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American Apparel Q4 retail same-store sales up 40%

18 Mar '08
5 min read

Dov Charney, Chairman and Chief Executive Officer, stated: "I am very pleased by the growth in sales and profitability that American Apparel posted in 2007, our most successful year ever. So far, 2008 is shaping up to be a very strong year for American Apparel as well.

In the past few weeks, we opened our first store in Australia, in Melbourne, and our first store in Belgium, in Antwerp. With fresh capital invested in the business, and a growing pipeline of signed leases, we intend to develop American Apparel into a preeminent, global retail brand."

For the full year ended December 31, 2007, American Apparel reported consolidated net sales of $387.0 million. This was a 36% increase over sales of $285.0 million for the year ended December 31, 2006. American Apparel's retail sales for the year were $215.0 million, an increase of 60% over the $134.7 million for 2006.

At December 31, 2007, American Apparel operated 182 stores as compared to 147 stores at December 31, 2006. Same-store sales for stores open longer than 12 months increased 29% for the year.

Wholesale sales for the year ended December 31, 2007 were $172.0 million, a 15% increase over the $150.3 million for the year ended December 31, 2006.

Net income for the full year ended December 31, 2007 was $15.5 million, versus a loss of $1.5 million in 2006. Diluted earnings per share for 2007 was $0.31, versus a loss per share of $0.03 in 2006.

For the year, without the deferred tax benefit from the conversion from an S Corporation, pro forma income would have been $9.5 million, or $0.19 per diluted share.

Adjusted EBITDA equaled $58.6 million for the year ended December 31, 2007. This represents an 83% increase over Adjusted EBITDA of $31.9 million for the year ended December 31, 2006.

The non-cash and other adjustment totaled approximately $7.2 million for the year ended December 31, 2007 as compared to approximately $7.2 million for the year ended December 31, 2006.

The remaining outstanding warrants as of March 7, 2008 were redeemed at a price of The total cash proceeds to the Company of all warrants exercised since the close of the merger was approximately $66.8 million, and the total number of new common shares issued, including those issued through the cashless exercise option, was approximately 13.5 million.

For 2008, the company plans to open between 40-45 net new stores. The company stated that it expects consolidated net sales for the year between $470 to $485 million. The company expects net income for the year of between $24 to $27 million, and diluted EPS of between $0.32 to $0.36 per share.

The company expects EBITDA (unadjusted) for the year to be between $70 to $75 million. The company expects interest expense of approximately $15 million for the year, and depreciation and amortization of $15 million.

Based on this, the company expects a provision of income taxes between $16 to $18 million. These estimates are before a one-time non-cash stock compensation expense of approximately $30 million for the year, resulting from our previously announced employee stock grant.

American Apparel Inc

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