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.
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.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews