Stronger sales were insufficient to offset higher interest expense and accounting items as American Apparel Inc. more than doubled losses in the third quarter.
In the three months ended Sept. 30, the net loss escalated to $18.5 million, or 18 cents a diluted share, from a loss of $7 million, or 7 cents, in the year-ago quarter. Sales grew 15.1 percent, to $162.2 million from $140.9 million, as comparable-store sales were up 20 percent and comparable online sales up 21 percent.
Gross margin declined to 52.5 percent of sales from 53.2 percent in the 2011 quarter.
While interest expense was up 18.4 percent to $10.5 million from $8.8 million a year ago, the biggest toll on the bottom line came from a $13.3 million loss tied to the increase in the fair market value of outstanding warrants based on changes in the company’s stock price. Although the warrants will convert to equity when exercised, the loss on them comes against a gain of $6.1 million in last year’s quarter.
Stripping out interest and warrant liability along with other items, the company said consolidated adjusted earnings before interest, taxes, depreciation and amortization more than doubled to $13.3 million from $6.4 million a year ago.
“EBITDA performance for the 12 months ended Sept. 30, 2012, was $28 million or double that reported for the full year in 2011,” said Dov Charney, chairman and chief executive officer of the financially troubled vertical retailer. “As we improve store productivity and aggressively grow our online and wholesale businesses, we expect operating expense leverage will allow us to continue to significantly grow EBITDA performance.”
However, the company lowered its projections for full-year EBITDA to a range of $36 million to $40 million based on the impact of Hurricane Sandy and investments in advertising and store technologies. The earlier guidance was for EBITDA of $36 million to $44 million.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)