Even Wall Street was surprised to learn that American Apparel turned a profit in the fourth quarter.
Following years of financial struggle (which still aren’t totally over), Dov Charney’s cotton empire produced a net income of $4.9 million in the quarter ending December 31, WWD reports. Diluted shares went up four cents despite predictions of a two cent decline.
Sales went up 9.8%, including a 42% increase in online sales. Charney attributed the improvement to “solid growth and continuing momentum in all business segments and almost all major geographies.”
Despite the fourth quarter profit, 2012 was still a loss of $37.3 million–a little better than last year’s net loss of $39.3 million. So, long story short, American Apparel still isn’t doing well; it still has quite a bit of debt; and it still needs a lot of help from investors.
If anything, this fourth quarter profit will help show investors that it’s improving and thus not beyond help. Hopefully, in 2013, Charney and co. will be able to continue paying back their investors at a lower interest rate. “We believe we have demonstrated performance that supports refinancing our debt at a lower cost and we are actively involved in evaluating possible financing alternatives,” Charney told the trade.
Maybe we’ll also see the resolution of that choking lawsuit.