Perry Ellis International's Q2 sales decreased 17.8% to $159.2 million, driven by declines in swimwear weakness at department stores, a planned reduction in its private label pants programs at Wal-Mart, the discontinuance of licenses for PING golf apparel and Dockers outerwear, and the impact of retail bankruptcies.
The declines offset continued strong performance at mid-tier retailers across its modern, golf and Hispanic lifestyles; the combined growth in golf lifestyle brands, and the successful introduction of the Merona swim program.
On a conference call with analyts, company CEO George Feldenkreis said the PGA Tour, Grand Slam, Champions Tour and Links Edition lines each continue to gain market share. Collectively, the brands will be available in 3,431 doors this fall versus 2,951 a year ago. Bloomingdale's, Lord & Taylor, Bealls and Dillard's have all committed to carry the new Callaway apparel line for spring 2010.
Unseasonably cold weather hurt swimwear shipments in the quarter but Feldenkreis said the company continues to gain share in swim as retailers partner with larger suppliers. Coverups also remains a strong growth opportunity in swim. Nike Swim has seen “extremely positive results” from the testing of new product lines while Jantzen will see a 21% increase in penetration at department stores this fall, to reach 1,100 doors.
Feldenkreis characterized its action sports segment – Redsand, Gotcha, and MCD among its underperforming areas.
The Miami apparel company slightly narrowed its loss for the quarter ending Aug. 1 to $5.3 million, or 42 cents a share, from $5.4 million, or 36 cents per share, in the year-ago period. Results easily topped Wall Street's consensus estimate of 57 cents. Based on positive order trends, Perry Ellis estimates it will earn between 70 cents and 85 cents this year, which compares with an 89 cents loss in 2009. Total revenues are expected to decrease in the low-double-digits.
