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rue21 inc. Reports Operating Results (10-K)

March 27, 2012 | About:
10qk

10qk

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rue21 inc. (RUE) filed Annual Report for the period ended 2012-01-28.

Rue21 Inc has a market cap of $670.3 million; its shares were traded at around $29.4 with a P/E ratio of 17.6 and P/S ratio of 0.9.

Highlight of Business Operations:

In fiscal year 2011, our net sales increased 19.8%, or $125.6 million, to $760.3 million from $634.7 million in fiscal year 2010. This increase in net sales was due to an increase of approximately 14.7% in the number of transactions and an increase in the average dollar transaction of approximately 4.2%. The average dollar value of transactions increased due to a higher average unit retail slightly offset by a decrease in units per transaction. During fiscal year 2011, we opened 120 new stores and closed 3 stores compared to 105 new stores and 2 store closures in fiscal year 2010. Our comparable store sales increased 0.4% in fiscal year 2011 compared to an increase of 2.1% in fiscal year 2010. There were 611 comparable stores and 144 non-comparable stores open at January 28, 2012 compared to 523 and 115, respectively, at January 29, 2011.

In fiscal year 2011, net sales of girls apparel, girls accessories and guys apparel and accessories represented 55.2%, 26.4% and 18.4%, respectively, of total net sales compared to 55.9%, 25.7% and 18.4%, respectively, for fiscal year 2010. For fiscal year 2011, the girls apparel, girls accessories and guys apparel and accessories categories grew by approximately 18.1%, 22.7% and 19.8%, respectively, as compared to fiscal year 2010.

In fiscal year 2010, our net sales increased 20.8%, or $109.1 million, to $634.7 million from $525.6 million in fiscal year 2009. This increase in net sales was due to an increase of approximately 20.3% in the number of transactions, primarily driven by new store openings. During fiscal year 2010, we opened 105 new stores and closed 2 stores compared to 88 new stores and 2 store closures in fiscal year 2009. Our comparable store sales increased 2.1% in fiscal year 2010 compared to an increase of 7.8% in fiscal year 2009. Comparable store sales increased by $115.6 million and non-comparable store sales decreased by $6.5 million for fiscal year 2010 compared to fiscal year 2009. There were 523 comparable stores and 115 non-comparable stores open at January 29, 2011 compared to 417 and 118, respectively, at January 30, 2010.

In fiscal year 2010, net sales of girls apparel, girls accessories and guys apparel and accessories represented 55.9%, 25.7% and 18.4%, respectively, of total net sales compared to 56.7%, 24.3% and 19.0%, respectively, for fiscal year 2009. For fiscal year 2010, the girls apparel, girls accessories and guys apparel and accessories categories grew by approximately 19.0%, 27.8% and 17.1%, respectively, as compared to fiscal year 2009.

Selling, general and administrative expense increased 21.6%, or $28.9 million to $163.0 million in fiscal year 2010 from $134.1 million in fiscal year 2009. As a percentage of net sales, selling, general and administrative expense increased 20 basis points to 25.7% in fiscal year 2010 as compared to 25.5% in fiscal year 2009. In fiscal year 2010, we incurred $3.1 million in public company expenses and stock-based compensation expense of $2.2 million. In fiscal year 2009, we incurred $2.5 million in public company expenses and stock-based compensation expense of $0.4 million. In November 2009, we and Apax Partners, L.P (Apax) agreed to terminate the letter agreement relating to financial advisory services provided to the Company. As part of termination agreement, we were required to pay Apax a one-time termination fee of $1.5 million, which is included as a component of public company expenses in fiscal year 2009. Excluding the impact of these items, selling, general and administrative expenses as a percentage of net sales, would have leveraged 10 basis points in fiscal year 2010.

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