Most Recent Articles In Denim
Latest Denim Articles
- Kingpins Shifts New York Timing, Location
- Victoria Beckham Debuts Denim at VVB
- Seven For All Mankind to Introduce Tailorless Flared Jeans
More Articles By
True Religion Apparel Inc.’s small improvement in third-quarter earnings was adequate to beat Wall Street’s estimates for the firm while the high end of its guidance for the fourth quarter matched analysts’ expectations.
While its largest business segment, U.S. consumer direct, saw sales move up 5.7 percent to $65.3 million, comparable sales in the category, the combination of same-store sales and e-commerce, declined 4.7 percent in the quarter. “While our same-store sales fell short of our expectations, we were able to exit the quarter with less slow-moving merchandise,” said Jeffrey Lubell, chairman, chief executive officer and chief merchant. “This puts us in a strong position heading into the holiday season.”
For the three months ended Sept. 30, net income attributable to the Vernon, Calif.-based premium jeans and sportswear firm grew 2.1 percent to $12.3 million, or 49 cents a diluted share, from $12.1 million, or 48 cents, in the comparable 2011 period. The consensus among Wall Street analysts was for earnings per share of 45 cents.
RELATED CONTENT: Click Here for More Earnings Coverage >>
Led by 35.4 percent growth in the U.S. wholesale business, to $29.8 million, net sales rose 9.4 percent to $118.5 million from $108.4 million in last year’s quarter. The 2012 performance was ahead of the revenue consensus among analysts of $113.2 million. The direct unit saw its share of company sales drop to 55.1 percent from 57 percent a year ago while U.S. wholesale, boosted by greater sales to the specialty and off-price channels, grew to 25.1 percent from 20.3 percent. International sales dropped 3 percent to $22.7 million.
On a Monday morning conference call, executives noted the company’s review of strategic alternatives, including a possible sale, was continuing with no set timetable or guarantee of a transaction.
In a discussion of merchandising direction, Lynne Koplin, president, pointed out that nondenim’s share of sales had grown to 35.1 percent of U.S. consumer direct volume, up from 28.8 percent a year ago, and that sportswear was expected to grow “at a faster pace than denim.”
Lubell added his voice to those in the premium denim market who expect to see upscale brands back away at least slightly from the focus on colored denim. “It’s in the lower-tier brands at this point.…We’ll continue with colored bottoms, but it won’t be 12 different colors of a particular bottom, maybe one or two,” he said in response to an analyst’s question.
For the nine months, net income was up 6.7 percent to $32.5 million, or $1.29 a diluted share, as sales grew 9.9 percent to $330.2 million.
The company now expects fourth-quarter EPS of between 52 and 58 cents a diluted share on revenues of $128 million to $133 million. Prior to the disclosure of quarterly results, analysts on average expected EPS of 58 cents on revenues of $128 million.
Thirty-five of the company’s 121 U.S. stores closed for at least part of last week because of Hurricane Sandy. The firm said that most had reopened but declined to estimate the impact on fourth-quarter results.