Safe Harbor Statement

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2 Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Actual future results might differ materially from those projected in such statements due to a number of risks and uncertainties, including but not limited to, demand and competition for the Company s products, the ability to enter into new product license agreements, changes in consumer preferences or fashion trends, delays in anticipated store openings and changes in the Company s relationships with vendors and other resources. The forward-looking statements contained herein are also subject to other risks and uncertainties that are described in the Company s reports and registration statements with the Securities and Exchange Commission. 2

3 Getting True Religion An aspirational brand consisting of denim, knits, and denim related sportswear. Distinguished by a unique design point of view with amazing fits, exclusive fabrics, and unique styling details and vintage washes Passionate consumer base and loyal wholesale customer Culture of innovation, creativity, quality and achievement 3

4 Company Snapshot Revenues ($ millions) 4 $102.6 $27.7 $2.4 CAGR: 285% $ revenue: $139.0 million Q sales: $36.1 million Q1 segment net sales International Wholesale 19% Consumer Direct 11% Share price $16.21 (5/23/07) U.S. Wholesale 70% Market cap: $380 million (5/23/07) Cash and marketable securities: $48.6 million Cash per share $2.06 (13% of stock price) No debt Based in Los Angeles, CA

5 2007 Financial Guidance Total sales increase 20% to $167.0 million EPS $ $1.27 pre diluted share* *Excluding unusual items 5

6 Premium Denim is Here to Stay And True Religion is a Leader

7 Favorable Denim Industry Trends 7 A wardrobe staple for customers in all age groups and nearly all occasions; People want to wear jeans Premium denim sales (>$100) continue to be strong; True Religion consumer not as impacted by economic downturns Average number of pairs owned is increasing Industry drivers: (CIBC World Markets, Nov. 2006) Trend setting product Superior fit Innovation Market awareness Exclusivity and controlled distribution

8 Large Target Market Affluent, aspirational customer Hip, fashionable and brand conscious years is core customer base Average annual HH income >$100,000 8

9 True Religion is Here to Stay Consistently #1, #2 or #3 performer in our department store doors Continue to take market share from our competition Unique product line Loyal customer base Superior fit Great brand name Exclusivity & controlled distribution Enormous innovation remains to drive sales in 2007 and beyond No price resistance on innovation; no need to reduce price points 9

10 Demand by Tastemaker Celebrities Still High 10 Beyonce Amanda Bynes David Beckham

11 Spring 2007 Floyd Mayweather 11 Jessica Simpson You know who

12 May 2007 Paris Hilton Off to the Big House in Her True Religions

13 Continuing our Strategic Initiatives Added design talent Zihaad Wells (Levi s Europe) and Caius Olowu Expanded new and exciting denim and related sportswear for Fall 2007 & Spring 2008 Launched 3 product licenses; Signed handbag license Opened 4 new True Religion retail stores Signed 5 additional store leases Moved our VP of International to Europe Tapped new distributor for U.K. market Established task force for Japan New expanded corporate headquarters and warehouse Augmented executive team with new President, CFO, General Counsel, VP Real Estate Improved financial controls and reporting Expanded denim capacity to support $350 million in sales Enhanced ability to find and negotiate store leases 13

14 Women s: Continued Growth Opportunity $72.2 $91.3 $ Enhanced design team to create more compelling offering 14

15 Women s Growth Areas Fall 2007 and Spring 2008 updated classic styles with new: hardware, thread combinations, fabrics, washes, and pocket shapes More stretch denims Colored denim Sexy knit tops Innovative T s More shirting's Sweaters Skirts/crops/capri s/dresses/shorts 15

16 Men s: Substantial Growth Opportunity $42.0 $28.2 $ Business increased 23% in Q1 excluding Japan 16

17 Men s Growth Areas Continue to build market share with updated classic styles and new innovative trendsetting concepts for Fall 2007 and Spring 2008 Introduce Heritage Group & 50 s Group Screen printed T-shirts Fleece, cashmere, hoodies, sweatpants Woven shirts Sweaters Outerwear 17

18 Fall 2007 Product Development 50 s Group Heritage Group 18

19 Kids: A Growing Opportunity $5.8 $0.2 $

20 Global Licensing Opportunities 2007 Launches Footwear: Shoes, sneakers, boots, flip-flops Hats, scarves and gloves Outerwear: Leather, shearling, down, cotton twills, wool 2008 Launch Handbags Potential opportunities 20 Swimwear Hosiery Belts Underwear & Lingerie Loungewear Homewares/Bedding Sunglasses & Eyewear Fragrances Watches Jewelry/Gift Items Activewear

21 Nominated by Sportswear International Magazine as, Most impressive collection demonstrating emerging trends in footwear. 21

22 22 True Religion Footwear

23 A Growing Aspirational Global Brand With Multi-Channel Distribution U.S. Wholesale U.S. Consumer Direct Retail Platform International Wholesale International Consumer Direct Retail Platform 23

24 U.S. Wholesale Business

25 U.S. Wholesale Business Found in premier department stores and boutiques Department Stores 44% Atrium Politix Boutiques 56% 25

26 Product Segmentation U.S. Wholesale True Religion Retail Stores Men s 33% Kids 4% Women s 63% Kids 6% Women s 53% Men s 41% 26

27 Current U.S. Wholesale Outlook FORWARD ORDER BOOK UP >30% FOR Q VERSUS 2006 (measured at the end of April in both years) Fall product new and updated styles are selling-in strongly Sales per door on the rise Replenishment systems are in full force; SKUs on replenishment are expanding 27

28 U.S. Wholesale Growth Opportunities Further penetrate each door with expanded denim, knit tops and denim related sportswear products Selectively expand doors of men s and women s Expand kids products into more doors to grow average sales per door 28

29 Sales Per Door Department Stores Boutiques ($ in thousands) ($ in thousands) Plan Plan 29

30 U.S. Consumer Direct Retail and e-commerce

31 Retail Benefits and Opportunities Industry leading financial metrics: Sales per square foot $1,300-$2,000 Q1 07 Higher gross margin Q1 07 >75% Higher operating margin Q % four-wall ASP $200 AVG transaction $265 Provides greater control of the brand, product mix and distribution Showcases entire True Religion collection together 31

32 Retail Benefits and Opportunities Retail is incremental to wholesale As wholesale accounts learn how to properly present and merchandise the brand Retail improves brand awareness and image Retail provides a testing ground for new product; mitigates design risk 32

33 Strong Store Economic Model Initial Costs Build-out $650,000-$750,000 Inventory $150, months per-opening costs per store $150,000-$200,000 Financial Targets Gross margin 75% 4-wall operating margin 35% (45% in Q1 07) Average sales per sq. ft. $1,300-$2,000 Weighted avg. selling space 1,500 sq. ft. Profitability 3 mos. of operation Complete payback < 2 years of operation Return on invested capital 35+% 33

34 Growing U.S. Retail Opportunity Target store mix: 53% women's 41% means 6% kids Mens, 41% Kids, 6% Womens, 53% 50-60% denim 40-50% denim-related sportswear Denim- Related Sportswear, 45% Denim, 55% 34

35 Growing U.S. Retail Opportunity Premium locations: Freestanding or mall-based 2005: 1 store 2006: 4 stores 2007: ~14 stores 2008: approx. 30 stores 2009: approx. 50+ stores New VP of Real Estate, Marc Klein 35

36 Retail Store Timeline Summer Fall Manhattan Beach, CA Desert Hills Outlet, CA Los Angeles (Robertson), CA New York (SOHO), NY Miami (South Beach), FL Short Hills, NJ Chicago (Lincoln Park), IL Woodbury Common Outlet, NY Houston (Galleria), TX San Jose (Valley Fair), CA Atlanta (Lenox Sq.), GA Marin (Corte Madera), CA Dallas (North Park), TX Other to be announced 36

37 Coming to a location near you

38 Identified Potential Retail Locations Northern/Central CA 10 store opportunity NYC, LI, Westchester 7 store opportunity So. CA 10 store opportunity 38

39 International Wholesale Business

40 International Wholesale International distributors on every continent in 50+ countries worldwide Sell directly to international retailers in markets where we do not have distributors Top 5 countries: Japan, UK, Germany, Canada, Korea, represent approximately 80% of international wholesale sales ROW 19% Geographic Distribution by Sales Biffi Corsa Como 81% U.S. 40

41 Retooling Japan Almost done with due diligence Brand continues to be #1 Currently in the right wholesale doors Phase II (next two years) 6-7 free-standing True Religion stores Tokyo, Osaka, Fukuoka, etc shop-in-shop concessions Potential for $50 million business in a few years 41

42 Other International Market Actions U.K. Replaced former distributor with FOUR marketing; larger and more experienced distributor Looking to test vertical retail (2008) Renewed other distributor contracts or replaced distributors with lower discounts and higher sales targets 42

43 43 International Segment Growth Opportunities Under penetrated in all international markets Substantial growth potential from existing, new doors Looking to extend into new markets (Israel, Turkey, India, Russia, etc.) Establish partnerships with more substantial distributors to drive long-term growth Possible joint venture partnerships where appropriate Open True Religion retail stores, shop-in-shop, etc.

44 Financial Overview

45 Track Record of Revenue Growth ($ millions) $167.0 (as of 5/8/07) $139.0 $102.3 $27.7 Q1 $

46 Gross Margin Growth Gross margin was 56.3% Q1 07 Retail growing as a percent of total sales mix Distributor discounts are down Direct sales with no discount to international retailers is growing 46

47 Operating Income/Margin 33.2% 29.9% Operating Margin 24.8% $41.0 $34.0 Operating Income ($ millions) $

48 Focused on delivering bottom line results Strong operating margin Annual EPS Growth $1.24-$1.27 (as of 5/8/07) $1.04 CAGR: 84% $0.84 $0.20 Q1 $

49 Financial Highlights Income Statement ($ mil) (estimate) Total Sales $ $ $ U.S. Wholesale $ 57.5 $ 96.9 International Wholesale $ 44.6 $ 37.2 Consumer Direct $ 0.5 $ 5.0 Year over year growth rate 36% 20% Gross Profit $ 52.6 $ 73.6 Gross Margins 51% 53% SG&A $ 18.6 $ 32.7 Net Income $ 19.5 $ 24.4 Diluted earnings per share $ 0.84 $ 1.04 $ Year over year growth rate 24% 17% 49

50 2007 Q1 Financial Highlights (In millions) Balance Sheet 3/31 12/ Cash & Marketable Securities ($ mil) $ 48.6 $ 44.9 A/R $ 5.8 $ 6.3 Inventory $ 8.8 $ 9.4 A/P $ 10.1 $ 9.2 Debt $ 0.0 $ 0.0 Shareholders Equity $ 75.0 $ 67.5 Cash Per Share $ 2.06 $ 1.90 Annual Inventory Turns

51 Operating Leverage Restricted stock more than half expensed in Q1 07 Management team built Commissions reduced Distribution operation can handle larger volumes Domestic sourcing ensures fast inventory turns and can react quickly to changing trends Professional fees (SOX, Legal) dropping Restricted stock more than half expensed in Q1 07 Leverage expected to take hold in late 2007 and through

52 Concluding Comments Aspirational Brand Well Positioned for Growth Amazing Product Consumer demand for True Religion and premium denim higher than ever Significant enthusiasm for Fall 2007 product Initiative to expand denim and denim-related sportswear underway Licensing extending brands reach Gross Margins Gross margins >56% are here to stay Retail and licensing stimulating margin growth Operating Margins Expect to see significant leverage in late 2007 through 2008 as design and infrastructure investment are largely completed 52

53 Concluding Comments Aspirational Brand Well Positioned for Growth Pristine Wholesale Distribution Forward order book up >30% for Q3 07 vs. Q3 06 (as measured at the end of April for both periods) Retail Rollout Industry leading financial metrics in 8 stores currently open 75% gross margin, 45% four wall operating margin Q1 07 Targeting more than 14 stores by the end of 2007, 30 stores by YE 2008, 50 stores by YE 2009 International Opportunities Enormous room for growth: Japan; Europe (UK, Germany, Italy, France) Leverage distributors in new regions Built for Growth and Operational Excellence True Religion is poised for an exciting future as a worldwide full-line premium brand 53

54 The End