Eat at Joe’s Jeans Inc (JOEZ), the Denim’s Delicious

Joe's Jeans Inc (NASDAQ:JOEZ)Luxury retail has been popular at this stage of the economic recovery, and we’ll find out a bit more when Joe’s Jeans Inc (NASDAQ:JOEZ) reports quarterly results after Monday’s market close.

Joe’s Jeans Inc (NASDAQ:JOEZ) is a trendy retailer of high-priced denim. It’s the stuff that celebrities wear. It’s the stuff that the affluent, who want to be celebrities, wear. The branded apparel starts at $158 for a pair of jeans, and the price points can get substantially higher after that.

Joe’s Jeans Inc (NASDAQ:JOEZ) is a small, but actively traded, company. Now that larger rival True Religion Apparel, Inc. (NASDAQ:TRLG) is going private, it’s going to be a more widely watched bellwether in the realm of luxury casual apparel.

Yes, True Religion Apparel, Inc. (NASDAQ:TRLG) is finally leaving us as a publicly traded company. The edgy marketer of upscale denim was exploring strategic alternatives last year, finally settling for an $835 million buyout at the hands of private equity firm TowerBrook Capital Partners.

Brean Capital actually downgraded True Religion Apparel, Inc. (NASDAQ:TRLG) earlier this week, but entirely based on expectations that the deal will close later this month. The stock’s at $31.80. Investors are getting cashed out at $32 in a matter of days. No one else is coming around with a sweeter offer. There’s no need to be bullish anymore.

However, there are reasons to be bullish when it comes to Joe’s Jeans Inc (NASDAQ:JOEZ). Analysts see revenue growing 15% this fiscal year ending in November, accelerating to a 16% clip next year. A surprising quarterly loss last time out dropped Wall Street targets for all of fiscal 2013 to $0.04 a share for Joe’s Jeans, but that deficit would’ve actually been a small profit if it wasn’t for a one-time charge. Those same pros see profitability bouncing back to $0.13 a share next year.

That may not seem like much, but keep in mind that, given the low share price, we’re talking about just 13 times forward earnings. That’s a pretty reasonable price for a company growing its top line in the mid teens.

Are there faster sprinters in luxury retail? Absolutely. Michael Kors Holdings Ltd (NYSE:KORS) has become the new darling in the luxury handbag space. Revenue soared 57% in its latest quarter, fueled primarily by a nearly 37% spike in same-store sales.

Yoga apparel retailer Lululemon Athletica inc. (NASDAQ:LULU) has had its hiccups lately. There was the embarrassing recall of its black Luon pants in March because the fabric’s sheerness made them see through. Investors were stunned to learn that its celebrated CEO stepped down last month. Despite the recall that kept a popular product line out of stock, lululemon came through with a 21% spurt in sales in its latest quarter.

However, you can’t buy Michael Kors Holdings Ltd (NYSE:KORS) or Lululemon Athletica inc. (NASDAQ:LULU) for 13 times next year’s earnings. They fetch forward multiples just north of 20.

Naturally, Joe’s Jeans Inc (NASDAQ:JOEZ)’ small size will trigger volatility. It also has active wholesale and retail businesses that don’t always perform in lockstep. However, with True Religion Apparel, Inc. (NASDAQ:TRLG) leaving the exchange, it’s time for Joe’s Jeans to prove itself worthy as a bellwether for pricey denim.

The article Eat at Joe’s, the Denim’s Delicious originally appeared on Fool.com and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!