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Average men are beginning to understand the appeal of the skinny jean, something Pete Wentz, Kanye West, Zac Efron, and Justin Timberlake understood long ago. But clothing makers are still working out the kinks, fit-wise, in man skinnies. Now for the life of me, I can’t understand why. I would much rather wear a pair of fat jeans. If I go to the gym and squat 550 lbs for reps ( I mean a full squat, not those toe raises that the 25 yr old breadmen do in the gym today) my legs get big. The last thing I want to do is squeeze them into a pair of pants. Why should I, so I look like this:
If this guy, Zac Efron, was my quarterback, I wouldn’t block for him. He looks like someone who has no guy friends…just a lot of girl’s numbers on his cellphone.
Anyway, his jeans are too tight. But he has no plans to buy a looser style. Why? Because he thinks he looks cool. Cool rules, and especially when it comes to back to school. Trust me, kids don’t care if there is a recession. They want to wear cool clothes in school. I didn’t wear cool clothes in school. My gramma used to knit ski pants for me and I wore them 12 months a year until I dumped in them at Mrs. Henry’s piano lesson. Yea..I beat Mr. Henry at dominos and then Mrs. Henry made me an ice cream float with orange juice. It didn’t take long for me to convert that to fudge my duds. Then I didn’t wear those Armenian ski pants anymore. So I won’t wear skinny jeans.
Explanations abound for why men would want to wear jeans that look so uncomfortable and impractical. Some fashion observers say skinny jeans' tight hold on certain men stems in part from the wearers' desire to show off their gym-sculpted bodies. Then, too, denim brands, retailers and men's fashion magazines have relentlessly promoted skinny jeans. And pop stars like Justin Timberlake and Kanye West, by wearing skinny jeans, have given something resembling permission for style-conscious young men to wear them. Alright. Wait a minute. $$$MR. MARKET$$$ has a gym sculpted body but its so that when I drink 1000 beers and get in a fight, I can handle myself. I don’t want to look like Justin Timberlake and I certainly don’t want to fight like him. I won’t wear skinny jeans. One sometimes must diet and wiggle, tug and stretch to squeeze into a pair of tight jeans. That’s a fact. Nope. I won’t wear ‘em. But I will consider "four way stretch" man skinnies by True Religion. I must admit, I do like them better than those ridiculous baggy things that go down below your knees.
Anyway, today I bought stock in True Religion Jeans (TRLG) at a price of 23.42. I will sell it in 4-6 weeks at 27.00. Here’s why I like TRLG:
First of all, I love the chart:
This guy is coming out of hiding and on the move. Oh..another thing too…the recession is over. Sales of men's jeans that cost $50 and up are running greater than 10% growth increase. Jeans with tapered legs and narrow-peg ankles for men seemed destined to be a season's fashion when they first appeared in stores a few years ago but sales of men's skinny jeans are going strong, and mass brands Gap and Levi Strauss are getting in on the action.
Kids will get their skinny jeans from their parents. If they don’t, they will buy stolen ones, or steal some for themselves. The traveling denim salesman is a common sight in Atlanta, as about $1.5 million in premium denim and sportswear stolen from metro area stores over the past 30 months finds its way to consumers on the street. Police say hair salons, flea markets, car trunks and houses — most recently one in southeast Atlanta — are all venues for unloading the hot jeans. That’s "hot" as in stolen, good looking and extremely popular, which makes it harder for cash-strapped consumers to walk away and easy for street sellers to make a decent dollar. If people are willing to steal these things, that means it’s what people want to wear.
True Religion jeans sell for between $172 and $398. Yabba Dabba Doo. TRLG proves the present recession hasn’t completely snuffed out extravagance. The company sells $300 blue jeans that are faded and frayed just so, allowing the rich to look fashionably poor, while signaling with the giant label on the rear that they are, in fact, rich. Sales are expected to increase 11% this year. Shares fetch a rather working-class 11 times earnings. Now if my gramma saw me wearing ripped jeans, she would stay up all night sewing them and then when I wanted to wear them the next day everything would be wrecked. Actually premium denim isn’t a horrible rip off. Premium denim will last 20 times longer than regular denim and they will stay high quality. The quality lives up to the hype associated with the brand.
The blue in the blue jeans turns to green. Not unlike when Ric Flair cuts his forehead and red turns to green. True Religion has seen double-digit sales and earnings growth for seven straight quarters. Wooooo! This year, first-quarter profit jumped 10% to 32 cents a share, sailing past views. Sales rose 19% to $63.6 million.
The good thing about these jeans is that they can be worn anywhere. It's a big part of what's allowed them to continue to do well despite the slowdown. So even though you pay more for the jeans, you save on your wardrobe because you don’t have to buy another pair of pants. Of course, n addition to jeans, True Religion also makes non-denim items such as knit and woven sportswear, T-shirts and sweat shirts. And it has licensed products such as handbags and swimwear.
True Religion has also gotten a big boost from its own branded U.S. retail stores, launched in 2007. The stores showcase the breadth of its product line and help build the brand image. They also help True Religion reach more consumers with more products. Business at these stores has been hot. First-quarter sales at its consumer direct segment, which includes the branded stores and its e-commerce site, are up 96%.
True Religion's own stores have performed well in a tough retail environment because a lot of them are based in places where True Religion doesn't have much wholesale distribution. People want the jeans..they have to go to the store. Once in the store, they buy all kinds of other True Religion junk. True Religion has been ramping up store expansion. As of June 16, it had 57 stores, up from 42 at the end of 2008 and 15 at the close of 2007. It plans to have 67 stores by year-end. The branded stores have a gross margin of 80% and an operating margin above 35%. You get all this at the bargain basement PE of 12.66. That’s growth at a very very cheap price.
Why will all this make the stock go up. Blue turns to green.
First Quarter 2009 Financial Results
The Company is reiterating its guidance for the fiscal year ended December 31, 2009, as follows:
$$$MR. MARKET$$$ says revenues for 2009 will actually be $343 million, which will lead to earnings of $2.28/share. If you take the pedestrian PE of 12.66 and multiply it by $2.28/share, you get a share price of $28.86, which is higher than my target sell price. There I’m done.
What does management have to say?:
“We are pleased with our start to 2009, which marks a continuation of the positive brand momentum experienced in 2008,” said Jeffrey Lubell, Chairman, Chief Executive Officer and Chief Merchant of True Religion Apparel, Inc. “Despite the challenging economic environment, we remained committed to our strategy of continually delivering innovative jeans, sportswear and licensed products, reaching more consumers through our branded retail stores and wholesale partners, and building awareness of the True Religion brand world-wide. Our integrated approach to growth enabled us to increase first quarter revenues by 19% and net income by 10% over the prior year period.”
"Our strong performance in the 2008 fourth quarter and full year demonstrates the strength of our multi-segment distribution model," said Jeffrey Lubell, Chairman, Chief Executive Officer and Creative Director of True Religion Apparel, Inc. "We delivered year-over-year revenue growth of 56% to $270.0 million from $173.3 million and grew profitability in excess of 59% to $44.4 million from $27.8 million. We attribute our strong performance to our ability to successfully leverage our expanding product collection across distribution channels to satisfy the growing worldwide demand for True Religion apparel. We are especially pleased to deliver these results while continuing to invest strategically in our brand, personnel and infrastructure. We believe we are well positioned to extend our market share and brand leadership and capitalize on the many growth initiatives we see ahead."
Maybe rapper Jay-Z says it best: "You boys jeans too tight, you colors too bright, your voice too light." I think I’ll stick to my sweat pants and cargo shorts. In the meantime, with the money I make on True Religion stock, maybe I’ll go out and get me a new pair of fat jeans.
Did you like this write up? Forward it on to your friends, and encourage them to join our free site!
I am HUGE!
$$$MR. MARKET$$$
www.mrmarketishuge.com
If this guy, Zac Efron, was my quarterback, I wouldn’t block for him. He looks like someone who has no guy friends…just a lot of girl’s numbers on his cellphone.
Anyway, his jeans are too tight. But he has no plans to buy a looser style. Why? Because he thinks he looks cool. Cool rules, and especially when it comes to back to school. Trust me, kids don’t care if there is a recession. They want to wear cool clothes in school. I didn’t wear cool clothes in school. My gramma used to knit ski pants for me and I wore them 12 months a year until I dumped in them at Mrs. Henry’s piano lesson. Yea..I beat Mr. Henry at dominos and then Mrs. Henry made me an ice cream float with orange juice. It didn’t take long for me to convert that to fudge my duds. Then I didn’t wear those Armenian ski pants anymore. So I won’t wear skinny jeans.
Explanations abound for why men would want to wear jeans that look so uncomfortable and impractical. Some fashion observers say skinny jeans' tight hold on certain men stems in part from the wearers' desire to show off their gym-sculpted bodies. Then, too, denim brands, retailers and men's fashion magazines have relentlessly promoted skinny jeans. And pop stars like Justin Timberlake and Kanye West, by wearing skinny jeans, have given something resembling permission for style-conscious young men to wear them. Alright. Wait a minute. $$$MR. MARKET$$$ has a gym sculpted body but its so that when I drink 1000 beers and get in a fight, I can handle myself. I don’t want to look like Justin Timberlake and I certainly don’t want to fight like him. I won’t wear skinny jeans. One sometimes must diet and wiggle, tug and stretch to squeeze into a pair of tight jeans. That’s a fact. Nope. I won’t wear ‘em. But I will consider "four way stretch" man skinnies by True Religion. I must admit, I do like them better than those ridiculous baggy things that go down below your knees.
Anyway, today I bought stock in True Religion Jeans (TRLG) at a price of 23.42. I will sell it in 4-6 weeks at 27.00. Here’s why I like TRLG:
First of all, I love the chart:
This guy is coming out of hiding and on the move. Oh..another thing too…the recession is over. Sales of men's jeans that cost $50 and up are running greater than 10% growth increase. Jeans with tapered legs and narrow-peg ankles for men seemed destined to be a season's fashion when they first appeared in stores a few years ago but sales of men's skinny jeans are going strong, and mass brands Gap and Levi Strauss are getting in on the action.
Kids will get their skinny jeans from their parents. If they don’t, they will buy stolen ones, or steal some for themselves. The traveling denim salesman is a common sight in Atlanta, as about $1.5 million in premium denim and sportswear stolen from metro area stores over the past 30 months finds its way to consumers on the street. Police say hair salons, flea markets, car trunks and houses — most recently one in southeast Atlanta — are all venues for unloading the hot jeans. That’s "hot" as in stolen, good looking and extremely popular, which makes it harder for cash-strapped consumers to walk away and easy for street sellers to make a decent dollar. If people are willing to steal these things, that means it’s what people want to wear.
True Religion jeans sell for between $172 and $398. Yabba Dabba Doo. TRLG proves the present recession hasn’t completely snuffed out extravagance. The company sells $300 blue jeans that are faded and frayed just so, allowing the rich to look fashionably poor, while signaling with the giant label on the rear that they are, in fact, rich. Sales are expected to increase 11% this year. Shares fetch a rather working-class 11 times earnings. Now if my gramma saw me wearing ripped jeans, she would stay up all night sewing them and then when I wanted to wear them the next day everything would be wrecked. Actually premium denim isn’t a horrible rip off. Premium denim will last 20 times longer than regular denim and they will stay high quality. The quality lives up to the hype associated with the brand.
The blue in the blue jeans turns to green. Not unlike when Ric Flair cuts his forehead and red turns to green. True Religion has seen double-digit sales and earnings growth for seven straight quarters. Wooooo! This year, first-quarter profit jumped 10% to 32 cents a share, sailing past views. Sales rose 19% to $63.6 million.
The good thing about these jeans is that they can be worn anywhere. It's a big part of what's allowed them to continue to do well despite the slowdown. So even though you pay more for the jeans, you save on your wardrobe because you don’t have to buy another pair of pants. Of course, n addition to jeans, True Religion also makes non-denim items such as knit and woven sportswear, T-shirts and sweat shirts. And it has licensed products such as handbags and swimwear.
True Religion has also gotten a big boost from its own branded U.S. retail stores, launched in 2007. The stores showcase the breadth of its product line and help build the brand image. They also help True Religion reach more consumers with more products. Business at these stores has been hot. First-quarter sales at its consumer direct segment, which includes the branded stores and its e-commerce site, are up 96%.
True Religion's own stores have performed well in a tough retail environment because a lot of them are based in places where True Religion doesn't have much wholesale distribution. People want the jeans..they have to go to the store. Once in the store, they buy all kinds of other True Religion junk. True Religion has been ramping up store expansion. As of June 16, it had 57 stores, up from 42 at the end of 2008 and 15 at the close of 2007. It plans to have 67 stores by year-end. The branded stores have a gross margin of 80% and an operating margin above 35%. You get all this at the bargain basement PE of 12.66. That’s growth at a very very cheap price.
Why will all this make the stock go up. Blue turns to green.
First Quarter 2009 Financial Results
- Total net sales were $63.6 million, an increase of 19.1% from $53.4 million in the first quarter of 2008.
- Net sales for the Company’s consumer direct segment, which includes the Company’s branded retail stores and e-commerce site, increased 95.8% to $23.1 million from $11.8 million in the prior year period. The Company operated 49 branded stores as of March 31, 2009, compared to 18 as of March 31, 2008.
- Net sales for the Company’s international segment increased 26.0% to $11.2 million from $8.9 million in the prior year period.
- As of March 31, 2009, the Company had $76.5 million of cash and cash equivalents and no long-term borrowings.
The Company is reiterating its guidance for the fiscal year ended December 31, 2009, as follows:
- Net sales are expected to be in the range of $290 million to $297 million
- EPS is expected to be in the range of $1.73 to $1.81.
$$$MR. MARKET$$$ says revenues for 2009 will actually be $343 million, which will lead to earnings of $2.28/share. If you take the pedestrian PE of 12.66 and multiply it by $2.28/share, you get a share price of $28.86, which is higher than my target sell price. There I’m done.
What does management have to say?:
“We are pleased with our start to 2009, which marks a continuation of the positive brand momentum experienced in 2008,” said Jeffrey Lubell, Chairman, Chief Executive Officer and Chief Merchant of True Religion Apparel, Inc. “Despite the challenging economic environment, we remained committed to our strategy of continually delivering innovative jeans, sportswear and licensed products, reaching more consumers through our branded retail stores and wholesale partners, and building awareness of the True Religion brand world-wide. Our integrated approach to growth enabled us to increase first quarter revenues by 19% and net income by 10% over the prior year period.”
"Our strong performance in the 2008 fourth quarter and full year demonstrates the strength of our multi-segment distribution model," said Jeffrey Lubell, Chairman, Chief Executive Officer and Creative Director of True Religion Apparel, Inc. "We delivered year-over-year revenue growth of 56% to $270.0 million from $173.3 million and grew profitability in excess of 59% to $44.4 million from $27.8 million. We attribute our strong performance to our ability to successfully leverage our expanding product collection across distribution channels to satisfy the growing worldwide demand for True Religion apparel. We are especially pleased to deliver these results while continuing to invest strategically in our brand, personnel and infrastructure. We believe we are well positioned to extend our market share and brand leadership and capitalize on the many growth initiatives we see ahead."
Maybe rapper Jay-Z says it best: "You boys jeans too tight, you colors too bright, your voice too light." I think I’ll stick to my sweat pants and cargo shorts. In the meantime, with the money I make on True Religion stock, maybe I’ll go out and get me a new pair of fat jeans.
Did you like this write up? Forward it on to your friends, and encourage them to join our free site!
I am HUGE!
$$$MR. MARKET$$$
www.mrmarketishuge.com
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