Perry Ellis International Inc. continues to see strength in both golf apparel, led by Callaway, as well as Nike Swim, as both segments enter their prime selling periods.
In its golf business, the company saw strength in bottoms as it introduced new pants and shorts with a comfort waistband that exceeded sales expectations.
Oscar Feldenkreis, president and CEO, on a conference call with analysts said the golf segment also added new fabrics with new motion technology in the manufacturing of the garments. He said, “This has led to a fantastic beginning of the golf seasons for us across all distribution channels and brands in the United States, Canada and Europe.”
The golf apparel segment includes Callaway, Grand Slam, PGA Tour, Ben Hogan and Jack Nicklaus.
“As we move into the most important quarters for golf, we are very optimistic that these new products will continue to outperform,” said Feldenkreis. “The importance of stretch is gaining momentum across retailers. We are pleased to be one of the early movers in offering stretch product and expect to capitalize on our proven expertise in this area.”
During the quarter, Callaway was expanded into Golf Galaxy, PGA Tour Superstore, Academy and Golfhound in Canada. The company continues to expect golf to grow in high single digits this year.
For Nike Swim, the first quarter is the brand’s largest shipping quarter for the year, and Feldenkreis said the company is “pleased with its performance of retail across men’s and women’s and young athletes and swim gear.”
He added, “Our Nike business continues to perform extremely well in the U.S. and we’ve seen significant opportunities ahead to expand international.”
The company expects to be shipping Nike Swim product into about 30 countries by year end. The expansion of Hydroguard UV protection swim tops continues to perform well and is expected to build upon the positive momentum with upcoming deliveries. The introduction of extended sizes in men’s and women’s also has been a success across retail. Finally, the reception to 2018 Nike spring season has been “very strong.” Feldenkreis added, “Overall, we expect to maintain our dominance in the swim market where we’re taking share domestically with the expectations of transferring this success on a global scale.”
Companywide, Perry Ellis International’s sales declined 7.3 percent to $242 million, but exceeded guidance calling for revenue between $230 million and $235 million. The sales decline reflected a planned decrease in shipments given a reduction of customers’ doors and inventory discipline to drive higher-margin sales. Disciplined management of inventory across channels, along with increased sales of higher-margin core brands, led to a 120 basis point expansion in gross margin to 37.6 percent.
Net earnings were down 10.4 percent to $12.8 million, or 83 cents a share, but ahead of guidance of 70-75 cents
The company’s other brands include Perry Ellis, Original Penguin, Laundry by Shelli Segal, Rafaella, Cubavera, Savane, John Henry, Manhattan, Axist, Jantzen and Farah.
Perry Ellis maintained its guidance for the year calling for revenues of $870 million to 880 million and adjusted EPS of $2.07 to $2.17.
“As we look at the remainder of the year, we see continued headwinds from lack of consumer traffic and macroeconomic issues,” said CFO David Rattner on the call. “We feel that we are positioned well in terms of our product focus and our execution and performance.”
Photo courtesy Nike Swim