Perry Ellis International Pre-Announces Third Quarter Results and Revises Fiscal 2009 Guidance
November 13 2008 - 8:30AM
Business Wire
Perry Ellis International, Inc. (NASDAQ:PERY) announced today that,
based on preliminary estimates, the Company anticipates total
revenue for its third quarter ended October 31, 2008 (�third
quarter fiscal 2009�) at $222.8 million. This represents a decrease
of approximately $4.7 million or 2% from total revenues of $227.5
million for the third quarter ended October 31, 2007 (�third
quarter fiscal 2008�). The Company also indicated that based on
preliminary results, it expects diluted earnings per share to be in
the range of $0.30 to $0.33, as compared to diluted earnings per
share of $0.55 during the same period last year. Final results for
third quarter fiscal 2009 are scheduled to be released before the
market opens on November 20, 2008. Oscar Feldenkreis, President and
COO, commented, �As we all know, we are experiencing the most
significant economic slowdown that we have ever witnessed or have
been a part of. We are satisfied that, despite the fact of losing
customers because of Chapter 11 and the economic situation in
general, we still managed to ship more product than during the same
period last year. Unfortunately because of returns and allowances
that we had to take to support our retail partners, we ended up
with total revenues 2% below last year.� Compared to the third
quarter fiscal 2008, results were negatively affected by: Increase
of approximately $4.0 million in markdowns and sales allowances
Increase of approximately $5.2 million in SG&A expenses for the
Contemporary Lady�s businesses, which were acquired in February of
this fiscal year Decrease of approximately $4.5 million in sales
related to certain customers who filed for Chapter 11
reorganization and/or liquidation Net reduction of approximately
$1.6 million in operating income related to the Perry Ellis Outlet
and Original Penguin retail divisions Non-cash impairment charges
of $0.6 million related to marketable securities These results were
partially offset by better than expected performances for the Perry
Ellis brand, European and Licensing platforms plus strong
performance for denim, golf and Hispanic categories. �Our retail
partners are expecting an extremely promotional Christmas season,
but at this point, we have no visibility on what the Thanksgiving
weekend and the Christmas season will bring. While it is obvious
that some of our retail partners have suffered substantial
decreases in sales, it is also true that many other segments of our
business have not been affected. We feel that our policy of
diversified channels of distribution is serving us well during
these turbulent times,� said George Feldenkreis, Chairman and CEO.
Strategic review of underperforming businesses The Company
announced that it has launched a formal review process to
rationalize expenses at its underperforming brands and/or
businesses. Five major areas are being addressed: Men�s specialty
store business for all brands Real Estate Realignment Perry Ellis
Retail Distribution costs Shared services Initial identified
savings by the company during the strategic review are expected to
produce annual SG&A savings in the range of $5.0 to $6.0
million starting in fiscal 2010, with further cost reductions under
evaluation. Initial actions identified include: Consolidation of
Tampa�s bottoms production department into Miami�s headquarters
Headcount reduction in specialty store businesses and shared
services Rationalization of real estate and consolidation of NYC
offices �We are very focused on analyzing all of our business units
and making the adjustments which are necessary to keep Perry Ellis
International a strong company � not only now � but into the
future,� Mr. Feldenkreis commented. Updated Fiscal 2009 Guidance
The Company updated its fiscal 2009 earnings guidance to the range
of $0.90 to $1.10 per fully diluted share from the previously
announced range of $1.67 to $1.72 per fully diluted share. This
guidance includes one time costs in the $0.10 to $0.15 range
related to actions identified during the strategic review. The
Company also revised its revenue guidance for the twelve months
ending January 31, 2009 (�fiscal 2009�) from the $910 - $925
million to the $875 - $900 million range. �We have taken decisive
action to rationalize our cost structure and manage our businesses
according to the new economic environment. However, given the costs
that these actions will have during the remainder of our fiscal
2009 and the uncertainty with consumer spending ahead of the
Holiday Season, we have updated our guidance to reflect this new
reality. We are positioning Perry Ellis International to be a
stronger and more nimble company when the economy turns around, so
we can take full advantage of the many growth opportunities we
believe will become available,� Mr. Feldenkreis concluded. Third
quarter final results and conference call Finally, the Company
announced that it will release its complete financial results for
the third quarter of fiscal year 2009 on Thursday, November 20,
2008 before the market opens and will sponsor a conference call to
discuss these results on the same day at 10:30 a.m. EST (9:30 a.m.
CST; 8:30 a.m. MST; 7:30 a.m. PST). The call will be hosted by
George Feldenkreis, Chairman and Chief Executive Officer; Oscar
Feldenkreis, President and Chief Operating Officer; and Thomas
D�Ambrosio, interim Chief Financial Officer. To access the live
broadcast, please visit the investor relations section on the
Company's homepage at http://www.pery.com. A Digital Replay of the
conference call will be available until December 19, 2008 starting
two hours after its completion, and can be accessed by dialing
toll-free 888-203-1112 or 719-457-0820 and giving the conference
I.D. # 5335249. About Perry Ellis International Perry Ellis
International, Inc. is a leading designer, distributor and licensor
of a broad line of high quality men's, women's and children�s
apparel, accessories and fragrances. The Company�s collection of
dress and casual shirts and tops, suit separates, sweaters,
dresses, pants, shorts, jeans wear, outerwear, swimwear, golf
apparel and activewear is available throughout all major levels of
retail distribution. Through its wholly owned subsidiaries, The
Company owns a portfolio of nationally and internationally
recognized brands including Perry Ellis�, Perry Ellis America�,
Perry Ellis Portfolio�, Jantzen�, Laundry by Shelli Segal�, C&C
California�, Cubavera�, Munsingwear�, Savane�, Farah�, Original
Penguin� by Munsingwear�, Grand Slam�, Natural Issue�, Pro Player�,
the Havanera Co.�, Axis�, Axist�, Manhattan�, John Henry�, Tricots
St. Raphael�, Mondo di Marco�, Redsand�, Gotcha�, and MCD�. The
Company enhances its roster of brands by licensing trademarks from
third parties including Dockers� for outerwear, Nike� and Jag� for
swimwear, and PING� and PGA TOUR� for golf apparel. Additional
information on the Company is available at http://www.pery.com.
Safe Harbor Statement We caution readers that the forward-looking
statements (statements which are not historical facts) in this
release are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on current expectations rather than historical
facts and they are indicated by words or phrases such as
"anticipate," "could," "may," "might," "potential," "predict,"
"should," "estimate," "expect," "project," "believe," "plan,"
"envision," "continue," "intend," "target," "contemplate," or
"will" and similar words or phrases or comparable terminology. We
have based such forward-looking statements on our current
expectations, assumptions, estimates and projections. While we
believe these expectations, assumptions, estimates and projections
are reasonable, such forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
and other factors that may cause actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements, many of which are beyond our control.
These factors include: general economic conditions, a significant
decrease in business from or loss of any of our major customers or
programs, anticipated and unanticipated trends and conditions in
our industry, including the impact of recent or future retail and
wholesale consolidation, the effectiveness of our planned
advertising, marketing and promotional campaigns, our ability to
contain costs, disruptions in the supply chain, our future capital
needs and our ability to obtain financing, our ability to integrate
acquired businesses, trademarks, tradenames and licenses, our
ability to predict consumer preferences and changes in fashion
trends and consumer acceptance of both new designs and newly
introduced products, the termination or non-renewal of any material
license agreements to which we are a party, changes in the costs of
raw materials, labor and advertising, our ability to carry out
growth strategies including expansion in international and direct
to consumer retail markets, the level of consumer spending for
apparel and other merchandise, our ability to compete, exposure to
foreign currency risk and interest rate risk, possible disruption
in commercial activities due to terrorist activity and armed
conflict, and other factors set forth in Perry Ellis
International's filings with the Securities and Exchange
Commission. Investors are cautioned that all forward-looking
statements involve risks and uncertainties, including those risks
and uncertainties detailed in Perry Ellis' filings with the SEC.
You are cautioned not to place undue reliance on these
forward-looking statements, which are valid only as of the date
they were made. We undertake no obligation to update or revise any
forward-looking statements to reflect new information or the
occurrence of unanticipated events or otherwise.
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