Shares of True Religion Apparel Inc. tumbled nearly 4 percent in after-hours trading Tuesday after the firm reported second-quarter profits that fell short of analysts’ expectations.
In the three months ended June 30, the Vernon, Calif.-based marketer of premium denim and sportswear reported net income of $7.5 million, or 30 cents a diluted share, 31.4 percent below the $11 million, or 45 cents, reported in the 2009 quarter. Excluding separation costs resulting from the departure of Michael Buckley as president of the company, earnings per share were 42 cents, 4 cents below the 46 cents anticipated, on average, by analysts.
Sales moved ahead 14 percent to $82.1 million from $72.1 million in the year-ago period as consumer direct sales expanded 47.2 percent, to $41.5 million, and wholesale revenues receded 16.7 percent to $25.7 million. Same-store sales were up 6.7 percent, the company said, adding that business in the boutique channel grew for the first time in nine quarters.
“During the quarter, we continued to invest in the growth of our international businesses by opening full-price stores in Tokyo and London and establishing a joint venture in a key part of Europe,” said Jeffrey Lubell, chairman, chief executive officer and chief merchant of True Religion. The firm joined forces with UNIFA Premium GmbH to handle wholesale operations in Germany and five nearby markets.
Michael Egeck succeeded Buckley as president of True Religion in May.
The company closed the quarter with no long-term borrowings and cash and cash equivalents of $121 million, up from $105.5 million at the end of the calendar year.
For the six months to date, net income fell 14.4 percent to $15.9 million, or 64 cents a diluted share, while sales rose 17.9 percent to $160.1 million.
Shares closed Tuesday at $23.62, down 61 cents, or 2.5 percent, on Tuesday, and fell another 92 cents to $22.70 in the first two hours after second-quarter results were released.