American Apparel reports losses in Q1 and new "at-the-market" offering programme
Los Angeles-based company American Apparel on Tuesday announced its first quarter 2015 results ending on March 31st, 2015. The company reported a decrease in sales, gross profit and a net loss for the quarter.
Net sales for the first quarter of 2015 decreased 9% 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 decreased 4% for the same period in 2014. First quarter comparable store sales were negative 5% for both the first quarter of 2015 and 2014.
Gross profit for the first quarter of 2015 decreased 34% to $47.5 million from $72 million for the same period in 2014. This was due to discounts related to management’s strategic initiative to reduce inventory levels by accelerating the sale of slow-moving inventory, the foreign exchange impact of the strengthening US dollar and lower retail sales.
Net loss for the first quarter of 2015 was $26.4 million, compared to net loss of $5.5 million for the first quarter of 2014. Results for the first quarter of 2015 include $9.5 million related to significant charges.
In a separate release published on the heels of its Q1 results, the company also announced that it has commenced a $10.0 million "at-the-market" offering program. Through the program, American Apparel may offer to sell its shares of stock at an aggregated sales price of up to $10 million through Cowen and Company, LLC, which will serve as a sales agent. The net proceeds of the sale will be used as working capital and general corporate purposes.
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