NEW YORK (Associated Press) - Clothes maker American Apparel Inc. said Thursday second-quarter profit rose 42 percent as retail sales surged.

Profit for the quarter ended June 30 rose 42 percent to $6.8 million, or 10 cents per share from $4.8 million, or 10 cents per share last year. Shares outstanding rose 46 percent to 70.7 million.

Revenue rose 39 percent to $133 million from $95.7 million last year.

Sales in stores open at least one year, a key retail metric known as same-store sales, rose 23 percent.

Retail sales grew 58 percent to $81.3 million, while wholesale sales grew 16 percent to $51.7 million.

The benefit of a greater amount of retail and online sales _ which have a higher gross margin than wholesale sales _ was offset by hiring about 1,400 new manufacturing employees to support increased production.

The Los Angeles company expects 2008 earnings between 32 cents and 36 cents per share, excluding one-time items, while analysts polled by Thomson Reuters expect a profit of 35 cents per share.