American Apparel Reports Fourth Quarter and Full Year 2008 Financial Results

Los Angeles-based American Apparel, Inc. announced its financial results for the fourth quarter of 2008 and for the year ending December 31, 2008.

American Apparel reported net sales for the quarter ending December 31, 2008 of $145.6 million, a 31.0 percent increase over sales of $111.2 million for the quarter ending December 31, 2007. Total retail sales increased 52.7 percent to $98.0 million for the fourth quarter of 2008, as compared to $64.2 million for the same period in 2007, with comparable store sales for stores open at least 12 months rising 11 percent. American Apparel ended the quarter with 260 stores, having added 32 net new stores in the period. Total wholesale sales, excluding online consumer sales, were $36.3 million for the 2008 fourth quarter as compared to $37.3 million for the 2007 fourth quarter, a decrease of 2.8 percent. Online consumer sales increased 17.6 percent to $11.4 million in the fourth quarter of 2008, versus $9.7 million for the fourth quarter of 2007.

Gross margin for the fourth quarter of 2008 was 55.4 percent versus 54 percent for the prior year fourth quarter. Gross margin was favorably impacted by the growth in retail sales from expansion of the U.S. retail, Canada and international business segments, which generate a higher gross margin than the company's U.S. Wholesale business segment.

Operating expenses for the fourth quarter of 2008 decreased to 49.1 percent of net sales, versus 53.4 percent for the fourth quarter of 2007. Pre-opening expenses for retail stores were $3.6 million in the fourth quarter of 2008, versus $1.6 million in the prior year's fourth quarter.

Operating income for the fourth quarter of 2008 was $9.2 million, versus $0.6 million in the prior year's fourth quarter. Operating margin for the fourth quarter of 2008 was 6.3 percent, versus 0.6 percent in the fourth quarter 2007.