American Apparel Inc. surprised Wall Street with a fourth-quarter profit late Monday, and investors returned the favor with a double-digit spike in the company’s shares in after-hours trading.
The embattled Los Angeles-based vertical retailer also provided strong guidance for the new year and laid out longer-term goals, including the addition in the next three to five years of between 60 and 70 stores to its current fleet of 251 and a boost in e-commerce to 17 percent of its non-wholesale revenues from last year’s level of 12.4 percent, or $55 million.
In the quarter ended Dec. 31, net income came to $4.9 million, or 4 cents a diluted share, versus expectations of a loss of 2 cents. The year-ago loss was $11.2 million, or 11 cents. The company also reversed an operating loss of $2.4 million in last year’s fourth quarter with operating income of $6.9 million in the more recent period.
Sales grew 9.8 percent, to $173 million from $157.6 million, as comparable-store sales were up 7 percent in the quarter, while comparable online sales were up 42 percent. Gross margin expanded to 53.8 percent of sales from 53.2 percent in the year-ago period.
Dov Charney, chairman and chief executive officer, cited “solid growth and continuing momentum in all business segments and almost all major geographies.”
“As we look towards the longer term, we have set a goal to achieve, over the next three to five years, an EBITDA margin of 15 percent, or 200 basis points higher than our previous peak reached in 2008,” he continued.
For 2013 the company is looking for sales of between $652 million and $660 million, above the $647.5 million previously anticipated, on average, by analysts. Adjusted EBITDA is expected to grow to between $47 million and $54 million from the 2012 level of $36.6 million and the $14.5 million registered in 2011.
The strength of the quarterly numbers wasn’t sufficient to produce a profit for the full year, when the company’s net loss dropped to $37.3 million, or 35 cents a diluted share, from a loss of $39.3 million, or 42 cents, in 2011. Although boosted by an $11.6 million gain on extinguishment of debt, the results were dragged down by interest expense of $41.6 million, higher than the $33.2 million toll exacted in 2011. Adjusted EBITDA, stripping out interest and other financial items, more than doubled to $36.6 million, just above the $36 million that constituted the low point of the guidance provided in November.
Sales rose 12.8 percent to $617.3 million from $547.3 million, and that percentage gain was greater than the aggregate increase in cost of sales and operating expenses, which collectively rose 8 percent to $616.3 million.
Shares, up 1 cent in Monday’s New York Stock Exchange session, shot up after results were released just following the close of the markets, rising 19 cents, or 14.7 percent, to $1.48 in the first 60 minutes of after-hours trading.
Charney, who has faced questions about his personal behavior as ceo even as he’s battled to secure financing, often at high interest rates, commented, “We believe we have demonstrated performance that supports refinancing our debt at a lower cost and we are actively involved in evaluating possible financing alternatives.”
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)