American Apparel Soars After Strong Q4 Report and Guidance

Small-cap retailer American Apparel

released its fiscal fourth-quarter earnings results on Monday after the closing bell. The company's earnings and revenue beat Wall Street consensus estimates and American Apparel offered upbeat sales guidance for fiscal 2013. In the wake of the bullish report, American Apparel shares jumped almost 15 percent to $1.48 in Monday's after-hours trading session. The company's Chairman and CEO Dov Charney said in a statement, "We are pleased with our fourth quarter results that again show solid growth and continuing momentum in all business segments and almost all major geographies. Significant sales growth, operating expense control and the acceleration of leverage of our fixed costs allowed us to increase EBITDA performance to $17.8 million for the fourth quarter of 2012 from $9.1 million for the fourth quarter of 2011." For the fourth-quarter, American Apparel reported net income of $4.90 million or $0.04 per share, compared to a net loss of $11.16 million or $0.11 per share, in last year's corresponding quarter. Heading into the report, Wall Street analysts' had consensus earnings per share estimates calling for a loss of $0.02. Net sales for the period were up 10 percent to $173.03 million from $157.58 million in the year ago quarter. This came in slightly ahead of Street consensus revenue estimates of $172.38 million. The company's comparable retail and online sales were up 11 percent in Q4, driven by a 42 percent increase in Internet sales. Wholesale revenue was up 19 percent in the period. Gross margin at American Apparel was 53.8 percent, an increase versus the 53.2 percent gross margin last year. For fiscal 2012, the company reported a net loss of $37.27 million or $0.35 per share, compared to a net loss of $39.31 million or $0.42 per share, in fiscal 2011. Net sales for the fiscal year were up 13 percent to $617.31 million compared to $547.34 million last year. Looking ahead to fiscal 2013, American Apparel guided for sales of $652 to $660 million. This is ahead of current consensus revenue estimates of $647.50 million for the fiscal year. Prior to Monday's after hours jump, the stock had climbed almost 28 percent already in 2013. American Apparel shares were devastated during the financial crisis, but have been showing signs of life over the last 52-weeks, rising 72 percent. Nevertheless, the company remains a small, niche player in the retail space with a market cap under $140 million.