Warrendale, PA–Rue21, inc. posted Thursday a better-than expected first quarter profit and double digit sales increase. The young adult-oriented specialty store then raised its full year outlook, but one less than retail analysts’ predicted.
For the quarter ended April 28, rue21 reported a 21% increase in its net profit to $11.6 million, or 46 cents a share, compared to $9.6 million, or 38 cents a share, a year ago.
Net sales rose 19% to $205.6 million. Comparable store sales grew 1.7% on top of a 5.2% increase in the same quarter last year. Gross margin narrowed to 38.8% from 38.9% a year ago.
Those figures were better than analysts’ average estimate expected: 43 cents a share on sales of $204.1 million.
Gaining Share in Small and Mid-Size Markets
“We were pleased to deliver strong results to our shareholders in the first quarter of fiscal 2012, and are looking forward to continuing our momentum into the second quarter and the remainder of the year,” said Bob Fisch, president/ceo. “Through our real estate expansion we are gaining market share in small and mid-size markets around the country, and we believe rue is rapidly becoming a favorite retail destination for both guys and girls who want the latest looks at every day great value.”
The company also announced that its board of directors had authorized a share repurchase program, enabling the buyback of up to $50 million of its common stock.
“This announcement of a share repurchase program reflects our financial strength and confidence in our business,” Fisch added.
Looking ahead, rue21 to see comparable store sales increase in the low single digits for second quarter. The company expects earnings during the quarter to hit 32 to 34 cents a share. Analysts’ consensus expects 34 cents.
For its full fiscal year, rue21 raised its forecast to earnings of $1.76 to $1.81 a share, up from its earlier guidance of $1.74 to $1.79 a share. Analysts’ average estimate expects currently $1.79 a share.