American Apparel Reports Improved Second Quarter Financial Results
American Apparel Inc., Los Angeles, announced financial results for its second quarter ended June 30, 2011.
Comparing the 2011 second quarter to the corresponding period last year, the company reported that:
- Retail comparable store sales were flat for the second quarter with improving trends as comparable store sales increased 3 percent in June followed by a 4 percent increase in July. Net sales were flat between periods despite a 9 percent decrease in the number of stores in operation
- Internet sales increased 23 percent and wholesale net sales decreased 4 percent
- Gross margin was 54.5 percent vs. 51.6 percent
- Consolidated Adjusted EBITDA was $3.7 million vs. $0.1 million
- Loss per common share was $0.00 vs. $0.21
"We are pleased to see improving sales trends with a comparable store sales increase of 3 percent in June followed by a 4 percent increase in July. I believe that our stores look better than ever and our sales improvements were achieved at normal margins," said Dov Charney, chairman and CEO of American Apparel. "Consolidated Adjusted EBITDA production at $3.7 million for the quarter resulted primarily from improving manufacturing efficiency that more than offset higher yarn prices."
"During the month of July we received $8.3 million in new capital in connection with share purchase transactions consummated in April 2011. To date, we have received $22.5 million in gross proceeds for the sale of shares and exercise of purchase rights in connection with these transactions. This additional capital will allow us to take advantage of improving business conditions in order to build upon our recent successes. Together with our improved operating performance, this new capital makes us well positioned to strengthen our balance sheet," Charney added.
Comparable store sales were flat for the second quarter of 2011 versus a decline of 16 percent reported for the same quarter last year. During the 2011 second quarter, the company had an average of 254 stores in operation versus an average of 280 stores during the second quarter last year. Reported sales for the international segment benefited from a weaker U.S. dollar.
Gross margin for the second quarter of 2011 was 54.5 percent versus 51.6 percent for the corresponding period last year. Gross margin increased primarily due to improvements in manufacturing efficiency and logistics related expenses, foreign currency gains from a weaker U.S. dollar, and a shift in mix from wholesale to online sales. In addition, margins were favorably impacted as a result of reduced shrink from a June 2011 U.S. warehouse inventory which contributed to the overall margin improvement. These benefits were somewhat offset by higher yarn and fabric costs.
To read the entire report, visit American Apparel's website.