(Reuters) – American Apparel Inc’s (APP.A) quarterly results came in above Wall Street estimates, boosted by a shift towards higher-margin retail sales.

“While it is still very early, we are encouraged by some indications pointing to the beginning of momentum in our sales,” Chief Executive Dov Charney said in a statement.

The company, popular for its colorful T-shirts and other basics worn by urban hipsters, said it earned $4.2 million, or 5 cents a share for the third quarter, compared with $2.3 million, or 3 cents a share, a year ago.

Analysts were expecting the company to earn 3 cents a share, according to Thomson Reuters I/B/E/S.

Total sales slid 3 percent to $150.3 million, but topped estimates of $145.5 million.

The company, which manufactures products at its Los Angeles factory and has made immigration reform a central theme of its corporate message, said gross margin for the quarter was 58.1 percent, up from 49.1 percent last year.

The lower-margin wholesale business contributed 26.7 percent to total net sales compared with 30.4 percent, a year ago.

American Apparel still expects its full-year net sales to be in the range of $540 to $555 million and maintained its forecast of a net loss of $1 million to a profit of $4 million for the period.

The company’s shares closed at $2.61 Monday on the American Stock Exchange. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Aradhana Aravindan)

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