American Apparel Reports Q3 Financials
1% Increase Over Same Period Last Year
Top 40 supplier American Apparel (asi/35297) announced last week that it recorded sales of $164.5 million in the three months ended September 30, a 1% increase over the same time period last year. The apparel supplier also announced that it increased its overall sales by 5% in the first nine months of 2013, including a 6% rise in wholesale sales (of which the company’s ad specialty sales are a part). However, the company sounded a negative tone in its public filing last week after revealing that its adjusted EBITDA fell from $13.3 million in the third quarter of 2012 to $3.8 million in Q3 of this year.
"Our lower EBITDA performance was substantially impacted by events surrounding the transition to and opening of our new distribution center,” said John Luttrell, chief financial officer. “However, we believe that these issues are now substantially behind us, and although there will be some remaining transition costs in the fourth quarter of 2013, we do not anticipate that these transition and start-up costs will negatively affect our financial performance in 2014.”
Dov Charney, CEO of American Apparel, also reflected on the financial impact that the opening of a new distribution center had on the company, but reported that its overall sales outlook – including specifically in the promotional market – remains positive. “No question we had a rough third quarter, although I think it is important to emphasize that most of the challenges we have faced were primarily technically oriented and we believe these challenges are substantially behind us,” Charney said. “I believe American Apparel is a company that can grow significantly. There is a resurgence of interest in Made in USA clothing, especially within the wholesale ad-specialty industry. Private label orders are also up significantly and we anticipate a lot of growth in that area. We are currently hiring over 300 sewing employees to meet demand I anticipate in 2014.”
American Apparel ranks as the 14th-largest supplier in the industry, after reporting 2012 North American ad specialty sales of $96.8 million, a 7.3% increase over the previous year.