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.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)