Perry Ellis International, Inc. (NASDAQ:PERY) today provided an
update on expected fourth quarter (“fourth quarter fiscal 2012”)
and full fiscal year ended January 28, 2012 (“fiscal 2012”).
For fourth quarter fiscal 2012, the Company expects to report an
11% increase in total revenue to $229 million as compared to $207
million last year. Adjusted earnings per share (“EPS”) are expected
in the range of $0.35 - $0.38. Fiscal 2012 revenue is expected to
approximate $980 million, an increase of 24% from the prior year.
Reflecting the factors below, the Company currently expects full
fiscal year 2012 adjusted EPS in a range of $1.91 - $1.94. Adjusted
earnings per fully diluted share exclude costs related to the early
extinguishment of debt. The Company noted that any potential
impairment charges or write downs that may arise from its strategic
brand review discussed below would reduce the Company’s EPS to be
determined and reported under generally accepted accounting
principles (“GAAP”).
The Company noted that revenues and gross margin in the fourth
quarter were pressured due to retail partners requesting later
deliveries of goods, as well as a significant increase in
promotional markdowns and sales allowances for the holiday season.
On a positive note, the Company saw strength in its golf lifestyle,
women’s dresses and swim businesses. In addition, the Company
maintained expense discipline and saw a favorable impact from
reversing long-term incentive compensation expense. The Company
also anticipates a higher effective tax rate for the year due to an
increased mix of domestic versus international income.
The Company noted that it expects to end fiscal 2012 with $24
million in cash. Total inventory at January 28th, 2012 is expected
to be approximately $198 million, an 11% increase, compared to $178
million in the comparable prior year period and in line with the
Company’s expectation of $200 million.
“This holiday season, the entire retail industry was faced with
a highly promotional environment meant to drive customer purchases,
and we were not immune to this activity,” said Oscar Feldenkreis,
president and chief operating officer of Perry Ellis International.
“While we experienced increased traffic in our direct to consumer
business, we also increased promotions to be in line with the
environment to remain competitive. As a result, the positive
momentum in revenue came at the expense of profitability and we
acknowledge the environment remains challenging. With that
backdrop, we are streamlining our operations and eliminating less
productive overhead. We have begun a strategic brand review that
will maximize profitability in our core businesses: men’s and
ladies sportswear, golf and Hispanic lifestyle, and swim.”
Strategic Brand Review
The Company has launched a strategic review of its brand
portfolio that will be completed during the first half of fiscal
2013 with a goal of rationalizing brands and businesses to position
the Company for long-term growth. The Company anticipates it will
begin to implement initiatives during the second half of fiscal
2013.
“We will focus more intently on those businesses that offer the
best value and the greatest potential for profitable growth.”
commented Oscar Feldenkreis.
In addition, the Company expects to increase efficiency by
consolidating distribution facilities and foreign sourcing offices
and streamlining operational support functions.
“Our goal is to further reduce expenses from non-core
infrastructure areas and redeploy part of that capital to marketing
and direct-to-consumer infrastructure, continued Mr. Feldenkreis.
Our new collaboration of Perry Ellis menswear and Duckie Brown is a
perfect example of the type of investments that we will make to
elevate our businesses.”
Fiscal 2013 Outlook
“We believe that the infusion of new management and creative
teams along with operations support in our Perry Ellis and Rafaella
sportswear businesses will begin to be reflected in second half of
fiscal 2013 results,” commented George Feldenkreis, chairman and
chief executive officer of Perry Ellis International. “We will take
a conservative approach in our financial plan until we see a
lessening of the promotional environment.”
Mr. Feldenkreis added, “The Company believes its balance sheet
to be strong. We have reduced our total net debt to capitalization
to 31% versus 41% last year and this strength provides us the
opportunity to continue to support our core businesses. During
fiscal 2012, we financed senior subordinated notes through 2019 as
well as refinanced our credit facility for an additional 5 year
term.”
The Company expects to report actual full fiscal 2012 results,
along with its fiscal 2013 guidance in March 2012.
About Perry Ellis International
Perry Ellis International, Inc. is a leading designer,
distributor and licensor of a broad line of high quality men's and
women's apparel, accessories and fragrances, as well as select
children's apparel. The Company's collection of dress and casual
shirts, golf sportswear, sweaters, dress pants, casual pants and
shorts, jeans wear, active wear, dresses and men's and women's
swimwear is available through all major levels of retail
distribution. The Company, through its wholly owned subsidiaries,
owns a portfolio of nationally and internationally recognized
brands, including: Perry Ellis(R), Jantzen(R), Laundry by Shelli
Segal(R) , C&C California(R) , Rafaella(R) , Cubavera(R) ,
Centro(R) , Solero(R) , Munsingwear(R) , Savane(R) , Original
Penguin(R) by Munsingwear(R) , Grand Slam(R) , Natural Issue(R) ,
Pro Player(R) , Havanera Co. (R) , Axis(R) , Tricots St. Raphael(R)
, Gotcha(R) , Girl Star(R) , MCD(R) , John Henry(R) , Mondo di
Marco(R) , Redsand(R) , Manhattan(R) , Axist(R) , Farah(R) , Anchor
Blue(R) and Miller's Outpost(R) . The Company enhances its roster
of brands by licensing trademarks from third parties, including:
Nike(R) and Jag(R) for swimwear, and Callaway(R), TOP-FLITE(R) ,
PGA TOUR(R) and Champions Tour(R) 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," "believe," "budget," "contemplate," "continue,"
"could," "estimate," "expect," "guidance," "indicate," "intend,"
"may," "might," "plan," "possibly," "potential," "predict,"
"probably," "proforma," "project," "seek," "should," "target," 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, recent and future economic conditions,
including turmoil in the financial and credit markets, 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 protect our trademarks, our ability to
integrate acquired businesses, trademarks, trade names 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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