Perry Ellis International Inc. reported healthy gains in its two sports segments, Golf Apparel and Nike Swim, in the first quarter.
Perry Ellis’ portfolio of golf brands including Callaway, PGA Tour, Champions Tour, Ben Hogan and Jack Nicklaus – grew mid-single digits in the period, despite the lingering cold weather throughout the quarter.
“Now that the weather has become more favorable, the vast majority of retail partners are reporting double-digit sell-throughs, increasing our spring season golf products,” said Oscar Feldenkreis, vice chairman, president and COO, on a conference call with analysts.
Callaway apparel’s direct-to-consumer platform nearly tripled while Callaway Europe expanded over 60 percent. Said Feldenkreis, “Both represent a fast-growing, profitable segment of our business.”
Ben Hogan, an exclusive at Wal-Mart, grew over 20 percent in the quarter and is expanding with Walmart in stores across Canada and Mexico. With Walmart taking over some former Target locations, Feldenkreis expects strong double-digit growth for Ben Hogan for spring 2016 in Canada.
Jack Nicklaus grew over 40 percent in the quarter with the brand reaching over 400 doors.
Feldenkreis overall sees a “further strengthening” of the golf business after recent meetings with store buyers.
“Consumers continue to respond positively to our new fabric development and infusion of technology across all of our golf product categories, including fabrics which stretch, new technology for bottoms that will be delivered in the fall season,” said Feldenkreis. “This combined with our very effective marketing avenues has brought our golf lifestyle development to a whole new level. Our brands have a unique authenticity with an avid golfer worldwide who recognize that they can enjoy the sport in any season with our product offering.”
Nike Swim delivered a 30 percent gain in the quarter. Said Feldenkreis, “Retailers are experiencing enthusiasm for the brand and have placed immediate reorders. Early previews of next season's product have been overwhelmingly positive and we're expecting both store and category expansions with our retail partners while expanding the brand internationally following last quarter's expansion of our partnership with Nike.”
As reported, Perry Ellis in March extended its licensing agreement for swimwear with Nike to also include Europe, Central and South America. Feldenkreis noted that Perry Ellis exited the elite portion of the Nike Swim business because it wasn’t profitable. Perry Ellis’ swimwear segment also includes Jag.
Companywide, Perry Ellis International raised its earnings guidance as wider margins led to better-than-expected first-quarter results. The firm’s other major labels include Perry Ellis, Original Penguin, Farah, Rafaella and Laundry by Shelli Segal.
Earnings in the quarter rose 21.0 percent to $9.4 million, or 62 cents a share. Excluding special items, per-share earnings were 99 cents, up from 55 cents a year earlier, and beating the 63 cents that analysts on average had expected. Revenues advanced 3.3 percent to $259.3 million.
For the year, Perry Ellis now expects EPS in the range of $1.68 to $1.75, up from its previous guidance of $1.45 to $1.55. It affirmed its previous revenue forecast.
