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Friday, Sep 29, 2023

Disappointing Quarter for True Religion

Shares of True Religion Apparel Inc. fell in after-market trading Wednesday after the premium denim maker said weaker U.S. wholesale sales reduced third quarter profit.

Following the markets closure, the Vernon apparel maker and retailer reported net income of $11.8 million (48 cents a share), compared with $14.1 million (58 cents) a year earlier. Revenue rose 12.5 percent to $92.8 million.

Analysts surveyed by Thomson Reuters on average were expecting per-share profit of 58 cents on revenue of $94.1 million.

The company said U.S. wholesale revenue fell 15.6 percent after a strategic decision to sell less excess inventory through discount retailers and outlet stores. The company also cited weakness in women’s department store sales.

“Third quarter results were a reflection of the changing mix of our business model,” said Chief Executive Jeffrey Lubell in a statement.

Gross margins fell from 64.7 percent to 62.1 percent, partly on lower initial markup on its women’s jeans due to competitive pricing. Conversely, the company’s growing chain of boutiques saw a 9 increase in same-store sales.

True Religion said it now expects full-year profit of $1.73 to $1.78 a share, lower than the Wall Street consensus of $2.06.

Shares closed up 24 cents, or 1 percent to $20.13 on the Nasdaq, but fell 7.5 percent in after-market trading.

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