ELY Callaway Golf Co

Perry Ellis International Inc. said its loss narrowed in the latest quarter, thanks to margin expansion and higher sales.

As a result of the second-quarter improvement, the company further lifted its full-year earnings guidance.

Shares surged 11% in premarket trading, erasing the year-to-date loss notched through Wednesday's close.

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 owns about 6% of the company and 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. In the second quarter, the company's margin expanded to 35.6% from 34.6% a year earlier, helped by a shift in revenue mix toward higher-margin businesses. The company has said it is targeting 38% by its 2019 fiscal year.

In all for the quarter, Perry Ellis reported a loss of $1.3 million, or 9 cents a share, compared with $1.6 million, or 11 cents a share, a year earlier. Including a gain of 33 cents a share stemming from an early extinguishment of debt and excluding one-time costs, Perry Ellis reported a profit of 31 cents a share.

Revenue grew 4.8% to $213.3 million.

Analysts expected the company to break even and report $203.6 million in revenue, according to Thomson Reuters.

For the full year, the company now projects $1.78 to $1.85 a share, up from its earlier range of $1.68 to $1.75 a share.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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(END) Dow Jones Newswires

August 20, 2015 08:25 ET (12:25 GMT)

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