Tussle doesn't shake faith of True Religion's investors.TRUE Religion Apparel Inc. found itself in a bind last week--one that was perhaps even tighter than the pricey Pricey Term used for an unrealistically low bid price or unrealistically high offer price. pricey Of, relating to, or being an unrealistically high offer. An offer to sell a security at $50 when the current market price is $47 is pricey. denim maker's suffocating suf·fo·cate v. suf·fo·cat·ed, suf·fo·cat·ing, suf·fo·cates v.tr. 1. To kill or destroy by preventing access of air or oxygen. 2. To impair the respiration of; asphyxiate. 3. skinny-leg jeans. Herb Greenberg Herb Greenberg, an American journalist, is a columnist for MarketWatch.com and a frequent guest contributor on various CNBC shows, including Fast Money and Jim Cramer's Mad Money. , a senior columnist for MarketWatch, called out the Los Angeles-based company for a bit of financial funny business. He accused True Religion of cooking the numbers by channel stuffing Channel Stuffing A deceptive business practice used by a company to inflate its sales and earnings figures by deliberately sending retailers along its distribution channel more products than they are able to sell to the public. , or piling up orders to its Japanese distributor, Jameric, at the end of quarters. The allegation The assertion, claim, declaration, or statement of a party to an action, setting out what he or she expects to prove. If the allegations in a plaintiff's complaint are insufficient to establish that the person's legal rights have been violated, the defendant can make a didn't pass shareholders' detection. Following Greenberg's article early last week, True Religion's stock price plunged 6 percent to land at $17.27 on April 18. Only a day before, shares had gone up almost 2 percent to $18.41 after Wedbush Morgan Securities analyst Jeff Mintz upgraded True Religion to "buy." To back his claim, Greenberg turned to third-quarter results: Sales to Jameric doubled to nearly $12 million from the prior quarter, and $5.5 million of that total came in the quarter's last two weeks. "For the past year, sales to the distributor tended to soar in the last two weeks of each quarter, but nothing like the third and fourth quarters," he wrote. He also pointed out that Jameric post dates its check by 14 days for goods sent by True Religion to Japan, indicating the company was receiving more goods at once than it could afford. The checks "reflected the amount shipped two weeks before the quarter's close," Greenberg declared. True Religion disputed the claims in a subsequent column. Chief Financial Officer Charles Lesser told Greenberg there was no channel stuffing "whatsoever," adding the sales were normal orders that Jameric didn't have any problem paying for. Lesser has a supporter in Mintz who stood by his earlier upgrade. In a research note, the analyst said Greenberg's channel stuffing insinuation INSINUATION, civil law. The transcription of an act on the public registers, like our recording of deeds. It was not necessary in any other alienation, but that appropriated to the purpose of donation. Inst. 2, 7, 2; Poth. Traite des Donations, entre vifs, sect. 2, art. 3, Sec. is "unjustified when all of the evidence ... is considered" and that Japanese consumers "embrace the company's unique style." After the tussle, shareholders seem to have come down on the side of Lesser and Mintz. After a short stint under $18, True Religion shares rebounded to above that mark late last week. Staff reporter Rachel Brown Rachel Brown (born July 2 1980) is an English footballer, currently playing as goalkeeper for Everton Ladies and England Women. After a long spell out with injury, Brown returned to the England team against Sweden in the last group game of Women’s Euro 2005. can be reached at (323) 549-5225, ext. 224, or at rbrown@labusinessjournal.com. |
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