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Rue21, Inc. Announces Third Quarter Fiscal 2010 Financial Results

Third Quarter Net Sales Increased 19.5% with Comparable Store Sales Increasing 1.8%

Management Raises Fiscal 2010 Earnings Guidance

WARRENDALE, Pa., Dec. 1, 2010 (GLOBE NEWSWIRE) -- rue21, inc. (Nasdaq:RUE) today announced its financial results for the third quarter and fiscal year-to-date ended October 30, 2010.

Highlights for the Quarter:

  • Net sales increased 19.5% to $163.9 million from $137.1 million for the comparable period a year ago, which ended October 31, 2009.  
  • Comparable store sales increased 1.8% on top of a 13.5% increase for the same period in 2009.  
  • The Company opened 33 stores in the quarter versus 29 in the same period last year. The Company converted an additional 9 stores to the rue21 etc! format versus 7 in the same period last year, and ended the quarter with 628 stores.  
  • Gross margin increased 40 bps to 36.6% from 36.2% in the third quarter of fiscal 2009, driven by a merchandise margin increase of 60 bps.   
  • Selling, general and administrative expenses increased 21.4% to $42.6 million, which included incremental public company and share-based compensation costs of $1.1 million.    
  • Third quarter net income increased 19.5% to $7.1 million from $6.0 million in the third quarter of fiscal 2009. Adjusting for incremental public company expenses and share-based compensation costs in the third quarter of fiscal 2010, net income increased 29.4%.  
  • Diluted earnings per share were $0.29 in the third quarter of fiscal 2010 compared to diluted earnings per share of $0.26 in the third quarter of fiscal 2009.  
  • Average diluted shares outstanding were 25.0 million in the third quarter of fiscal 2010 versus 23.1 million in the third quarter of fiscal 2009.   
  • The Company ended the third quarter of fiscal 2010 with $18.7 million in cash and cash equivalents, and with no long-term debt.

Highlights for the Fiscal Year-to-Date:

  • Net sales increased 20.1% to $444.6 million from $370.2 million for the comparable period a year ago, which ended October 31, 2009.   
  • Comparable-store sales for the period increased 2.4% on top of a 7.4% increase for the same period in 2009.  
  • Year-to-date the Company has opened 95 stores, closed 2 stores, and converted 31 stores to the rue21 etc! format.  
  • Gross margin increased 170 bps from the comparable period in 2009.  
  • Operating margin increased to 7.2% of net sales from 6.5% of net sales for the comparable period in 2009.  
  • Year-to-date net income increased 35.4% to $19.4 million from $14.3 million for the comparable period in 2009. Adjusting for incremental public company expenses and share-based compensation costs, year-to-date net income increased 52.2%.

Bob Fisch, rue21's President and CEO, stated: "We are pleased to report strong total sales and profit growth this quarter.    We continue to successfully deliver fashion and quality at a great value to underserved communities while at the same time building our presence and market share in larger markets. We have exciting initiatives to drive the sales this holiday season, and we believe that rue21's increasing brand awareness combined with the strength of our product categories and assortments will allow us to achieve our goals."

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