Aug 1, 2012
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True Religion lowers forecast as women's segment disappoints

Aug 1, 2012

True Religion Apparel Inc reported lower-than-expected quarterly sales as women shoppers bought less of its spring and summer merchandise, prompting the premium denim maker to lower its full-year profit outlook.

Photo: True Religion

True Religion shares were down 13 percent at $22.75 on Tuesday after the bell. They closed at $26.24 on the Nasdaq.

The company said demand for its women's assortment -- which includes jeans and shirts with serape patterns, prints and colored stitching -- fell during the second quarter, forcing it to offer discounts.

"We are still a very prestigious brand. I call it a hiccup, but Wall Street likes to do what they do best ... ," CEO Jeffrey Lubell, who founded the company in 2002, said on a conference call with analysts.

The company outlined plans to turn around the women's segment by adding products at lower prices and improving styles in the high-end category with embellishments and color, before the key holiday selling season.

True Religion sells its namesake jeans priced between $170 and $360 at retail stores, upscale department stores and specialty boutiques.

The company now expects full-year earnings of $1.80 to $1.86 per share, down from its earlier forecast of $1.88-$1.95 per share.

Sales are expected to be in the range of $450 million to $455 million, down from its previous forecast of $450 million to $460 million.

Analysts were expecting a profit of $1.97 per share, on revenue of $467.8 million, according to Thomson Reuters I/B/E/S.

Second-quarter sales at the company rose 7 percent to $104.9 million but still fell short of estimates of $107.3 million.

Sales at its international segment fell 2 percent hit by lower wholesale sales in Korea and Canada.

However, quarterly profit at the company, known for making jeans with twisted seams and low flap pockets, rose to $9.8 million, or 39 cents per share, beating estimates by 4 cents per share.

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