NEW YORK — Strong sales from department store customers helped lift True Religion Apparel Inc. to double-digit earnings gains in the second quarter.
For the three months ended June 30, the Los Angeles-based premium denim manufacturer said Thursday that earnings rose 15.7 percent to $4.9 million, or 21 cents a diluted share, compared with $4.3 million, or 18 cents, in the same period a year ago.
Sales increased 39.7 percent to $30.7 million from $22 million, driven by healthy sales of premium denim items in the department store channel.
“It’s a much different company than when we were rolling out department stores last year,” Jeff Lubell, chief executive officer, said during the company’s conference call. “We truly are in growth mode.”
True Religion is focusing on expanding non-denim offerings from T-shirts to outerwear now, and jewelry and fragrance in the future. For the second quarter, non-denim only contributed 13 percent, but executives hope it will ultimately match denim’s performance.
The company plans to open a store here in SoHo in November, and in Miami’s South Beach in December. It also will continue opening both traditional shops and outlet stores. International expansion is a priority as well.
Lubell confirmed a WWD report that the denim firm has hired Goldman Sachs & Co. to find a buyer.
“It is somewhat interesting they would sign this in the midst of an infrastructure increase,” said Eric M. Beder, senior vice president of Brean Murray, Carret & Co., which follows True Religion. “They are trying to maximize shareholder value either by expanding or by selling — one way or another.”
Beder called department store channeling and men’s product sales highlights of an “outstanding quarter by every definition.”
Earnings gained despite a one-time arbitration settlement in which legal costs and interest totaled $1.9 million, or 5 cents per diluted share.
Charles Lesser, True Religion’s chief financial officer, said that the second quarter traditionally is weaker because warm weather hampers jeans sales. Year-to-date numbers are even stronger.
For the first half of the year, earnings increased 40.9 percent to $11.4 million, or 49 cents a share, from $8.1 million, or 35 cents a share. Sales grew 57.5 percent to $66.3 million from $42.1 million.