Perry Ellis International reported its golf apparel segment’s revenues grew 14 percent in the second quarter, led by Callaway and Ben Hogan.
The gains came despite an 8 percent decrease on inventory. Said Oscar Feldenkreis, vice chairman, president and COO, on a conference call with analysts, “Our unique industry-leading portfolio of golf brands continued to capture additional market share.”
The segment also includes Grand Slam, PGA TOUR, Champions Tour and the recently-launched Jack Nicklaus line.
Feldenkreis addressed the challenges facing the category noticed by steep quarterly declines being reported by Adidas TaylorMade-Golf and Dick’s Sporting Goods significant retrenchment of the category. Feldenkreis said that golf apparel and non-green grass channels, which represents the majority of its golf segment’s sales, “continues to be positive. So while the broader golf market, including hard goods and green grass sales, are reported down in total, the channels and categories that we participate are in healthy, and we are growing and taking market share.”
He said the strong performance partly reflects the evolution of golf performance apparel to become “a staple of a man's wardrobe,” replacing traditional sportswear attire.
Feldenkreis highlighted the performance of Ben Hogan Golf, an exclusive at Walmart which delivered 14 percent comps in the US with a strong response to a Father’s Day advertising push. In Canada, Ben Hogan Golf closed its first season above plan and ahead 8 percent. Ben Hogan Walmart UK will be partnering with Walmart UK for holiday.
Callaway Golf saw another quarter of double-digit growth in continuing the gain market share. Said Feldenkreis, “European Callaway bookings for the fall 2014 collections are solid, and the reception of our spring 2015 collection is excellent. In addition, Callaway's golf professional apparel ambassadors have collectively won eight tournaments this year, more than any other competing brand.”
He said the golf segment specifically continues to benefit from Perry Ellis’ ability to deliver fashion with performance-enhancing fabrications. Performance Cotton will be introduced across all of its golf lifestyle brands in the third quarter. Said Feldenkreis, “We have enhanced all of our golf lifestyle brands, which will excite and create a lifestyle needed for the consumer to replenish his wardrobe.”
Callaway, PGA Tour, Ben Hogan as well as the addition of the Jack Nicklaus license are expected drive growth in the golf category this year.
Nike Swim delivered a 38 percent jump in revenues in the quarter, albeit it’s a smaller quarter for the swim category.
“Women's performance drove our growth with particular strength in department and specialty stores, as well as our team business,” said Feldenkreis. “Nike Swim innovative product development continues to drive sales. The brand's new Elite suit has been well received by top swimmers, and it is selling well ahead of our expectations.”
The fashion swim category, which includes Jantzen and Jag, is also seeing “momentum” with a strong swim show wrapped up in Miami last month. Said Feldenkreis, “Many of our top customers reviewed our offerings for next spring where we received a very positive reaction on this line and are currently in the mix of booking for next season.”
Companywide, Perry Ellis reported a loss of $1.6 million, or 11 cents a share, in the quarter compared with a loss of $2.8 million, or 19 cents, a year earlier. Excluding special items, the company reported a loss of 8 cents a share, compared with a loss of 15 cents a year earlier, and exceeded its guidance by 2 cents.
Revenue fell 3.9 percent to $203.5 million. Declines in Perry Ellis as well as its Rafaella and Laundry women’s sportswear brands offset gains in its golf segment and Original Penguin.
The company said it would continue its strategic review of the company's portfolio of brands and plans to exit noncore, low-growth brands and businesses. In the sports-related space, other brands include Pro Player, the fan apparel brand; as well as Gotcha, MCD, and Redsand in the action sports space.
