April 29, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of clothier True Religion Apparel (Nasdaq: TRLG ) jumped as much as 19% today after the company released earnings.
So what: Revenues cruised past the $85.3 million analysts expected and hit $93.8 million in the quarter. But more importantly, that flowed to the bottom line -- where earnings per share rose to $0.36, $0.10 above estimates.
Now what: When you charge $300 for a pair of jeans, pressure on cost doesn’t have the same effect on the bottom line as it does for more value-oriented brands. And when sales rise 20% in one quarter, you have the recipe for a blowout quarter. High-end apparel appears to be in a healthy place right now and that puts True Religion in perfect position to take advantage, so I think shares will move higher from here.
Interested in more info on True Religion Apparel? Add it to your watchlist.