Tomahawk, WI 08/20/2014 (Basicsmedia) – American Apparel Inc. (NYSEMKT:APP) remained upbeat in the market on Tuesday trading session consequently surging by 9.09%, after reporting narrower than expected second quarter loss of $16.2 million against $37.5 million reported a year ago. American Apparel has had its fair amount of troubles on the sideline especially with its former CEO, Dov Charney, who owns 42% of the company and has been pushing for reinstatement. Bloomberg’s Eric Chemi, on the other hand, maintains that the American Apparel Inc. (NYSEMKT:APP)’s stock begun plummeting even before the ousting of the former CEO.
Charney maintains that the impressive result registered in the quarter serve as a report for his performance in the company considering he was at the helm all but 12 days of the quarter. Majority shareholder, Charney, was ousted on June 18th by the board, on allegations of misconduct, sexual harassment, as well as anti-discrimination policies and misuse of the company’s funds.
“I mean the stock has been going down just straight for years before any of this stuff happened.[…] we know it is a penny stock, we know that despite being there his whole life, he did run the company into the ground just only on business alone, he shouldn’t be there,” said Mr. Chemi.
American Apparel Inc. (NYSEMKT:APP) total sales for the quarter came in flat at $162.4 million with sales in stores opened for more than a year plummeting by 6%. Total revenue was, on the other hand, up by 9%. American Apparel profit declined by 2% from a high of $83.9 million last year same period, consequently coming in at $82.4 million with gross margin also dropping from 51.7% to 50.7%.
Going forward, American Apparel Inc. (NYSEMKT:APP) expects its adjusted EBITDA earnings to be in the range of between $40 million and $45 million. American Apparel closed the second quarter with $10.2 million in cash and $30.6 million outstanding on its $50million revolving credit facility. The wholesale business continues to be the best performing for the company having registered a 9% increase in net sales.