American Apparel Inc., the Los Angeles-based vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel, announced preliminary sales for the month and quarter ended June 30, 2012. The company reported that for the month ended June 30, 2012, total net sales increased 16 percent to $52.1 million when compared to the month ended June 30, 2011. Between the same periods, comparable store sales on a preliminary basis increased an estimated 19 percent and wholesale net sales increased an estimated 8 percent. For the quarter ended June 30, 2012, total net sales increased an estimated 12 percent to $149.2 million, comparable store sales increased an estimated 16 percent and wholesale net sales increased an estimated 10 percent.
The following delineates the components of the increases for each of the months and the quarterly period ended June 30, 2012, when compared to the corresponding months and quarter of the prior year:
April May June* 2012 Q2*
Comparable Store Sales 6% 16% 19% 14%
Comparable Online Sales 50% 21% 18% 29%
Comparable Retail & Online 10% 17% 19% 16%
Wholesale Net Sales 3% 20% 8% 10%
*Preliminary, subject to adjustment
“We are very pleased to report strong sales performance across all distribution channels and geographies, and these results again exceeded our expectations,” said Dov Charney, chairman and CEO. “In the month of June 2012, more merchandise was sold to customers than for any June in our history. On a per store basis, annualized June 2012 in-store sales are trending only 8 percent less than the historic high set in 2008 and we think we can surpass that historic level within the next 12 to 18 months.”
The following table illustrates the progress American Apparel has made on this front:
Average Sales per Store on an Annualized Basis
June 2012 $1,600,000
June 2011 $1,360,000
June 2010 $1,180,000
June 2009 $1,390,000
June 2008 $1,730,000
In addition, the company reported that record volumes should allow it to better leverage store, factory and corporate overheads. “Although favorable cotton prices are tempered by the negative effects of a strengthening U.S. Dollar, we are managing our margins tightly and continue to generate a significant proportion of our sales through full-price selling,” American Apparel said in the statement. “As we continue to raise store productivity levels, we will begin to examine opening additional stores, and believe we could be in a position to open as many as 50 additional stores over the next three years.”
“We expect these positive sales trends will continue into the third quarter,” the statement continued.
American Apparel reiterated its 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the range of $32 million to $40 million. The company provided a chart illustrating five years of EBITDA rates.
Annual EBITDA
2012 $32 to $40 million (projected)
2011 $14 million
2010 $-9 million
2009 $56 million
2008 $71 million
“As we continue to drive higher cash flow and improved earnings performance, we believe we could be in a position to refinance our higher cost debt at substantially lower interest rates in late 2012 or early 2013,” the company stated.
For more information, visit www.americanapparel.net.
