rue21 Earnings Preview

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rue21 (NAS: RUE) didn't hit the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Wednesday, Nov. 30. rue21 is an apparel retailer in the United States that offers men's and women's apparel at low prices.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back rue21, with four out of six rating it a buy and the remainder rating it a hold. Analysts like rue21 better than competitor Hot Topic overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $197 million in revenue this quarter. That would represent a rise of 20.2% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.33 per share. Estimates range from $0.32 to $0.33.

What our community says:
CAPS All-Stars are solidly backing the stock, with 91.7% giving it an outperform rating. The majority of the Fools are in agreement with the All-Stars, as 74.1% give it an outperform rating. Fools have embraced rue21, though the message boards have been quiet lately, with only 23 posts in the past 30 days. rue21's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
rue21's profit has risen year over year by an average of 36.4% over the past five quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

39.1%

38.9%

35.8%

36.6%

Operating Margin

7.1%

9.1%

9.3%

7.2%

Net Margin

4.4%

5.6%

5.7%

4.4%

One final thing: If you want to keep tabs on rue21's movements, and for more analysis on the company, make sure you add it to your Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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