True Religion´s stock on the move

Friday, 11 November 2011

The FashionUnited Top 100 Index was not alien on Thursday to the financial turmoil that is currently hitting major economies, closing lower by 17.23 to settle down at 1,305.36. Liz Claiborne, True Religion and Fossil owned the session in Wall Street while Europe suffered the sharp fall of regional markets.

Liz Claiborne Inc. on Thursday announced earnings for the third quarter of 2011: income from continuing operations was $2 million, or $0.02 per share, compared to a loss from continuing operations of ($42) million, or ($0.45) per share, for the third quarter of 2010.  Adjusted earnings per share from continuing operations for the third quarter was $0.05, compared to an adjusted loss per share from continuing operations of ($0.16) for the third quarter of 2010 (inclusive of gains of $0.11 per share in the third quarter of 2011 and losses of ($0.18) per share in the third quarter of 2010, primarily resulting from the impact of changes in foreign currency exchange rates on our eurobond). Net sales for the third quarter were $398 million, a decrease of $40 million, or 9.1%, from the comparable 2010 period. Excluding the impact of a $31 million decrease in net sales of brands that have been licensed or exited, a significant portion of which was associated with our Axcess brand and our Liz Claiborne family of brands as we transitioned to the licensing model under the arrangements with JCPenney in the US and Puerto Rico and with QVC, net sales decreased $9 million, or 1.9%.

The other stock in the spotlight on Thursday was True Religion Apparel, whose shares are active, trading 1.9% lower to $32.93. Over the past year, True Religion Apparel has traded in a range of $18.60 to $37.76 and is now at $32.93, 77% above that low. Over the last five market days, the 200-day moving average (MA) has gone up 0.8% while the 50-day MA has advanced 0.9%. According to FNN, True Religion Apparel has potential upside of 10.6% based on a current price of $32.93 and analysts' consensus price target of $36.43.

Finally, Fossil Inc. has a market cap of $5.81 billion; its shares were traded at around $92.03 with a P/E ratio of 22.3 and P/S ratio of 2.8. Fossil Inc. had an annual average earning growth of 16.3% over the past 10 years as per latest update from GuruFocus, which has just rated Fossil Inc. the business predictability rank of 3.5-star.

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