True Religion Weaves a Fabulous Q3

  • Posted by
  • on November 1st, 2011

The denim extraordinaire beats the Street as sales surge; will boost Chinese presence.

The Loom of Profits


With a lucky #7 ranking in the just released November BeanScreen, True Religion ($TRLG) reported Q3 earnings after the bell today that were quite impressive in our view. Beating EPS estimates by about 3 cents, the high-end jean maker saw strong results from its retail stores and online business. Same stores sales open at least a year rose 10.2%.

Here are some other Q3 highlights:

  • Revenue +16.8% to $108.4 mil
  • Retail store + online biz revs +33.5% to $61.8 mil
  • International revs +30.2% to $23.5 mil
  • U.S. wholesale revs -18% to $22 mil
  • Adj. net income +9.3% to $12.9 mil
  • Gross margins increased to 64.8%
  • SG&A expenses +28.3% to $50.3 mil
  • Cash + equivalents of $182.2 mil and no debt
  • To open 5 more U.S. retail stores in 2011

TRLG also announced that “it granted the Envols International Trading Co exclusive distributorship in China and non-exclusive distributorship in Hong Kong through an agreement that extends to December 2016. Envols, known for expanding the wholesale and retail presence of the Giorgio Armani brand in China, will fund and operate True Religion Brand Jeans retail stores, shop-in-shops and other premium retail concepts in the region.”


2 year chart (Y! Finance)


We’ve bought and sold shares in TRLG a few times over the last couple years, but have kept a strong core position at a cost basis of about $19.50. After this latest earnings report, it apears that TRLG’s fundamentals continue to be solid and healthy.

The second of our niche apparel faves to report this month will be The Buckle ($BKE) on 11/17. We’re expecting a strong report from them as well.


sources:  True Religion profit up in 3Q to beat Yahoo! Finance (AP)

True Religion Q3 beats; to boost China presence – Reuters

True Religion Apparel Announces Third Quarter 2011 Financial Results – Y! Finance

disclosure:  we currently own shares in TRLG and BKE




The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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