News of True Religion Apparel Inc.'s stellar fourth quarter earnings were dampened by the announcement that co-founder Kymberly Lubell is leaving the company.

Lubell founded the trendy denim company in 2002 with her husband and chief executive Jeff Lubell.

The company reported fourth quarter net income of $4.9 million (21 cents per share), up 33 percent from $3.7 million (16 cents) for the same period a year earlier. Analysts polled by Thomson Financial had projected earnings of 22 cents.

Sales for the Los Angeles company were up 17 percent to $29.8 million, driven by increased sales and higher margins. For the year, net income was up 25 percent to $24.4 million ($1.04 per share) while sales jumped 33 percent to $139 million.

Shares in True Religion were down 55 cents, or 3.3 percent, to $15.95 in afternoon trading Friday on the Nasdaq. The company's stock has been on the rise since it fell 25 percent, to $15.66 in November, in the wake of weak third quarter earnings.

True Religion has been on an expansion binge in recent months, opening high-end retail shops in Miami, New York and Chicago. The company is also expanding the brand in Europe.

For reprint and licensing requests for this article, CLICK HERE.