Perry Ellis International Reports Preliminary Fourth Quarter
The announcement of the Company's preliminary results was necessitated by the disruption at the West Coast ports
Perry Ellis International, Inc. announced that based on its preliminary results for the fourth quarter and full year, the Company is providing preliminary fourth quarter results and expected results for the 2015 fiscal year ended January 31, 2015. The announcement of the Company’s preliminary results was necessitated by the disruption at the West Coast ports, which caused shipments, originally intended for the fourth quarter to be received too late or post year end, thereby impacting sales. The Company expects to report fourth quarter and fiscal year 2015 results the week of March 30, 2015.
Oscar Feldenkreis, Vice Chairman, President and Chief Operating Officer, Perry Ellis commented,«Our brands and businesses performed well during the fourth quarter, which resulted in positive comparable store sales in our direct-to-consumer business with comparable gross margins increased by 11 percent.The Company also saw solid performance in its brands across its retail customers enabling it to meet its profit goals and to reduce markdown assistance from prior year. We are equally encouraged as we transition into spring selling. The benefit of this solid performance was negatively impacted by prolonged port delays and foreign currency exchange. Like companies across industries, we are taking action to overcome the challenges presented by the West Coast ports situation. We have expanded our East Coast logistics pipeline in an effort to improve receipts and the delivery of goods to our retail partners».
He continued, «During the quarter we executed several new licensing agreements. We remain very pleased with the strategic initiatives that we have put into place allowing us to focus on our most profitable businesses and to drive expansion in gross and operating margins».
For the fourth quarter ended January 31, 2015:
- The Company expects total revenue to be approximately $218 million versus $216 million in the comparable prior year ended February 2, 2014 («fourth quarter of fiscal 2015»). Adjusted diluted earnings per share («EPS») are currently expected in the range of $0.01 to $0.04.
- The Company noted that it had a solid order base, but was unable to fill $23 million in sales orders due to late receipt of goods in fiscal 2015 resulting from port delays that have caused in excess of a two week lag in delivering shipments to customers. The Company has delivered these goods, however like many other companies, it does anticipate potential continued disruption in shipments and higher costs associated with continued port delays as noted across news outlets.
- The Company’s retail stores and e-commerce business performed well posting a 1% and 36% sales comp increase, respectively. And equally important, direct-to-consumer comparable gross margins increased 11% due to higher average retail selling prices.
For the 2015 fiscal year ended January 31, 2015:
- Fiscal 2015 revenue is expected to approximate $890 million, as compared to $912 million in fiscal 2014.
Adjusted diluted (EPS) are expected in the range of $.50 to $.53 for fiscal year 2015.
- Adjusted earnings per fully diluted share for fourth quarter and fiscal year 2015 and fiscal 2014 exclude costs associated with; (i) the exit of underperforming brands and businesses; (ii) the streamlining and consolidating of operations; (iii) strategic initiatives and gains from assets sales; (iv) impairment on long lived assets and certain leasehold improvements; and (v) potential deferred tax asset valuation reserve.
- The Company is also reviewing its deferred tax asset balance totaling $48 million for valuation in conjunction with its future domestic taxable position and the realizability of the asset.
- The Company also noted that the stronger US dollar impacted its foreign currency exchange by approximately $1.8 million for the year or ($0.08) per share.
The Company is entering fiscal 2016 in a position of strength seeing strong selling trends across many of its brands and products.In fiscal 2016, the Company is focused on key businesses that are poised for expansion and accelerated growth. The Company continues to focus on the following initiatives:
- Delivering exceptional product with innovation and differentiation, key priorities across its global growth brands.
- Accelerating International expansion, both direct and through licensing arrangements.
- Maintaining an efficient infrastructure that provides a platform for growth and leveragability across its businesses.
- Continued reduction of expenses and exiting underperforming businesses.
The Company expects total revenues to be in a range of $925 to $935 million for fiscal 2016. Gross margins for fiscal 2016 should expand 50 to 60 basis points to a range of 34.5% to 34.6%. The Company expects adjusted EBITDA to fall in a range of $55 to $58 million or 6% to 6.25%. The Company guidance includes the impact of continued disruption of shipments driven by the West Coast port situation as well as foreign currency exchange headwinds.
The Company noted that its revenue and adjusted earnings per share expectations are preliminary and subject to quarter and year-end closing adjustments. As the Company has not completed its quarter and year-end fiscal close or the audit of its 2015 financial statements, the revenue and profit expectations presented in this press release may change.
Perry Ellis International, Inc (Nasdaq:PERY) is a leading designer, distributor and licensor of a broad line of high quality men’s and women’s apparel, accessories and fragrances. The Company’s collection of dress and casual shirts, golf sportswear, sweaters, dress pants, casual pants and shorts, jeans wear, active wear, dresses and men’s and women’s swimwear is available through all major levels of retail distribution.