Perry Ellis International, Inc., major maker of golf apparel and swimwear, reported total revenues were $265.5 million in the first quarter ended April 28 compared to $288.3 million reported in the first quarter of fiscal 2012.
“We are pleased with the results we achieved in the first quarter of fiscal 2013,” said Oscar Feldenkreis, president and chief operating officer. “During the quarter, we made considerable progress toward revitalizing our core brand performance. By implementing major enhancements, we have positioned our Perry Ellis & Rafaella sportswear collections for improved performance in the fall and holiday seasons. While we will maintain a conservative approach to our business, we believe our actions are moving our business in the right direction.”
Gross margin for the first quarter of fiscal 2013 was 33.0 percent, down 60 points from the comparable prior year period. For the quarter gross margin was impacted by 30 basis points due to inventory associated with exited businesses throughout fiscal 2013.
Selling, general, and administrative (“SG&A”) expenses for the first quarter of fiscal 2013 increased $2.9 million to $66.3 million compared to $63.4 million in the comparable prior year period. The increase was primarily associated with the expansion of the company's direct to consumer business in the second half of fiscal 2012 and expenses totaling approximately $800 thousand dollars for costs related to exited brands and business process improvements in the first quarter of fiscal 2013.
Net income for the first quarter of fiscal 2013 was $9.7 million, or 64 cents per fully diluted share (“EPS”), compared to $15.4 million, or 99 cents per fully diluted share in the comparable prior year period.
Diluted EPS, as adjusted for the first quarter of fiscal 2013 was 71 cents compared to EPS per fully diluted share as adjusted of $1.08 in the comparable prior year period. EPS, as adjusted excludes costs for exited brands and distribution center relocation totaling $1.5 million during the first quarter of fiscal 2013.
Earnings before interest, taxes, depreciation, amortization, costs on early extinguishment of debt and costs on exited brands and distribution center relocation (“Adjusted EBITDA”) for the first quarter of fiscal 2013 totaled $22.9 million, or 8.6 percent of total revenue compared to EBITDA of $33.6 million in the comparable prior year period.
Balance Sheet Update
“In an ever changing consumer environment, we are managing Perry Ellis International to maintain strong liquidity with a solid balance sheet and strong positioning of our brands,” George Feldenkreis, chairman and CEO of Perry Ellis International. “Companies such as ours – that are managed conservatively and focused on efficiency — are better positioned to take full advantage of all opportunities that arise.”
Focus and discipline in working capital management along with strong retail planning allowed the company to reduce its inventory position by 7 percent to $167.2 million compared to $179.3 million at April 30, 2011 and by 16 percent as compared to $198.3 million at January 28, 2011. The company's net debt to total capital totaled 31.0 percent as of April 28, 2012.
Accounts receivable decreased 4.0 percent to $175.2 million compared to $182.5 million at April 30, 2011.
Fiscal 2013 Guidance
The company reaffirmed that for the twelve months ending Feb. 2, 2013 (“fiscal 2013”) it anticipates revenue to be in a range of $990 million to $1.0 billion after exiting certain businesses.
The company also anticipates adjusted fully diluted EPS to be in a range of $1.95 – $2.00. On a GAAP basis, the company's diluted EPS is expected to be in a range of $1.85 – $1.90.
