Los Angeles—American Apparel reported Wednesday that its first quarter loss widened despite a net sales increase, but its report remained in line with what Wall Street expected.
For the quarter ended March 31, the apparel and accessories specialty store posted an adjusted loss of $22.9 million, or 21 cents a share, compared to $18.8 million or 18 cents a share
Net revenue increased 4.1% to $138.10 million. Comparable store sales increased 8% and a 1% increase in net sales in its wholesale business.
That was closely in line with what analysts’ average estimate expected: a loss of 21 cents a share on sales of $138.72 million.
John Luttrell, chief financial officer, noted that first quarter “historically is the slowest quarter of the year, retail and online sales growth and the related leveraging of fixed costs helped us reduce our loss.” He added that the company reiterated its full year forecast for earnings of $47 million to $54 million.
“We expect key initiatives in the areas of merchandise planning, supply chain, and inventory control to drive further sales and expense improvements for the balance of the year,” Luttrell said.
Gross profit for the quarter was $72.9 million, a 4% increase from $70.1 million in first quarter 2012. Gross margin remained unchanged at 52.8% for the first quarters in 2013, as higher margins an improved sales mix were offset by higher freight costs.
“Although we are pleased with our first quarter performance, we will not be satisfied until we exceed prior productivity levels in our stores, significantly increase our online sales penetration levels, and drive additional volume through our wholesale channel,” said Dov Charney, chairman/ceo.
Noting the investments the company has made over the past two years. Charney added: “We have significantly improved our store presentation, responsibly added stores when it was appropriate to do so, improved technology in all three channels, increased inventory productivity and substantially improved the effectiveness of our supply chain operation.”
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