Earnings Briefing and Coverage - American Apparel

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Aug 25, 2014, 09:10 ET from Investor-Edge

LONDON, August 25, 2014 /PRNewswire/ --

Investor-Edge.com has issued free earnings briefing and coverage on American Apparel Incorporation (NYSE MKT: APP). The company featured in the headlines on Monday, August 18, 2014 after declaring its second quarter 2014 results. For Q2 2014, the company reported net sales of $162.40 million, compared with net sales of $162.24 million in the second quarter of 2013, while American Apparel Inc.'s gross profit declined to $82.39 million, from $83.87 million on Y-o-Y basis. Our free coverage report can be accessed at:


Earnings Overview 

For Q2 2014, American Apparel Inc. reported a GAAP net loss of $16.21 million or $0.09 per common share, compared with a GAAP net loss of $37.50 million or $0.34 per common share in the prior year quarter. Analysts from Bloomberg were expecting the company to report a net loss of $11.00 million or $0.06 per share. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged 85% to $14.56 million, from $7.88 million in the second quarter of 2013, primarily due to the increase in efficiency of the company's operations. The company's operating expenses decreased to $79.81 million from $85.78 million on Y-o-Y basis, largely due to the company's cost-cutting efforts. Further, American Apparel Inc.'s provision for income tax for the reported quarter stood at $0.50 million, compared with $0.62 million in the second quarter of 2013. The free research on APP can be downloaded as in PDF format at:


The company's gross margin declined to 50.7% from 51.7% on Y-o-Y basis, primarily due to a shift in the sales mix from retail and online sales to lower margin wholesale net sales. Further, the sales at the company's comparable stores and comparable online sales declined 6% and 3%, respectively, as compared to the second quarter of 2013. However, American Apparel Inc.'s wholesale net sales reported an increase of 9% as compared to the previous year quarter.  The company's other expense for Q2 2014 came at $18.3 million, down $16.7 million year-over-year, mainly due to a refinancing charge of $32.1 million in 2013, and the charge for the change in fair value of warrants of $8.2 million incurred in the second quarter of 2014 as compared to an unrealized gain of $5.5 million in the second quarter of 2013.

As of June 30, 2014, the company had $10.16 million in cash, compared with cash of $8.68 million, as on June 30, 2013. As of June 30, 2014, American Apparel Inc. had $30.6 million outstanding on its $50 million asset-backed revolving credit facility and $16.9 million of availability for additional borrowings under the credit facility. As of August 1, 2014, the company had $22.9 million available for borrowing. Sign up and read the free analyst's notes on APP at:


In its guidance for FY 2014, the Los Angeles, California-based apparel company expects adjusted EBITDA in the range of $40 million to $45 million.

Stock Performance 

On Tuesday, August 19, 2014, a day after the earnings release, shares in American Apparel Inc. surged 9.09% to end the day at $1.02. On the last close, Friday, August 22, 2014, shares of the company vacillated between $1.01 and $1.08 during the session, before closing the session 2.94% higher at $1.05. A total of 2.22 million shares were traded, much below its three months average volume of 5.40 million shares. Over the previous three trading sessions, shares in American Apparel Inc. have advanced 2.94%. However, the stock has fallen by 2.78% in the last one month and 14.63% from the beginning of 2014. Shares in American Apparel Inc. are trading above their 50-day and 200-day moving averages of $0.91 and $0.88, respectively. Further, the company's stock has a Relative Strength Index (RSI) of 60.48. Visit Investor-Edge and access the latest research on APP at:


Insider Trading 

In the last one month, American Apparel Inc. has not reported any share transactions by insiders to the U.S. Securities and Exchange Commission (SEC). Complimentary in-depth research on APP is available at:


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