True Religion to Study ‘Strategic Alternatives’

Jeans maker True Religion Apparel Inc. said Thursday that it had hired financial advisors to help it consider “strategic alternatives” despite strong department store sales that drove second-quarter profit up 16%.

Shares of True Religion rose 49 cents, or 2.8%, to $18 in after-hours trading after slipping 13 cents to $17.51 in the regular session. Earnings were issued after the markets closed.

Los Angeles-based True Religion said it had hired Goldman Sachs to “assist in evaluating various strategic alternatives to increase shareholder value” -- Wall Street code for selling, merging or taking the company private.

Wedbush Morgan Securities Inc. analyst Jeff Mintz said a change at True Religion had been rumored since early this year. “Management has made it clear in the past that they’re not exceptionally happy running a public company,” said Mintz, who rates the stock “buy.” “I don’t think they’d be unhappy to go private.”

Chief Executive Jeffrey Lubell said in May that “it might be a great idea” to take the company private.

Executives did not return calls for comment Thursday.

True Religion posted net income of $4.9 million for the second quarter, or 21 cents a share, versus profit of $4.3 million, or 18 cents, a year ago. Revenue rose 40% to $30.7 million from $22 million; Wall Street had forecast sales of $27.3 million.

Executives said the company was expanding warehousing and distribution facilities, adding members to its management team, opening stores in New York and Miami, exploring licensing opportunities, and doing business with new distributors in China and Latin America.

True Religion affirmed 2006 guidance of earnings per share of $1.25 on $148 million to $150 million in sales. Analysts forecast earnings of $1.25 per share on $148.5 million in revenue.

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The Associated Press was used in compiling this report.