American Apparel's Q2: 42% Increase In Profits |
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| Tuesday, 19 August 2008 | |
 American Apparel Inc has reported a 42% increase in second-quarter profits, boosted by a 58% surge in sales at its retail business. This is the highest rise since the seller of hipster apparel began trading in March 2006 after forecasting 2008 profit that may exceed estimates on higher in-store
 and online sales.
The company surged 25 percent to $8.20 in American Stock Exchange composite trading for the steepest gain since Endeavor Acquisition Corp., the buyout firm that purchased American Apparel, listed its shares. Profit for the quarter was US$6.8 million or US$0.10 per share from US$4.8 million, or US$0.10 per share in the same period last year. Revenue was up by 39% to US$133 million from US$95.7 million last year. Sales in stores open at least one year, rose 23%. Retail-store and online revenue, which generate higher margins for the Los Angeles-based company, increased faster than wholesale sales, American Apparel said. Indicative of the company’s strong performance is that profitability was actually hit by the increase in production capacity, which saw the appointment of 1,400 new manufacturing employees. For fiscal 2008, American Apparel now expects earnings between US$0.32 and US$0.36 per share, excluding one-time items. American Apparel opened 20 new stores this year and plans a total of 50 to 55 openings in 2008, an increase from its prior estimate of 40 to 45. Dov Charney, Chairman and Chief Executive Officer, stated: "2008 continues to be a year of significant growth for American Apparel. We are pleased with our financial performance for the second quarter, and believe we are only still laying the groundwork for a very successful future. During the second quarter, American Apparel opened its first store in Spain and only its second store in Australia. We are very pleased with our performance in these new markets, which we believe speaks to the power and universal reach of our brand. We are excited to open our first stores in China and Brazil in the coming weeks, as well as all of the other stores that we have opening soon |
