UPDATE: Citigroup Downgrades True Religion Apparel to Neutral

Citigroup lowers its rating on True Religion Apparel

to Neutral from Buy and lowers its price target by $5 to $37 on lower off-price sales in Korea and higher-than-expected markdowns. Citigroup comments, "TRLG reported 4Q11 EPS well below expectations due primarily to unexpectedly lower off-price sales in Korea, as well as higher than expected markdowns in the outlet channel. As a result, EBIT margins for int'l bounced back to the mid-teens range. We were expecting int'l to drive the next leg of growth for TRLG as we thought management had completed its int'l investment in 2Q11 and margins should have normalized to ~20% going forward. However, it now appears the business is still in the investment stage that will likely weigh on EPS over the next year." TRLG closed at $36.74 a share on Thursday.