American Apparel Inc.’s second-quarter profit dropped 34 percent as the tough economy hurt sales, but the earnings surpassed Wall Street expectations.

The Los Angeles manufacturer and retailer late Thursday reported net income of $4.5 million (6 cents per share), compared with $6.8 million (10 cents) per share a year ago.

Sales rose 2 percent to $136 million, but sales in stores open at least a year fell 10 percent. Another troubling trend was a 17 percent decline in wholesale sales.

Analysts surveyed by Thomson Reuters on average expected net income of 3 cents per share on revenue of more than $140 million.

Operating expenses increased to 53.6 percent of sales, compared with 46.9 percent a year earlier, with the company citing higher payroll, rent, occupancy and depreciation expenses.

The company opened eight stores in the quarter, and it still expects to open 25 to 30 stores by the end of the year. But due to the economy, it lowered its revenue outlook to a range of $540 million to $555 million, and said full-year results are expected to range between a loss of $1 million and profit of $4 million.

“With each successive quarter, our brand is being introduced to new people in new cities, and the enthusiasm we see among consumers each time we open a new store we believe demonstrates the continuing strength of our brand,” Chief Executive Dov Charney said in a statement. “We believe that our business is well positioned for the long-term and that the company will emerge from this consumer downturn with an enhanced ability to deliver on revenue and profitability targets.”

Shares closed down 33 cents, or 8 percent, to $3.67 on the New York Alternet.