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True Religion Q2 operating income grows 83% to $15.4 mn
07 Aug '08
5 min read
Year-to-Date Financial Results:
• Net sales for the first half of 2008 were $117.6 million, an increase of 63.1% from $72.1 million in the prior year period. Net sales in the Company's U.S. wholesale segment increased 43.2% to $70.9 million from $49.5 million in the prior year period. The Company's international wholesale segment's net sales increased 43.8% to $16.7 million from $11.6 million in the first half of 2007. Net sales for the consumer direct segment, which includes the Company's branded retail stores and e-commerce site, increased 178.1% to $29.4 million from $10.6 million in the prior year period. Net sales for the first half of 2008 included $0.5 million of licensing revenues.
• Gross profit for the first half of 2008 was $67.4 million, or 57.3% of net sales, compared to $41.0 million, or 56.8% of net sales, in the second half of 2007. The overall improvement in gross margin reflects the ongoing segment net sales mix shift towards the Company's higher margin consumer direct business, partially offset by higher in-bound freight costs on certain imported denim fabric and an increase in sales to major department stores, which receive a volume price discount.
• SG&A expenses for the first half of 2008 increased 70.8% to $40.6 million from $23.8 million in the first half of 2007. SG&A expenses for the first half of 2008 included growth in consumer direct operating costs of $6.9 million and incremental pre-opening costs of $1.0 million for the expansion of the company's consumer direct business, $1.2 million in incremental marketing expense related to the Company's 2008 marketing campaign and $0.8 million in incremental professional fees primarily related to the restatement of the Company's previously released financial statements. The Company's SG&A expenses for the first half of 2007 included $2.4 million of severance and recruiting costs related to the replacements of two former executives.
• Operating income for the six months ended June 30, 2008 increased 55.7% to $26.7 million, or 22.7% of net sales, compared to $17.2 million, or 23.8% of net sales for the six months ended June 30, 2007.
• True Religion's effective tax rate for the first half of 2008 was 41.1% compared to 44.0% for the first half of 2007.
• Net income for the six months ended June 30, 2008 was $16.2 million, or $0.67 per diluted share based on weighted average shares outstanding of 24.1 million, compared to $10.1 million, or $0.43 per diluted share based on weighted average shares outstanding of 23.9 million in the six-month period ended June 30, 2007.
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• Net sales for the first half of 2008 were $117.6 million, an increase of 63.1% from $72.1 million in the prior year period. Net sales in the Company's U.S. wholesale segment increased 43.2% to $70.9 million from $49.5 million in the prior year period. The Company's international wholesale segment's net sales increased 43.8% to $16.7 million from $11.6 million in the first half of 2007. Net sales for the consumer direct segment, which includes the Company's branded retail stores and e-commerce site, increased 178.1% to $29.4 million from $10.6 million in the prior year period. Net sales for the first half of 2008 included $0.5 million of licensing revenues.
• Gross profit for the first half of 2008 was $67.4 million, or 57.3% of net sales, compared to $41.0 million, or 56.8% of net sales, in the second half of 2007. The overall improvement in gross margin reflects the ongoing segment net sales mix shift towards the Company's higher margin consumer direct business, partially offset by higher in-bound freight costs on certain imported denim fabric and an increase in sales to major department stores, which receive a volume price discount.
• SG&A expenses for the first half of 2008 increased 70.8% to $40.6 million from $23.8 million in the first half of 2007. SG&A expenses for the first half of 2008 included growth in consumer direct operating costs of $6.9 million and incremental pre-opening costs of $1.0 million for the expansion of the company's consumer direct business, $1.2 million in incremental marketing expense related to the Company's 2008 marketing campaign and $0.8 million in incremental professional fees primarily related to the restatement of the Company's previously released financial statements. The Company's SG&A expenses for the first half of 2007 included $2.4 million of severance and recruiting costs related to the replacements of two former executives.
• Operating income for the six months ended June 30, 2008 increased 55.7% to $26.7 million, or 22.7% of net sales, compared to $17.2 million, or 23.8% of net sales for the six months ended June 30, 2007.
• True Religion's effective tax rate for the first half of 2008 was 41.1% compared to 44.0% for the first half of 2007.
• Net income for the six months ended June 30, 2008 was $16.2 million, or $0.67 per diluted share based on weighted average shares outstanding of 24.1 million, compared to $10.1 million, or $0.43 per diluted share based on weighted average shares outstanding of 23.9 million in the six-month period ended June 30, 2007.
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True Religion Apparel Inc
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