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American Apparel racks up $15m in losses for Q2 Wednesday, 15th August 2012
American Apparel Korean store. Photo credit: American Apparel Inc.
Even a 12.5 per cent rise in sales for American Apparel couldn’t save the retailer from a net loss of USD 15.3 million for the period.
Net sales stood at USD 149.5 million for the three months to 30 June, up from USD 132.8 million. However, sales alone couldn’t help American Apparel from its widening losses, from USD 213,000 a year ago to USD 15.3 million, largely attributed to a decrease in the value of warrants held by the retailer that are tied to its stock price. WWD reported that the shift meant other expenses increased in the quarter to USD 13.4 million compared with other income of USD 5.5 million a year before.
“Though the first two quarters are historically our slowest, significant sales growth allowed us to more than double our EBITDA performance,” Dov Charney, chairman and chief executive officer of American Apparel told shareholders. “We saw over 30 percent of our stores with sales growth in excess of 20 percent and, as we continue to scale our operations and further implement store-level improvements, we believe we can raise the overall sales performance even further.”
American Apparel was able to grow its EBITDA to USD 7.6 million from USD 3.7 million in the year-ago quarter. The business raised its adjusted EBITDA guidance range for the year to USD 36 million to USD 44 million, an increase on its previous estimate of USD 32 million to USD 40 million. The new outlook assumes net sales of USD 604 million to USD 611 million and a gross profit margin of 53 per cent to 54 per cent.