American Apparel Q1 net sales up 14%Friday, 11 May 2012
American Apparel’s net sales increased 14% in the first
quarter ended March 31, 2012. The company’s wholesale and online channels reported record sales for the quarter. It resulted due to good performance in sales from retail stores both domestic and international. The net loss per common share was $0.07.
Comparing the first quarter 2012 to the corresponding period last year, net sales increased 14% to $132.7 million on a 16% increase in comparable store sales in the retail business, a 17% increase in net sales in the wholesale business and a 5% decrease in the average number of stores. Gross margin for the first quarter of 2012 was 52.8% versus 54.8% for the corresponding period last year. The decrease in gross margin was primarily driven by lower production volume that resulted in lower absorption of fixed overhead costs, partially offset by lower yarn costs.
As a percent of revenue, operating expenses for the first quarter of 2012 decreased 590 basis points to 60.2% from 66.1% for the first quarter of 2011. The decrease was primarily due to a reduction in corporate overhead expenses and the fixed cost leverage as a result of increased sales. Other income for the first quarter of 2012 was $2.2 million versus an expense of $7.3 million in the comparable quarter last year. The change of $9.5 million was primarily due to a gain on extinguishment of debt, offset by increased interest expense due to a higher balance of outstanding debt.
The first quarter of 2012 net loss was $7.9 million, or $0.07 per common share, compared to net loss for the first quarter of 2011 of $20.7 million, or $0.28 per common share. Consolidated adjusted EBITDA loss narrowed to $2.1 million from a loss of $4.9 million in 2011's first quarter. Accordingly, the company reiterated with adjusted EBITDA guidance of $32 to $40 million for the full year 2012.
American Apparel based in downtown Los Angeles, California, as of March 31, 2012, operates online retail e-commerce website, 249 retail stores in 20 countries, including the United States, Canada, Mexico and Brazil. It also operates a leading wholesale business that supplies T-shirts and other casual wear to distributors and screen printers.