Barclays Maintains an 'Equalweight' on rue21, inc. (RUE); 2Q FY11 Earnings Review
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Price: $41.99 --0%
Rating Summary:
1 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Equalweight' on rue21, inc. (NASDAQ: RUE) price target of $29.00.
Barclays analyst says, 'While the AUR was up 9% in 2Q, transactions were down 6% and units must also have been down, resulting in the below-plan flat comp for the quarter. It looks to us like the customer pulled back, but management indicated it transitioned to fall too early and did not have enough summer goods in July. Management indicated summer inventory was down 20% compared to last year, RUE did not want to promote fall goods so early, and we do note the gross margin came in above our estimate. Regardless, it sounds like back to school got off to a slow start at RUE, as it has for many other retailers. Management guided to +LSD comps for 3Q and indicated August comps gave it confidence in the guidance. While RUE talked a lot about not having the need to raise prices, the AUR increases over the past several quarters have been in the high single digits and we have thought RUE's pricing does not look that compelling. Despite the weaker comp, we note that the spread between comp, square footage and total sales improved in 2Q, indicating new stores opened well."
For more ratings news on rue21, inc. click here and for the rating history of rue21, inc. click here.
Shares of rue21, inc. closed at $26.97 yesterday.
Barclays analyst says, 'While the AUR was up 9% in 2Q, transactions were down 6% and units must also have been down, resulting in the below-plan flat comp for the quarter. It looks to us like the customer pulled back, but management indicated it transitioned to fall too early and did not have enough summer goods in July. Management indicated summer inventory was down 20% compared to last year, RUE did not want to promote fall goods so early, and we do note the gross margin came in above our estimate. Regardless, it sounds like back to school got off to a slow start at RUE, as it has for many other retailers. Management guided to +LSD comps for 3Q and indicated August comps gave it confidence in the guidance. While RUE talked a lot about not having the need to raise prices, the AUR increases over the past several quarters have been in the high single digits and we have thought RUE's pricing does not look that compelling. Despite the weaker comp, we note that the spread between comp, square footage and total sales improved in 2Q, indicating new stores opened well."
For more ratings news on rue21, inc. click here and for the rating history of rue21, inc. click here.
Shares of rue21, inc. closed at $26.97 yesterday.
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