While its overall business was impacted by the West Coast port slowdown, Perry Ellis International Inc. said its golf apparel segment delivered a high-single digit gain in the fourth quarter.
On a conference call with analysts, Oscar Feldenkreis, president and COO, said the Callaway apparel business remains “extremely promising,” with the launch of the Callaway Athleisure training line for the avid golfer performing “very well.” Callaway Europe’s e-commerce performance beat expectations in 2014 by over 20 percent.
The mid-tier channel bounced back with Grand Slam a particularly strong performer at Kohl’s. Said Feldenkreis, “Consumers are responding very positively to the new technology in our products – a hallmark for PEI golf. This has led to great success for our Air Flux and Motion Flux product lines.”
A new design aesthetic was launched in the quarter for the Jack Nicklaus brand, ”which improved the performance very well.” Distribution of Jack Nicklaus was expanded to additional department stores and an extension into tailored clothing holds “tremendous opportunity.”
Finally, Ben Hogan saw another consecutive year of double-digit growth and is now in more than 4,200 Wal-Mart doors worldwide. Ben Hogan golf clubs were launched through a licensing partnership.
In its swim business, the big news was the signing of an extension of its swim license with Nike in North America. The new agreement also expanded the scope of the license into certain countries within Europe, Central and South America
Feldenkreis said he expects Perry Ellis will be able to bring Nike Swim to areas such as Europe by the second half of 2016. He added, “This will become another growth driver. This expanding platform will allow us to create new relationships, and should help increase our presence, not only in the UK, but in the entire continent.”
The company did not detail the quarterly performance of its swim segment, which also includes Jantzen and Jag.
Companywide, revenue for the fourth quarter inched up 0.7 percent to $217.7 million. As previously disclosed, revenues were adversely impacted by disruption at the West Coast ports.
Perry Ellis reported a net loss of $42.9 million, or $2.90 a share, in the fourth quarter, impacted by a tax valuation allowance against the company's U.S. deferred tax assets. Results were impacted by the West Coast ports congestion that also contributed to the valuation reserve. On an adjusted basis, earnings were 7 cents compared to 6 cents a year ago.
The company believes it will take another month or so until the West Coast ports are back to full normal operations. With inbound shipments redirected to the East Coast, Perry Ellis is now receiving approximately 15 percent of its goods through the West Coast ports as compared to 35 percent to 40 percent before the slowdown.
Perry Ellis reiterated its guidance for the year. It expects total revenues to be in the range of $925 to $935 million, which compares to $848.2 million. EPS is expected to range between $1.25 to $1.35 on an adjusted basis, which compares to 56 cents in 2014.
