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True Religion Apparel, Inc.

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Don't bet against the power of jeans. True Religion Apparel, Inc. (TRLG) recently reported first quarter results and saw double digit same store sales growth. This Zacks #2 Rank (Buy) is a hot retailer with value credentials. It has a price-to-book ratio under 3.0.

True Religion makes premium men's and women's jeans and sportswear. The jeans sell, on average, between $100 and $400. It sells in its own retail and outlet stores as well as department stores and boutiques in 50 countries.

It has 109 company owned retail stores in the United States, 5 in the U.K., 4 in Germany, 4 in Canada, 4 in Japan and 1 in the Netherlands.

True Religion Beat By 14% in Q1

On May 1, True Religion reported first quarter results and surprised on the Zacks Consensus by 5 cents. Earnings per share were 41 cents compared to the consensus of 36 cents.

Sales jumped 13.9% to $106.8 million. The retail stores and Internet sales, which make up the U.S. Consumer Direct segment, saw sales rise 22.6% to $65.5 million.

Same store sales in the 90 stores open for at least 12 full months and e-commerce increased 13.3%. It opened one store and closed one store in the quarter.

The U.S. Wholesale segment, which is in the specialty stores and department stores, saw sales increase 2.8% to $21.4 million. It was the first year-over-year increase in net sales in this segment since the recession, in the fourth quarter of 2008.

Net sales also grew in the International segment by 3.6% compared to the year ago. The quarter was boosted by retail sales in the U.K. and Canada.

Plenty of Cash

The company's cash flow continued to be strong. It ended the first quarter with $204.2 million of cash and cash equivalents, up from $200.4 million as of Dec 31, 2011.

True Religion has no long-term borrowings. Its inventory balance as of Mar 31, 2012 was $57.6 million, up 23.6% from the year ago period mainly due to an expansion of the retail store count to 109 U.S. stores from 96 and 18 international stores from 8 a year ago.

First Dividend Ever

Are you a dividend lover in addition to a value investor? Now you can get both in True Religion.

The Board of Directors authorized its first quarterly dividend of 20 cents per share. It will be paid May 29 to shareholders of record as of May 15.

True Religion is also going to repurchase up to $30 million in stock.

Zacks Consensus Estimate for 2012 Rises

In the last 60 days, the 2012 Zacks Consensus Estimate has risen to $1.95 from $1.94.

This is earnings growth of 5.1% over last year.

True Religion Is A Value

Shares have taken a beating in 2012 but that has created a buying opportunity for value investors.

In addition to a value P/B ratio, the company also has a P/E of 14.8. While that is not the cheapest P/E out there, it is just under the 15x cut-off I use for value stocks.

True Religion has other solid fundamentals as well. It's 1-year return on equity (ROE) of 16.8% is above the average of the S&P 500 at 13.4%.

True Religion is cashing in on the demand for luxury products. Given the 2012 stock market rally, it is one of the few luxury retailers that is also a value stock.

This Week's Value Zacks Rank Buy Stocks

There's plenty of value in the energy sector. Helix Energy Solutions Group (HLX) is trading at just 9.4x forward estimates even though the shares are near 52-week highs. This Zacks #1 Rank (Strong Buy) is also a double threat, as, in addition to value, it is expected to see double digit earnings growth in 2012. Read the full article.

The specialty chemical companies are still optimistic about 2012. Rockwood Holdings, Inc. (ROC) recently reported first quarter results and blew by the Zacks Consensus by 19.6%. This Zacks #1 Rank (Strong Buy) is even cheaper than last year, as it now has a forward P/E of 12.2. Read the full article.

There was plenty of momentum for the specialty chemical companies in the first quarter. Cytec Industries Inc. (CYT) recently reported its sixth earnings surprise in a row. This Zacks #1 Rank (Strong Buy) continues to be a value stock, with a forward P/E of 13.6. Read the full article.

Cabela's, Inc. (CAB) is a hot specialty retailer. This Zacks #1 Rank (Strong Buy) just reported a record first quarter as gun sales remained strong. Yet it still has value, with a price-to-sales ratio of just 0.9. Read the full article.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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