True Religion falls short for second consecutive quarter.It was a mixed, week for True Religion Apparel Inc. The premium denim manufacturer trumpeted plans to diversify beyond the tight-legged $225 jeans it's best known for and expand into a trendy and high profile Atlanta shopping district. But the company's stock dove stock dove n. A common Old World bird (Columba oenas) having grayish plumage. [Probably from its living in hollow tree trunks.] 22 percent after it reported third quarter-earnings of $8.2 million, or 35 cents a share. It marked the second consecutive quarter to miss expectations, this time 9 cents short of the 44 cents analysts had expected. The company cited declining international sales. Eric Tracy, an analyst with BB&T Capital Markets, noted that asking prices for high-end denim have dropped this year. With more designers and more products in the market, the jeans are now commoditized, he said. "Our thesis is that as the premium denim cycle begins to wane, they need to diversify," Tracy said. "I think they're attempting to do that, but I think the retail acceptance to date has been tepid tep·id adj. 1. Moderately warm; lukewarm. 2. Lacking in emotional warmth or enthusiasm; halfhearted: "the tepid conservatism of the fifties" Irving Howe. ." The company will license lines of headwear head·wear n. A hat or other covering for the head. , footwear, scarves scarves n. A plural of scarf1. scarves Noun a plural of scarf1 and gloves to be designed by Bourbon Bourbon (b  rbôN`), European royal family, originally of France; a cadet branch of the Capetian dynasty. , Mo.-based Paramount Apparel
International Inc. and GMI GMI Governance Metrics International (New York, New York)GMI Giant Magneto-Impedance GMI Global MSF Interoperability GMI General Motors Institute GMI General Mills, Inc. Corp. The lines will bow next spring and fall. Italian-based GMI is the current licensee for Levi's footwear. Paramount makes caps for Nike and Timberland. "We are extremely excited about these new ventures and are confident that both companies will serve as ideal partners," said True Religion President Michael Buckley, who noted that the combined minimum guarantees on the two licenses would contribute more than $9 million to True Religion's operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. over the life of the agreements. Tracy was more skeptical. "It's very early to tell how the footwear and headwear licensing is going to play out," lie said, noting the delicate balance between increased revenue and diluting the company brand. The company also plans to open a store in the trendy Buckhead neighborhood in Atlanta next fall. True Religion will open three stores this year, including one on L.A.'s Robertson Boulevard Robertson Boulevard is a street in Los Angeles. The northern part of the street in West Hollywood is a trendy tree-lined shopping district. Robertson is best known as a recent celebrity hangout. this month. The Buckhead store makes two slated to open in 2007. Tracy noted that these stores are a good place to show off the company's non-denim product and attract department store interest. But he doesn't expect store revenue to affect True Religion's bottom-line until the second half of 2007. BY EMILY BRYSON YORK Staff Reporter |
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