Perry Ellis Q2 Sales Boosted By TSI Acquisition

Perry Ellis International, Inc. reported record total revenues for the second quarter ended July 31, 2005 of $190 million compared to $126 million during the second quarter ended July 31, 2004. This represents an increase of $63.6 million, or 50.3%, compared to the second quarter of fiscal 2005. For the six months ended July 31, 2005, total revenue was $416 million compared to $324 million in the prior year, an increase of $92 million, or 28.4%, over the prior year period.

The company's second quarter revenue increase was driven by strong organic sales growth of 12% in the company's men's wholesale operations, as well as an increase of approximately $50 million due to the acquisition of the Tropical Sportswear International (TSI) business completed during the first quarter.

Due to seasonality, second quarter operations typically result in losses. The company reported improved results in the second quarter of this year, reporting a net loss of $2.4 million, or 25 cents per share, compared to a net loss of $2.6 million, or 29 cents per share for the comparable quarter of last year. For the first half ended July 31, 2005, Perry Ellis' net income was $6.5 million compared to $5.6 million in the prior year, a 16% increase over the same period last year. Earnings per diluted share for the six months ended July 31, 2005 were 65 cents compared to 59 cents per share during the first six months of last year, an improvement of 10%.

“Our improved second quarter results reflect the continued success of our brands and product offerings,” said George Feldenkreis, chairman and chief executive officer. “The TSI integration is progressing extremely well,” he continued. “We are receiving a positive retail reaction to our offerings and have retained all major TSI programs. We have consolidated our sales forces, achieved significant overhead reduction, and will complete the transition of all sourcing to a full package model during our third quarter.”

Mr. Feldenkreis added, “We are pleased that second quarter results showed improved operating margins, despite slightly lower margins in our menswear division as a result of increased end of spring season markdown settlements and higher interest costs. Although our first half results are slightly ahead of expectations, we continue to plan the balance of the year conservatively at $2.25 – $2.35 per share.”

Oscar Feldenkreis, vice-chairman, president, and COO of Perry Ellis International, commented on the company's multi-brand, multi-channel, multi-product category strategy. “Our brand portfolio continues to show strength across all distribution channels and with the success of the TSI acquisition we have solidified our position as a dress and casual pant supplier. During the second quarter we showed strong sales growth in multiple categories, including Perry Ellis, Original Penguin, and Cubavera, at luxury and department stores, Axist and PGA TOUR in the mid-tier channel, and private label increases in the mass channel. Our bottoms business also showed strength across all channels, reflecting our increasing importance as a bottoms provider.”

He concluded: “We continue to be excited by the long-term growth potential for multiple brands and categories including the potential for our international operations. In the spring of 2006 we will begin international distribution of Original Penguin into the European market.”

           PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
                  SELECTED FINANCIAL DATA (UNAUDITED)
           (amounts in 000's, except per share information)
INCOME STATEMENT DATA:
                                Three Months Ended  Six Months Ended
                                      July 31,           July 31,
                                ------------------- ------------------
                                  2005      2004      2005     2004
                                --------- --------- ------------------

Revenues
  Net sales                     $184,298  $121,049  $404,692 $313,153
  Royalty income                   5,686     5,317    10,892   10,632
                                --------- --------- -------- ---------
       Total revenues            189,984   126,366   415,584  323,785
Cost of sales                    136,146    88,499   288,819  223,115
                                --------- --------- -------- ---------
Gross profit                      53,838    37,867   126,765  100,670
Operating expenses
  Selling, general and
   administrative expenses        50,017    36,528   101,106   81,401
  Depreciation and amortization    2,223     1,534     4,463    3,039
                                --------- --------- -------- ---------
       Total operating expenses   52,240    38,062   105,569   84,440
                                --------- --------- -------- ---------
Operating income (loss)            1,598      (195)   21,196   16,230
Interest expense                   5,411     3,756    10,781    7,201
                                --------- --------- -------- ---------

Income (loss) before minority
 interest and income taxes        (3,813)   (3,951)   10,415    9,029
Minority interest                    125        95       368      154
Income tax provision (benefit)    (1,534)   (1,403)    3,560    3,313
                                --------- --------- -------- ---------
Net income (loss)                $(2,404)  $(2,643)   $6,487   $5,562
                                ========= ========= ======== =========

Net income (loss) per share
   Basic                          $(0.25)   $(0.29)    $0.68    $0.63
                                ========= ========= ======== =========
   Diluted                        $(0.25)   $(0.29)    $0.65    $0.59
                                ========= ========= ======== =========