Perry Ellis Beats, Ups Outlook - Analyst Blog
May 26 2011 - 10:00AM
Zacks
Perry Ellis International
Inc. (PERY) posted adjusted earnings per share of $1.08 in
the first quarter of fiscal 2012, treading ahead of the Zacks
Consensus Estimate of 98 cents and the year-ago performance of 81
cents. GAAP net earnings came in at 99 cents per share, up from 81
cents in the year-earlier period.
Perry Ellis' total revenue surged
31% year over year in the quarter to $288.3 million, which also
surpassed the Zacks Consensus Estimate of $272.0 million. Sales
growth was aided by improved performances at the Golf and Hispanic
lifestyle brands, as well as Perry Ellis Collection. Organic
revenue grew 13% to $249 million, excluding the recently acquired
Rafaella business. In the first quarter, Rafaella injected $38.9
million to the total revenue.
During the quarter, Perry Ellis'
gross profit leaped 23% year over year to $97.0 million. However,
gross margin was 33.6% of total revenue compared to 35.7% in the
comparable prior-year quarter. The decline was due to the
Rafaella business (acquired in late January), which had a lower
gross margin and dampened first quarter gross margin of Perry Ellis
by 110 basis points. Incremental program business and the effect of
converting licenses for small leather goods and dress shirts into
wholesale businesses also hurt first quarter gross margin by
approximately 100 basis points.
Financials
At quarter end, Perry Ellis had
cash and cash equivalents of $21.7 million. Long-term debt was
$219.5 million.
Outlook
Perry Ellis expects earnings per
share in the range of $2.40–$2.50 for fiscal 2012, compared to
$2.30–$2.40 guided earlier. The expectation for revenue was
reiterated at $1 billion.
Our Take
Perry Ellis, the designer,
distributor and licensor of a broad line of men's and women's
apparel, accessories, and fragrances, remains optimistic about the
performance of Rafaella as well as current business trends.
Management remains committed to integrate its niche businesses such
as Golf and Hispanic as well as the Perry Ellis Collection with
Rafaella’s women’s sportswear. We believe this is a positive step
toward the strength of Perry Ellis’ market share gain.
Perry Ellis is currently a Zacks #2
Rank (short-term 'Buy' rating). For the long term, we reiterate our
“Neutral” recommendation on the stock. Perry Ellis' peers include
Polo Ralph Lauren Corp. (RL) and CROCS
Inc. (CROX)
CROCS INC (CROX): Free Stock Analysis Report
PERRY ELLIS INT (PERY): Free Stock Analysis Report
POLO RALPH LAUR (RL): Free Stock Analysis Report
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