UPDATE 1-Rue21 Q2 profit beats; gives weak earnings outlook

* Q2 EPS $0.26 vs est $0.25

* Sales up 14 pct, misses est

* Sees Q3 sales up 17-20 pct

* Sees Q3 EPS $0.25-$0.27 vs est $0.28

Aug 25 (Reuters) - Rue21 Inc (RUE.O) posted quarterly earnings that beat estimates by a cent on better margins, but the teen apparel retailer's third-quarter profit forecast fell short of market expectations.

The fast-fashion retailer, which went public in November 2009, saw sales and margins rise during the quarter as well-managed promotions and trendy clothes helped bring in more customers.

Warrendale, Pennsylvania-based rue21 earned $6.4 million, or 26 cents a share, in the second quarter, while analysts on average were expecting earnings of 25 cents a share, according to Thomson Reuters I/B/E/S.

The company, which operates more than 600 stores in 44 states, expects third-quarter sales to rise 17-20 percent. [ID:nWNAB0842]

The company's shares had risen 57 percent to touch a year-high of $37.63 in April, but have since fallen back to the levels it was trading at when it went public.

The shares were down at $23.27 Wednesday after the bell, after closing at $23.62 on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Anne Pallivathuckal)