True Religion Apparel Inc. late Thursday posted first-quarter gains in both income and sales, exceeding its targets for the period.
For the three months ended March 31, net income attributable to True Religion was up 7 percent to $9 million, or 36 cents a diluted share, from $8.4 million, or 34 cents, in the year-ago quarter. Analysts, on average, expected earnings per share of 26 cents.
Sales rose 20.4 percent to $93.8 million from $77.9 million, with a comparable-store sales gain of 7.4 percent. By segment, the firm’s U.S. consumer direct business rose 37.6 percent to $53.4 million, and represented 56.9 percent of total sales. Sales for the wholesale operation fell 13.6 percent to $20.9 million, hurt by softness in women’s premium denim in the department store channel. Sales in the international segment gained 34 percent to $18.5 million.
Jeffrey Lubell, chairman and chief executive officer, said, “We are off to a good start for 2011 as we exceeded our net sales and profitability targets for the first quarter of the year.”
He told analysts on a conference call that the company’s initiatives include growing its domestic retail store base, expanding its international business and improving the U.S. wholesale segment.
“Our business continues to generate positive net cash even as we invest for future growth. We ended the quarter with $156 million in cash and we carry no debt,” he said.
While the company faces a “substantial increase in cotton prices,” Lubell said the company has made the “appropriate investments in our infrastructure to support our business so we can continue to generate cash flow to fund our strategic initiatives.”
At the end of the quarter, the firm operated 96 stores in the U.S., four stores in Japan, one store in the U.K., two stores in Germany and one store in Canada.