Net sales for the first quarter ending March 31, 2015 slipped 9 per cent over the prior year first quarter at American Apparel, Inc., a manufacturer, distributor and retailer of branded fashion basic apparel.
An American Apparel press release informed that first quarter of 2015 net sales dipped 9 per cent to $124.3 million from $137.1 million for the same period in 2014.
“Excluding the year over year impact from foreign exchange and stores closed in 2014, net sales declined 4 per cent from a year earlier quarter,” the apparel retailer said.
First quarter of 2015 comparable store sales witnessed de-growth of 5 per cent, flat from the same quarter in 2014.
“Negatively impacting comparable store sales was a strategic initiative to reduce inventory levels by accelerating the sale of slow-moving merchandise in the retail stores,” the retailer added.
“This initiative shifted the merchandise mix in the retail and online stores towards clearance-related product,” it observed.
Gross profit for the reporting quarter plunged 34 per cent to $47.5 million from $72 million in the corresponding period of the previous year.
American Apparel attributed the decline to discounts given to reduce inventory levels by accelerating the sale of slow-moving inventory, foreign exchange impact and lower retail sales.
Gross profit, excluding significant charges however staged a turnaround to reach 42.0 per cent of net sales in the first quarter of 2015 from 52.5 per cent in the first quarter of 2014.
Operating expense for the quarter under review fell slower by 11 per cent from $79.0 million compared to $70.3 million from a year ago quarter.
According to the retailer, this was due primarily to lower payroll from its cost reduction efforts and reduced rent, supplies and miscellaneous activities.
Net loss for the first quarter of 2015 rose a massive 380 per cent to $26.4 million or $0.15 per share as against net loss of $5.5 million, or $0.05 per share for the first quarter of 2014.
“Results for the first quarter of 2015 include $9.5 million, or $0.05 per share, related to significant charges, American Apparel said.
As of March 31, 2015, it had $20.9 million in cash, $35.1 million outstanding on its asset-backed revolving credit facility and $11.2 million of availability for additional borrowing under the facility.
As of May 6, 2015, American Apparel had $5.2 million of availability for additional borrowings under the facility.
