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Consumer Direct achieves same-store sales growth of 6.7%, True
04 Aug '10
5 min read
• The effective tax rate for the quarter was 37.1% as compared to 38.8% in the second quarter of 2009.
• Net income decreased 31.4% to $7.5 million, or $0.30 per diluted share based on weighted average shares outstanding of 24.7 million, as compared to $11.0 million, or $0.45 per diluted share based on weighted average shares outstanding of 24.1 million in the 2009 second quarter. Net income excluding separation costs would have been $10.4 million, or $0.42 per diluted share for the second quarter 2010.
Management Comments
"We continued the positive sales momentum of the beginning of the year into the second quarter. Our U.S. Consumer Direct segment achieved same-store sales growth of 6.7%, which improved operating margins for that business. And, our overall top line growth reflects the strength of our global lifestyle brand both domestically and internationally," stated Jeffrey Lubell, Chairman, Chief Executive Officer and Chief Merchant of True Religion Apparel, Inc. "During the quarter we continued to invest in the growth of our international businesses by opening full-price stores in Tokyo and London and establishing a joint venture in a key part of Europe, which was finalized last month. I am pleased with the progress of our international expansion efforts so far in 2010."
Year-to-date 2010 Financial Results
• Total net sales were $160.1 million, an increase of 17.9% as compared to $135.7 million in the six months ended June 30, 2009. Net sales for the Company's U.S. Consumer Direct segment increased 56.6% to $80.3 million, and same-store sales increased 11.9%. Net sales for the Company's U.S. Wholesale segment totaled $49.8 million, a 16.6% decrease as compared to the prior year period, and net sales for the Company's International segment increased 18.3% year-over-year to $27.5 million. Net sales included $2.4 million of licensing revenue as compared to $1.5 million in the same period last year.
• Operating income decreased 18.3% to $25.3 million as compared to $31.0 million in the prior year period, primarily because of the $4.5 million separation costs incurred in the second quarter of 2010. Operating income was 15.8% of net sales in the first six months of 2010 versus 22.8% in the prior year period. The 2010 year to date operating margin excluding the separation costs is 18.7%.
Store Openings
During the 2010 second quarter, True Religion Apparel opened five stores in the US, bringing its total store US count at June 30, 2010, to 81 stores, compared to 59 stores at June 30, 2009. The Company opened its first international full price retail stores in May 2010 in Tokyo, Japan and London, England. The Company anticipates opening 12 additional retail stores in 2010, including a full-price store in Toronto, Canada.
• Net income decreased 31.4% to $7.5 million, or $0.30 per diluted share based on weighted average shares outstanding of 24.7 million, as compared to $11.0 million, or $0.45 per diluted share based on weighted average shares outstanding of 24.1 million in the 2009 second quarter. Net income excluding separation costs would have been $10.4 million, or $0.42 per diluted share for the second quarter 2010.
Management Comments
"We continued the positive sales momentum of the beginning of the year into the second quarter. Our U.S. Consumer Direct segment achieved same-store sales growth of 6.7%, which improved operating margins for that business. And, our overall top line growth reflects the strength of our global lifestyle brand both domestically and internationally," stated Jeffrey Lubell, Chairman, Chief Executive Officer and Chief Merchant of True Religion Apparel, Inc. "During the quarter we continued to invest in the growth of our international businesses by opening full-price stores in Tokyo and London and establishing a joint venture in a key part of Europe, which was finalized last month. I am pleased with the progress of our international expansion efforts so far in 2010."
Year-to-date 2010 Financial Results
• Total net sales were $160.1 million, an increase of 17.9% as compared to $135.7 million in the six months ended June 30, 2009. Net sales for the Company's U.S. Consumer Direct segment increased 56.6% to $80.3 million, and same-store sales increased 11.9%. Net sales for the Company's U.S. Wholesale segment totaled $49.8 million, a 16.6% decrease as compared to the prior year period, and net sales for the Company's International segment increased 18.3% year-over-year to $27.5 million. Net sales included $2.4 million of licensing revenue as compared to $1.5 million in the same period last year.
• Operating income decreased 18.3% to $25.3 million as compared to $31.0 million in the prior year period, primarily because of the $4.5 million separation costs incurred in the second quarter of 2010. Operating income was 15.8% of net sales in the first six months of 2010 versus 22.8% in the prior year period. The 2010 year to date operating margin excluding the separation costs is 18.7%.
Store Openings
During the 2010 second quarter, True Religion Apparel opened five stores in the US, bringing its total store US count at June 30, 2010, to 81 stores, compared to 59 stores at June 30, 2009. The Company opened its first international full price retail stores in May 2010 in Tokyo, Japan and London, England. The Company anticipates opening 12 additional retail stores in 2010, including a full-price store in Toronto, Canada.
True Religion Apparel Inc
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