Shares in True Religion Apparel Inc. gained more than 8 percent Wednesday after the denim company reported a double-digit drop in profit.

True Religion reported first quarter net income of $4.2 million (18 cents per share), a 35 percent drop from $6.5 million (28 cents), missing Wall Streets projections of 26 cents per share, according to a poll conducted by Thomson Financial.

Sales for the Los Angeles-based denim company rose 1.4 percent to $36 million, also below analysts' expectation of $40 million.

True Religion, which has been dogged lately by the exit of company co-founder and head designer Kymberly Lubell.

The company also said that expenses jumped more than 67 percent during the quarter to $14 million.

Despite the bad news, shares in True Religion were up $1.28, or 8.1 percent, to $16.93 in afternoon trading on the Nasdaq.

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