American Apparel Earnings: Here’s Why Investors are Happy Now

American Apparel Inc (AMEX:APP) had a loss and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 1.51%.

American Apparel Inc Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.10 in the quarter versus EPS of $-0.14 in the year-earlier quarter.

Revenue: Rose 8.55% to $162.24 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: American Apparel Inc reported adjusted EPS loss of $0.10 per share. By that measure, the company missed the mean analyst estimate of $-0.05. It beat the average revenue estimate of $162.19 million.

Quoting Management: Dov Charney, Chairman and CEO of American Apparel, Inc. stated: “We are pleased with the continued strong sales performance in all three business channels, particularly in light of the sales we believe we lost as a result of the supply chain issues we faced this quarter. We are, however, executing at the store level and in our manufacturing facility, and customer demand of our offering remains strong. While the transition to a new distribution center and other supply chain initiatives negatively impacted the quarter, we are committed to making the necessary investments to reduce costs and improve our operating efficiency over the longer-term. These initiatives will strengthen our supply chain and better position us to achieve our long-term objective of a double-digit EBITDA margin. Finally, for the first week of August we have seen positive comparable store sales momentum in our stores.”

Key Stats (on next page)…

Revenue increased 17.51% from $138.06 million in the previous quarter. EPS increased to $-0.10 in the quarter versus EPS of $-0.21 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a loss of $0.01 and has not changed. For the current year, the average estimate is a loss of $0.22, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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