Perry Ellis International reported more modest gains in its golf apparel segment in the second quarter than recent quarters due to a slowdown in the mid-tier department store channel. But Nike Swim’s revenues were up over 40 percent as all channels and categories saw positive comps.
“Our department and mid-tier retail partners are putting a renewed emphasis on megabrands, such as Nike, and our Nike Swim line is benefiting greatly from it,” Oscar Feldenkreis, Perry Ellis’ president and COO, said on a conference call with analysts.
The sporting goods channel grew over 60 percent, representing almost 30 percent of Nike Swim's sales mix. Nike Swim's Internet sales more than doubled. Added Feldenkreis, “While currently a small portion of the brand's overall business, it represents a significant growth catalyst which we are actively investing in.”
For 2013, Perry Ellis’ Swim revenues are expected to increase in the mid-single-digit range to $83 million to $87 million, driven by the strength at Nike. Its other swim brands include Jantzen and Jag.
Golf apparel revenues were up 1 percent in the quarter, boosted by spring shipments from the launch of Ben Hogan at Walmart as well as expansion of its PGA Tour and Callaway brands into Mexico and Canada. These increases were offset by a reduction in shipments for Grand Slam, which is sold exclusively at Kohl’s, as overall sales in the mid-tier distribution channel “have slowed, and retailers are taking a more cautious position,” said Anita Britt, CFO.
Perry still expects to see increases in the mid-teens in golf this year. The segment also includes Top-Flite and Champions Tour.
Feldenkreis said Callaway is up over 50 percent for both the second quarter and first half, driven by the launch of its green grass programs as well as a “healthy” corporate business. Department store doors are also expanding, and a callawayapparel.com e-commerce site is set to launch this fall. Callaway women’s line is now in over 750 doors with shipments for the first half exceeding plan.
“Callaway men's continues to gain market share by balancing the market needs of a promotional core and fashion product categories,” said Feldenkreis. “We have seen solid growth in product categories extensions, such as big and tall growing sales by over 50 percent compared to last year.”
PGA Tour is launching in 460 Macy's doors this Fall while the PGA Tour’s women’s collection increased its door count 20 percent, reaching close to 600 doors. Added Feldenkreis about PGA Tour, “It is the strongest-performing brand within the moderate price pointed brand competition in ladies.”
For the Ben Hogan collection at Walmart, Father's Day sales were over 30 percent above plan. Walmart will expand the line to over 3,000 stores for 2014 from approximately 2,000 doors currently. New licenses are being planned for Ben Hogan. Ben Hogan golf accessories will also be launched this holiday season with accessories also being developed for its other golf brands.
Companywide, Perry Ellis’ losses slightly widened to $2.8 million, or 19 cents a share, from a loss of $2.4 million, or 17 cents, last year. Revenues revenue inched up 0.7 percent to $204.5 million, boosted by gains at Rafaella women's sportswear and Perry Ellis menswear, as well as Nike. Its other major brands include Original Penguin, C&C California, Cubavera and Laundry by Shelli Segal. Its other sports-related brands include Pro Player, MCD and Gotcha. The company maintained its guidance forecast for the year.