True Religion Q4 profit cut despite strong sales

True Religion

True Religion posted a small reduction in fourth quarter profit, but registered strong sales in its core US and developing overseas businesses.

The company’s US consumer direct segment, comprising its retail and online units, recorded an 11.8% increase in revenue to $86.4 million, with like-for-like sales edging up 1.5%.

US wholesale revenues rose 14.1% to $25.5 million, driven by growth in the specialty store and off-price channels.

International revenues increased 27.8% to $24.2 million, thanks mainly to a near doubling of the company’s store count over the last year, from 16 to 30.

Meanwhile, gross margin was up 20 basis points to 64.3%, with a strong contribution from the US wholesale and consumer direct segments.

“As we start 2013, our plan is to enhance our men’s merchandise offering with sportswear innovation and re-establish the True Religion Brand Jeans women’s collection with updated, well-edited core basic denim bottoms and fashion-forward concepts,” said Jeffrey Lubell, chairman, CEO and chief merchant at True Religion.

The company said there was as yet no update on the investigations of a special committee of non-executive directors, appointed last October to evaluate “potential strategic alternatives” for the company, adding that the review was continuing.

For the full year ahead, True Religion expects to post net sales of $509-513 million, and diluted earnings per share of $1.89-1.95.

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