US: American Apparel plans new stores as Q4 profit leaps 30%
Fashion retailer American Apparel Inc today (17 March) posted a 30% jump in fourth quarter profit, helped by higher sales and margins following its aggressive expansion into new markets, and says it plans to open up to 30 new stores in the year ahead.
The results come just five days after the company sold an 18% stake in its business to British private equity firm Lion Capital for $80m, which it will use to pay off some of its debt.
"Our company is better positioned than at any time in its history to succeed and deliver on the great potential of the American Apparel brand," said Dov Charney, chairman and chief executive officer.
For the three months to 31 December, net income rose to $3.9m, or $0.05 per share, up from $3.0m, or $0.06 per share in the same period a year earlier.
The Los Angeles based manufacturer and retailer of branded fashion basics said sales were up 31% to $145.6m from $111.2m last time.
Total retail sales at its 260 stores soared 52.7% to $98.0m from $64.2m, with comparable store sales at stores open at least 12 months rising 11%.
Wholesale sales (excluding online consumer sales) dropped 2.8% to $36.3m, but online consumer sales rose 17.6% to $11.4m.
Higher retail sales from expansion of the firm's US retail, Canada and International business segments helped lift gross margin to 55.4%, compared with 54.0% last time.
For its full year, profit at American Apparel slipped 9% to $14.1m or $0.20 per share, from $15.5m or $0.31 per share a year earlier.
Excluding merger related expenses, full-year profit would have been $22.9m or $0.33 per share, the company said.
Net sales for the year jumped 40.8% to $545.1m from $387.0m. Total retail sales increased 61.8% to $341.3m from $211.0m and same-store sales rose 22%.
Wholesale sales were up 9.1% to $164.4m, and online consumer sales increased 55% to $39.4m.
Last week the company said it plans to use some of its new funding to grow the brand domestically and internationally.
For 2009 it expects to open a total of 25 to 30 new stores.
It also predicts sales for the year will be in the range of $575m to $600m, with income from operations of $55m to $65m.
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