Perry Ellis Earnings Better Than Expected
November 19 2015 - 9:10AM
Dow Jones News
Perry Ellis International Inc. adjusted its outlook Thursday as
it reported better-than-expected earnings but revenue missed on the
sale of one of its brands and some exclusive label transitions.
Chief Executive Oscar Feldenkreis pointed to growth across the
company's key lifestyle brands of Perry Ellis, Rafaella and Golf
Lifestyle, as well as expansion in gross margin and expense
discipline, which drove a more than fivefold increase in adjusted
diluted earnings per share.
The company lifted its 2016 adjusted earnings per share guidance
to the range of $1.81 to $1.88, from its previous guidance of $1.78
to $1.85. But it slashed its expectations for revenue—estimated to
come in between $910 million to $920 million, compared with earlier
guidance of $925 million to $935 million.
The Miami company, known for its men's dress shirts and slacks,
has a portfolio of dozens of brands that include Callaway Golf and
Original Penguin, in addition to its namesake label. The company
has been under pressure from activist investor Legion Partners
Asset Management LLC, which has been pushing publicly for changes
since last summer.
Legion and the California State Teachers' Retirement System, or
Calstrs—which has an investment in Legion—have been particularly
concerned with Perry Ellis's profit margins. The company has said
it is targeting 38% by its 2019 fiscal year. In the third quarter,
its gross margin expanded to 35.7% from 33.3% a year earlier.
For the third quarter, Perry Ellis reported a profit of $2.3
million, or 15 cents a share, compared with a loss of $437 million,
or three cents a share, a year earlier. Adjusted earnings were 16
cents a share.
Revenue shrank 2.8% to $205.4 million, driven by the sale of
C&C California and the transition of certain exclusive labels
to the company's national lifestyle brands.
Analysts expected the company to report adjusted earnings of
four cents a share and break-even on revenue.
Shares, down 31% this year, were inactive premarket.
Write to Anne Steele at Anne.Steele@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 19, 2015 08:55 ET (13:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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