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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast