Perry Ellis International, Inc. indicated a shipment delay in part resulted in fourth-quarter results coming in below expectations.
For the fourth quarter ended Feb. 2, 2013:
- The company
currently expects total revenue to increase 13 percent to approximately
$258 million versus $229 million in the comparable prior year period
ended January 28, 2012 (“fourth quarter of fiscal 2012”).
- Adjusted diluted earnings per share are currently expected in the range of $0.48 to $0.50.
- Analysts predicted profit of 84 cents per share on $280 million in revenue.
For the 2013 fiscal year ended Feb. 2, 2013:
- Fiscal 2013 revenue is expected to approximate $970 million, as compared to $981 million in fiscal 2012.
- Adjusted diluted earnings per share (“EPS”) are expected in the range of $1.43 to $1.45 for fiscal year 2013.
- Adjusted earnings per fully diluted share exclude costs associated
with; (i) the exit of underperforming brands and businesses; (ii) the
voluntary retirement program; (iii) the streamlining and consolidating
of operations; (iv) strategic initiatives and gains from assets sales;
and (v) impairment on long lived assets and certain leasehold
- Analysts expect profit of $2.07 per share on $1.05 billion in revenue.
The company noted approximately $14.5 million in planned wholesale shipments shifted from the fourth quarter of fiscal 2013 to the first quarter of fiscal 2014 thus impacting both fourth quarter and fiscal 2013 revenue. These shipments were completed during the first 10 days of fiscal 2014 and resulted from retailers delaying receipts until the following fiscal quarter, as well as late receipts of production. The company does not believe this delay will impact its spring selling season. This shift is expected to continue and is therefore planned in our fiscal quarters for 2014.
“We were quite pleased with our holiday season, despite the headwinds which faced the entire retail industry from numerous factors including Hurricane Sandy, economic and political uncertainties, unseasonal climate, and challenging promotional strategies,” said Oscar Feldenkreis, president and chief operating officer of Perry Ellis International. “We executed on our strategies for our core businesses and generated solid results. Our Perry Ellis collection and Rafaella sportswear collection businesses delivered greatly improved product offerings. We experienced reduced promotional sales and stronger gross margins from a year earlier. We believe that these businesses look even stronger for the spring/summer season just beginning.”
Other Fourth Quarter 2013 Highlights:
- Revenue growth was driven by increases in Golf apparel, Perry Ellis branded products, Laundry by Shelli Segal, Direct to Consumer and International sales;
- Gross margins are expected to expand, as a result of improved product performance within its men’s and women’s sportswear collections; and
- The company maintained its disciplined management of expenses.
In addition at year end the company expects:
- Cash to approximate $55 million; and
- Total inventory to approximate $183 million, an 8 percent decrease, compared to $198 million in the comparable prior year period despite carrying inventory that shifted into the first quarter of fiscal 2014.
During the fourth quarter of fiscal 2013, the company entered into a sales agreement for its John Henry trademark in international territories in Asia. This sale will result in pre-tax income of approximately $6.3 million or after tax earnings per share of approximately $0.21. This transaction is expected to close in the first quarter 2014. The company plans to continue executing on the domestic strategy of the John Henry brand as a modern lifestyle resource to select retailers as well as its licensing relationships in Latin America.
Fiscal 2014 Outlook
George Feldenkreis, chairman and chief executive officer of Perry Ellis International, commented: “We are very optimistic as the steps we took during fiscal 2013 to strengthen our management and creative teams delivered solid product offerings in Perry Ellis and Rafaella sportswear collections during the holiday period. We feel that we have the platforms in place to continue our improvement and build even stronger collections in forward seasons. As a result, we expect continued expansion in gross margin in future years.”
Feldenkreis continued, “I believe that our core business competencies will benefit from our solid balance sheet to support future growth as we pursue expansion opportunities domestically and internationally.”
For its initial outlook for fiscal 2014, the company expects revenues to increase 3 percent – 5 percent. Gross margins are expected to expand by over 100 bps from 2013. SG&A as a percent of sales is expected to increase with this ratio expected to improve as revenue growth increases above 5 percent. Initial adjusted diluted earnings per share are expected to range from $1.50 to $1.60. This guidance range excludes costs associated with the exit of underperforming brands and businesses, the streamlining and consolidating of operations and strategic initiatives and impact from assets sales.
The company expects to report actual fourth quarter and fiscal year 2013 results the week of March 18, 2013.
The company, through its wholly owned subsidiaries, owns a portfolio of nationally and internationally recognized brands, including: Perry Ellis(R), Jantzen(R), Laundry by Shelli Segal(R), C&C California(R), Rafaella(R), Cubavera(R), Ben Hogan(R), Centro(R), Solero(R), Munsingwear(R), Savane(R), Original Penguin(R) by Munsingwear(R), Grand Slam(R), Natural Issue(R), Pro Player(R), the Havanera Co.(R), Axis(R), Gotcha(R), Girl Star(R), MCD(R), John Henry(R), Mondo di Marco(R), Redsand(R), Manhattan(R), Axist(R), Farah(R), Anchor Blue(R) and Miller’s Outpost(R). The Company enhances its roster of brands by licensing trademarks from third parties, including: Nike(R) and Jag(R) for swimwear, and Callaway(R), PGA TOUR(R) and Champions Tour(R) for golf apparel.