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Rue21, Inc. Announces First Quarter Fiscal Year 2013 Financial Results

Impact of 53 rd Week in Fiscal 2012 on Comparable Store Sales in Fiscal 2013:

Fiscal 2012 included an extra week in the fourth quarter of the year (the 53 rd week). For comparable sales reporting in the first quarter of fiscal 2013, sales are compared to the thirteen week period ended May 5, 2012.  

Stock Repurchase Program:

During the first quarter of fiscal 2013, the Company repurchased 351,703 shares for $10.4 million. The stock repurchase program was suspended on May 23, 2013.

Apax Partners Transaction:

On May 23, 2013, rue21 announced that it had entered into a definitive agreement under which funds advised by Apax Partners, a global private equity firm, will acquire all outstanding shares of rue21 for $42.00 per share in cash, or a total of $1.1 billion.  As part of the agreement, the Special Committee of rue21's Board of Directors, with the assistance of its advisors, is conducting an initial 40-day "go-shop" process during which it is actively soliciting, evaluating and potentially entering into negotiations with any parties willing to offer a superior acquisition proposal.  Pending the outcome of the go-shop process, the transaction is expected to close before the end of calendar 2013, subject to approval by the majority of the stockholders unaffiliated with the SKM II funds, rue21's largest stockholder, as well as customary closing conditions.

Outlook:

For fiscal 2013, the Company is lowering its prior guidance based on first quarter results and expects diluted earnings per share to be in the range of $1.98 to $2.03 versus its previous guidance of $2.00 to $2.05, and as compared to $1.76 in fiscal 2012. This incorporates 24.2 million average diluted shares expected for fiscal 2013 as compared to 24.9 million average diluted shares in fiscal 2012.  For the second quarter of fiscal 2013, the Company currently expects low single digit comparable store sales.  Diluted earnings per share for the second quarter are expected to be in the range of $0.51 to $0.53, including $0.03 relating to e-commerce, versus $0.36 in the second quarter last year.

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