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American Apparel blames market conditions for below par Q3
30
Nov '13
American Apparel, Inc., a vertically integrated manufacturer, distributor and retailer, known for its unique business model which gave it a certain amount of flexibility and unmatched turnaround times, has off late been struggling with out-of-stock items and high costs; the effects of which were visible in the disappointing earnings for the period ended September 30.

The Company reported a net loss for the third quarter of 2013 of USD 1.5 million, or USD 0.01 per common share, compared to Q3 net loss of 2012 of USD 19.0 million, or USD 0.18 per common share.

Excluding the non-cash and non-operating items from both periods, the net loss for the third quarter 2013 comes at USD 14.4 million, or USD 0.13 per share, compared to USD 5.7 million, or USD 0.05 per share, in the third quarter 2012.

For the three months ended September 30, 2013, net sales increased 1 per cent to USD 164.5 million on a 2 per cent increase in comparable store sales and a 2 per cent increase in wholesale net sales.

Adjusted EBITDA in the third quarter of 2013 decreased to USD 3.8 million from USD 13.3 million in the third quarter of 2012.

Commenting on earnings, Dov Charney, Chairman and CEO of American Apparel, Inc. said, “No question we had a rough 3rd quarter, although I think it is important to emphasize that most of the challenges we have faced were primarily technically oriented.”

The major reasons listed for the forgettable earnings were transition costs related to new distribution center, delayed product deliveries that led to items being out-of-stock in stores and a general slowdown in the sector in the USA.

However, Charney is confident in the American Apparel’s growth potential and is positive on the strength of its brand to succeed effortlessly in the market.

Fibre2fashion News Desk - India

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