585 | 5,651 | ||||||
|
|
|
|
|
|||||
| Total non-current liabilities |
58,550 | 39,886 | ||||||
|
|
|
|
|
|||||
| Commitments and Contingencies |
— | — | ||||||
| Stockholders’ equity: |
||||||||
| Common stock— par value $0.001 per share; 200,000 shares authorized; 24,476 and 24,380 shares issued and outstanding, respectively |
24 | 24 | ||||||
| Additional paid in capital |
37,696 | 31,552 | ||||||
| Retained earnings |
109,503 | 70,553 | ||||||
|
|
|
|
|
|||||
| Total stockholder’s equity |
147,223 | 102,129 | ||||||
| Total liabilities and stockholders’ equity |
$ | 348,022 | $ | 260,343 | ||||
|
|
|
|
|
|||||