UPDATE: Benchmark Downgrades True Religion Apparel to Hold

Benchmark lowers its rating on True Religion Apparel

to Hold from Buy and lowers its price target to $38 from $42 as Q4 falls short. BEnchmark notes, "Operating margin continues to contract as spending outpaces revenue growth. We do not believe True Religion has a revenue problem; we believe it has a spending problem. True Religion has demand for its products and has intentionally held back revenues to protect the brand. Last year, it greatly reduced revenue from the US off price channel. In 2012, it is cutting back on sales to Korea and some boutiques. While we believe it is right to defend the brand, we rarely see the company cut back on spending." TRLG closed at $36.80 a share on Thursday.