Rue 21 2011 Annual Report Download - page 32

Fiscal Year Ended
January 28, January 29, January 30,
2012 2011 2010
Net Sales ............................................ 100.0% 100.0% 100.0%
Cost of goods sold ..................................... 62.3% 63.0% 64.2%
Gross profit .......................................... 37.7% 37.0% 35.8%
Selling, general and administrative expenses ................ 25.9% 25.7% 25.5%
Depreciation and amortization expense ..................... 3.5% 3.5% 3.2%
Income from operations ................................. 8.3% 7.9% 7.0%
Interest (Income) expense, net ............................ (0.0%) 0.0% 0.1%
Income before income taxes ............................. 8.3% 7.8% 6.9%
Provision for income taxes .............................. 3.1% 3.1% 2.7%
Net income ........................................... 5.1% 4.8% 4.2%
The following table summarizes the number of stores open at the beginning of the period and at the end of the
period.
Fiscal Year
2011 2010 2009
Stores at beginning of period ........................................... 638 535 449
Stores opened during period(1) .......................................... 120 105 88
Stores closed during period ............................................. (3) (2) (2)
Stores at end of period ................................................ 755 638 535
Store conversions during the period ...................................... 38 31 26
(1) Stores opened during period do not include existing stores that have been converted to our rue21 etc! layout.
Fiscal Year 2011 Compared to Fiscal Year 2010
Net Sales
In fiscal year 2011, our net sales increased 19.8%, or $125.6 million, to $760.3 million from $634.7 million in
fiscal year 2010. This increase in net sales was due to an increase of approximately 14.7% in the number of
transactions and an increase in the average dollar transaction of approximately 4.2%. The average dollar value of
transactions increased due to a higher average unit retail slightly offset by a decrease in units per transaction. During
fiscal year 2011, we opened 120 new stores and closed 3 stores compared to 105 new stores and 2 store closures in
fiscal year 2010. Our comparable store sales increased 0.4% in fiscal year 2011 compared to an increase of 2.1% in
fiscal year 2010. There were 611 comparable stores and 144 non-comparable stores open at January 28, 2012
compared to 523 and 115, respectively, at January 29, 2011.
In fiscal year 2011, net sales of girls apparel, girls accessories and guys apparel and accessories represented
55.2%, 26.4% and 18.4%, respectively, of total net sales compared to 55.9%, 25.7% and 18.4%, respectively, for
fiscal year 2010. For fiscal year 2011, the girls apparel, girls accessories and guys apparel and accessories categories
grew by approximately 18.1%, 22.7% and 19.8%, respectively, as compared to fiscal year 2010.
Gross Profit
Gross profit increased 22.1%, or $51.8 million, in fiscal year 2011 to $286.6 million from $234.8 million in
fiscal year 2010. Gross margin increased 70 basis points to 37.7% for fiscal year 2011 from 37.0% for fiscal year
2010. This increase was attributable to a 70 basis point increase in merchandise margin, primarily due to an
improvement in our initial mark-up rate in fiscal year 2011. Gross margin as a percent of sales was not impacted by
store occupancy, distribution and buying costs, as these costs were flat as a rate to net sales in fiscal year 2011
compared to fiscal year 2010.
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