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rue21 inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 29, 2012 10:03PM

rue21 inc. (RUE) filed Quarterly Report for the period ended 2012-10-27. Rue21, Inc. has a market cap of $696 million; its shares were traded at around $28.09 with a P/E ratio of 17.3 and P/S ratio of 0.9.



Highlight of Business Operations:

During the third quarter of 2012, our net sales increased 15.6%, or $30.4 million, to $225.2 million as compared to $194.8 million in the third quarter of 2011. Net sales also increased primarily due to an increase of 8.4% in the average dollar value of transactions. The average dollar value of transactions increased due to higher units per transaction and, to a lesser extent by an increase in average unit retail. This increase in net sales was also due to an approximate 7% increase in the number of transactions, driven by new store openings during the third quarter of 2012. During the third quarter of 2012, we opened 29 new stores and closed 1 store compared to 30 new stores in the third quarter of 2011. Our comparable store sales increased 0.2% in the third quarter of 2012 compared to flat in the third quarter of 2011. There were 698 comparable stores and 164 non-comparable stores open at October 27, 2012 compared to 580 and 160, respectively, at October 29, 2011.

Selling, general and administrative expense increased 25.5%, or $12.9 million, to $63.7 million in the third quarter of 2012 as compared to $50.8 million in the third quarter of 2011. As a percentage of net sales, selling, general and administrative expense increased to 28.3% in the third quarter of 2012 as compared to 26.1% in the third quarter of 2011.

Administrative and general expense increased $4.9 million in the third quarter of 2012 as compared to the third quarter of 2011. The increase was largely attributable to a prospective California wage and hour case settlement and related costs of $2.9 million. As a percentage of sales, the wage and hour case settlement and related costs were 1.3% in the third quarter of 2012. Additionally, stock compensation expense increased 79%, or $1.1 million, to $2.5 million in the third quarter of 2012 as compared to $1.4 million in the third quarter of 2011. As a percentage to sales, stock compensation expense increased 40 basis points to 1.1% in the third quarter of 2012 as compared to 0.7% in the third quarter of 2011.

Net sales increased 17.1%, or $92.4 million, to $632.8 million for the Year-to-date 2012 period from $540.4 million for the Year-to-date 2011 period. The increase in net sales was due to an approximately 11% increase in the number of transactions, primarily driven by new stores opened in 2012. Net sales also increased due to an increase of 5.8% in the average dollar value of transactions. The average dollar value of transactions increased due to a higher average unit retail and units per transaction to a lesser extent. During the Year-to-date 2012 period, we opened 108 new stores and closed 1 store as compared to 103 new stores and one closure in the Year-to-date 2011 period. Our comparable store sales increased 0.8% for the Year-to-date 2012 period compared to an increase of 1.5% for the Year-to-date 2011 period. There were 698 comparable and 164 non-comparable stores at October 27, 2012 compared to 580 and 160, respectively, at October 29, 2011.

Selling, general and administrative expense increased 20.9%, or $30.3 million, to $175.3 million in the Year-to-date 2012 period as compared to $145.0 million in the Year-to-date 2011 period. As a percentage of net sales, selling, general and administrative expense increased 90 basis points to 27.7% in the Year-to-date 2012 period as compared to 26.8% in the Year-to-date 2011 period.

Read the The complete Report



Stocks Discussed: RUE,
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