Market Overview

True Religion's Prayers are Answered


On an earnings call full of captivating revelations last night, True Religion Apparel (NASDAQ: TRLG) reported robust earnings, a share repurchase authorization and dividend announcement. No one expected the quarter's many surprises, with analysts raising price targets this morning and commenting on the heavenly future ahead for True Religion.

The call began with TRLG Chief Executive Officer Jeffrey Lubell stating that the company's goal for 2012 is to grow sales by 7% to 10%, an amount that may have seemed overly ambitious before the rest of the 1Q report was revealed. However, Lubell then stated that the brand had experienced 14% net sales growth in the first quarter alone, largely thanks in part to the U.S. consumer direct segment.

"Within this segment, we posted double-digit same store sales of 13%, and total net sales growth of 23%. This is a strong testament to the strength of the True Religion brand, and the loyalty of our customer. In our US consumer segment, I am particularly pleased with our overall business performances here, as we achieved our first year-over-year increase in sales since the fourth quarter of 2008," Lubell said.

In accordance with the commendable news, research firms upped their estimates and price targets today. Brean Murray Carret & Co. raised PT from $32 to $37, while Benchmark increased it from $32 to $38.

On the flip side, one firm chose to not follow the crowd with reinstated faith and praise. Citi actually lowered its PT on TRLG from $37 to $29, with analysts stating that True Religion's international market needs some work after management guided 2Q down a bit due to the slowdown across seas.

Admittedly, Chief Financial Officer Pete Collins not only agreed that international softness will be a difficult factor to overcome in the next quarter, but said that even with U.S. sales hitting the mark, EPS will be approximately $0.35. However, confidence is key for the company, and the TRLG team believes the year will continue to be successful.

As the righteous retailer continues to enlighten investors with prophetic earnings, True Religion plans to move forward in opening 27 new stores, 14 of them being in the international segment. One step and at a time, TRLG is well on its way to being one of the very top premium fashion apparel distributor.

True Religion is currently trading at $29.64, up +0.37% YoY.

Posted-In: Analyst Color Earnings News Price Target Retail Sales Topics Management Analyst Ratings Best of Benzinga


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