Perry Ellis International Inc expects to report fourth-quarter earnings that will meet or beat analysts' average estimate of 61 cents per share. The company also said that while the first half of its current fiscal year, which began Feb. 1, will be challenging, “current bookings and initial readings indicate that this year's first half should be at least equal, if not better, than the first half of last year.”
Perry Ellis expects to report fourth-quarter revenue of $212 million, down from $231.6 million in the year-ago quarter. This decrease includes the exit of bottoms private label programs at mass merchants, as well as the anticipated reduction of bottoms replenishment programs at mid-tier retailers.
For the full year ended Jan. 31, it expects to report earnings per share of $1.78 to $1.81, compared to $1.45 a year ago. Revenues are expected to rise 4% to $864 million, compared to $830 million.
Last year's pro forma results exclude the impact of $3 million in debt extinguishment costs ($1.9 million net of taxes or 13 cents a share) incurred as a result of the March 2006 prepayment of the company's $57 million senior secured notes.
Perry Ellis said it ended Fiscal 2008 in a very strong financial position. Working capital requirements were significantly reduced, with inventories down to approximately $135 million compared to $139.7 million in January 31, 2007, and accounts receivables reduced to approximately $138 million compared to $157.1 million at the end of Fiscal 2007. Strong cash flows also allowed the company to completely pay-off its credit facility as of January 31, 2008.
“Our strategy of reducing exposure to low margin businesses and in particular, private label is key for Perry Ellis Internationals long term success,” said Oscar Feldenkreis, president and COO. “We are committed to increasing the allocation of resources to our growth platforms Perry Ellis Collection, Golf, Hispanic, Swim, Retail and now Contemporary. These businesses carry better margins and have been performing at or above plan, leading to sustained growth in revenue and earnings.”
“We recognize that the first half of Fiscal 2009 will be challenging, however, current bookings and initial readings indicate that this years first half should be at least equal, if not better than first half of last year. We will provide full guidance during our March 18th release call,” Feldenkreis concluded.