Mar 17, 2010
Rue21 fourth quarter profit tops Street
Mar 17, 2010
March 16 (Reuters) - Youth apparel retailer rue21 Inc (RUE.O) posted a better-than-expected adjusted fourth-quarter profit, helped by better same-store sales and lower interest expense, and forecast a first-quarter profit above market expectations.
Rue21 expects a profit of between 16 cents and 18 cents a share in the first quarter. Analysts were looking for a profit of 15 cents a share, according to Thomson Reuters I/B/E/S.
The company forecast 2010 earnings of between $1.08 and $1.13 a share. Analysts were expecting full-year earnings of $1.04.
On a conference call with analysts, the retailer forecast a 100 basis point improvement in gross margins for 2010 and a 30 to 50 basis points rise in operating margins for the period.
Rue21 also forecast capital expenditure of $32 million in 2010, against $23.4 million in full year 2009.
The company, which went public in November 2009, earned $7.7 million, or 32 cents a share, compared with $4.6 million, or 20 cents a share, a year ago.
Excluding a one-time termination fee, it earned 36 cents a share.
Revenue rose 30 percent to $155.4 million.
Analysts on average were looking for a profit of 30 cents a share, before items, on revenue of $149.7 million.
Same store sales rose 8.6 percent in the fourth quarter, while interest expense for the period fell 55 percent.
"We believe we will have a strong spring break season and continue with our momentum to gain market share during the course of the entire year," Chief Executive Bob Fisch said on the call.
The specialty apparel retailer operated 535 stores at the end of the fourth quarter.
Shares of the Warrendale, Pennsylvania-based retailer were trading up 25 cents. They closed at $34.10 Tuesday 16 March on Nasdaq. (Reporting by Vidya Lakshmi in Bangalore; Editing by Maju Samuel)
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