NEW YORK (
)-- No matter how bad the economy gets it seems shoppers love their denim, and not just the cheap brands.
, which sells jeans for as much as $300 a pop, is spiking after it topped Wall Street's fourth-quarter forecast and announced plans to open its first stores overseas.
Shares of True Religion are climbing 15.3% to $23.95 in morning trading.
During the quarter, the premium denim retailer posted earnings of $14.6 million, or 59 cents a share, from $12.7 million, or 53 cents a share, a year ago. Analysts expected True Religion to earn 55 cents a share.
Revenue rose 27% to $92.8 million, while sales from the direct-to-consumer segment nearly doubled to $45.1 million. International sales grew about 24% to $14.6 million.
Looking ahead, though, True Religion forecasts full-year earnings in the range of $2 to $2.10 a share, which falls short of analysts' prediction of $2.13 a share. The company said it will increase spending on its international expansion, which may cut into profit.
In 2010, True Religion plans to open stores in Toronto, London and Tokyo, as well as 27 stores in the U.S.
This increase in spending is expected to result in flat earnings for the first three quarter, but will boost its fourth-quarter profit, the company said.
True Religion also plans to pare back its sales to off-price retailers by about $10 million in the U.S., focusing more on direct sales.
"True Religion is taking the correct steps to build the management infrastructure for a true lifestyle brand and further reduce its dependence on the off-price channel, both necessary actions to create a more compelling business model with the ability to register premium and consistent returns," Brean Murray analyst Eric Beder wrote in a note.
Beder says True Religion is one of the most compelling stocks in the sector with a buy rating.
-- Reported by Jeanine Poggi in New York.
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