As retailers released their disappointing December comps this week, many included revised guidance with their results and gave cover to the vendor side to lower expectation as well. Notably, Perry Ellis lowered its guidance for the quarter and year, while an analyst house lowered its expectations for VF Corp. On the other end, Big 5 Sporting Goods and Jarden were among the few companies to raise their guidance, albeit slightly, in this difficult financial environment.
Big 5 Sporting Goods Corp. said it expects fourth quarter earnings to come in between 13 cents to 16 cents a share, reaching the upper end of its previous forecast calling for earnings between 7 cents to 17 cents a share versus 28 cents a share in the year-ago period. Wall Street's consensus estimate had been 12 cents a share. Comps declined 8.6% in Q4, in line with previously issued guidance. BGFV said the comp decline was due to a decrease in customer traffic resulting from the continuation of the challenging consumer environment.
Jarden Corp. finished 2008 with more than $360 million in cash on the balance sheet and expects fourth quarter revenue to be slightly above its prior outlook of $1.3 billion. Full year revenue for 2008 is expected to be approximately $5.35 billion, said Jarden. Accordingly, the company anticipates that its leverage ratio for bank purposes at Dec. 31, 2008 will be approximately 3.7 times.
Martin E. Franklin, chairman and chief executive officer of Jarden Corporation, stated, “Our businesses continued to deliver in the fourth quarter despite the challenges in the macro environment and we believe we are well positioned for 2009. In the current environment, we felt that it was important to provide our positive fourth quarter revenue and cash position information on as timely a basis as possible.”
Perry Ellis International, Inc., which produces and sells Nike Swimwear and a number of beach and golf brands, anticipates revenues for the fourth quarter ending Jan. 31, 2009 to be in the $200 million to $210 million range, compared to $212.3 million in Q4 last year. Accordingly, Perry Ellis updated its fiscal 2009 earnings guidance to the range of 55 cents to 65 cents per fully diluted share from the previously announced range of 90 cents to $1.10 per fully diluted share. The company also revised its revenue guidance for the twelve months ending Jan. 31, 2009 from the $875 million to $900 million to the $860 million to $870 million range.
PERY said the declines are primarily related to retail partners requesting later deliveries of goods, which delayed spring deliveries by 30 to 60 days, as well as a significant increase in markdowns and sales allowances for the holiday season, which was more promotional than originally anticipated.
Thomas Weisel Partners responded to VF Corp.s challenging holiday season with lowered Q4 and FY09 estimates. “Due to aggressive household borrowing practices in recent years and the sharp decline in asset values in the past 18 months, we believe consumer delivering is in the early stages of a lengthy process,” said the firm in an analyst report. “While compelled by the growth potential of VFs brand portfolio, we believe it prudent to take a more cautious view on 2009.”
Thomas Weisel lowered its VF Corp. fourth quarter estimates from the originally estimated $2.01 billion to $1.51 billion in revenues to $1.98 billion to $1.42 billion. Fiscal year 2009 estimates have dropped from $8.16 billion to $6.09 billion to $7.93 billion to $5.59 billion.
