American Apparel Inc. shares dropped 6 percent Tuesday, a day after the trendy clothing designer and retailer said its third-quarter profit fell 61 percent as it spent $13.2 million on stock-based compensation.
Los Angeles-based American Apparel after Monday’s market closed reported net income of $2.3 million (3 cents per share), compared with $6 million (12 cents) a year earlier. Revenue rose 45 percent to almost $155 million, with same-store sales up 24 percent. The company awarded 1.9 million shares of common stock to eligible manufacturing employees.
Analysts surveyed by Thomson Financial expected per-share net income of 13 cents on revenue of $149 million.
“While we recognize that the overall economic climate is difficult particularly in retail, the sales performance of the stores we opened during the period has exceeded our expectation and overall we have not experienced any discernable weakening in demand at our retail business,” said Adrian Kowalewski, director of corporate finance and development, during a conference call.
The clothing maker reiterated its full-year per-share profit guidance of 32 cents per share to 36 cents per share. Analysts expect 37 cents per share.
Shares were down 38 cents to $6.19 on the American Stock Exchange.