True Religion Apparel Inc announced financial results for the first quarter ended March 31, 2007. Net sales for the 2007 first quarter were $36.1 million, up from $35.6 million in the 2006 first quarter.
True Religion's consumer direct business, which includes e-commerce and its growing branded retail rollout, increased significantly to $4.1 million versus $677,000 in the first quarter of 2006. The company's U.S. wholesale sales in the 2007 first quarter were $25.1 million versus $25.6 million in the comparable period last year.
The slight decrease primarily reflects a significant expansion of retail doors in the 2006 first quarter that necessitated both initial build-up of merchandise along with replenishment for sell-through. In the most recent quarter, the company's sales were primarily for replenishment of retail sell-through. The international wholesale business was $6.9 million in the 2007 first quarter versus $9.3 million in the comparable period in 2006 primarily reflecting anticipated lower sales in Japan.
Gross profit in the 2007 first quarter increased to $20.4 million from $18.8 million in the first quarter of 2006, underscoring stronger sales in the consumer direct segment. First quarter 2007 gross margin grew to 56.3% compared with 52.7%, in the same period last year.
"We are off to a strong start for the year," said Jeffrey Lubell, chairman and chief executive officer of True Religion Apparel. "Our business is on plan, and we believe we have made the right investments over the past six months to further secure our foothold as a denim-inspired icon brand. Our retail business is expanding and providing very favorable financial metrics, and most importantly, our new product continues to resonate strongly with our customers and consumers. Our outlook for the year is very positive and should be marked with increasingly favorable results as 2007 unfolds."
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