The Gory Details on True Religion Apparel's Double Fumble

Seth Jayson, The Motley Fool
Updated

True Religion Apparel (NAS: TRLG) reported earnings on Feb. 9. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), True Religion Apparel missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved and GAAP earnings per share dropped.

Gross margins grew, operating margins dropped, net margins contracted.

Revenue details
True Religion Apparel recorded revenue of $119.4 million. The seven analysts polled by S&P Capital IQ expected to see revenue of $128.0 million. GAAP sales were 7.7% higher than the prior-year quarter's $110.9 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.62. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.71 per share on the same basis. GAAP EPS of $0.57 for Q4 were 9.5% lower than the prior-year quarter's $0.63 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 64.1%, 120 basis points better than the prior-year quarter. Operating margin was 20.7%, 280 basis points worse than the prior-year quarter. Net margin was 12.1%, 210 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $108.6 million. On the bottom line, the average EPS estimate is $0.44.

Next year's average estimate for revenue is $494.3 million. The average EPS estimate is $2.37.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 476 members out of 544 rating the stock outperform, and 68 members rating it underperform. Among 166 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 147 give True Religion Apparel a green thumbs-up, and 19 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on True Religion Apparel is outperform, with an average price target of $36.83.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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