Perry Ellis Shares Surge As Q1 Results Top Estimates, Boosts 2015 EPS Outlook

(RTTNews) - Apparel company Perry Ellis International, Inc. (PERY) reported Thursday a profit for the first quarter of fiscal 2015 that declined from last year, which was boosted by a gain on sale of long-lived assets.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also raised its earnings guidance for the full-year 2015, while maintaining annual revenue outlook.

Perry Ellis International is a leading licensor, designer and marketer of high quality menswear, including sport and dress shirts, golf sports-wear, sweaters, casual and dress pants and shorts to all levels of retail distribution.

"We were encouraged by the results of the quarter which were ahead of our expectations. Despite a slow start to the spring season, we experienced positive momentum beginning in April with particular strength in golf lifestyle apparel, Original Penguin as well as our Nike swim businesses," President and COO Oscar Feldenkreis said in a statement.

The Miami, Florida-based company reported net income of $7.78 million or $0.52 per share for the first quarter, lower than $11.32 million or $0.74 per share in the prior-year quarter, which primarily included $0.22 per share of gain on the sale of the John Henry trademark in certain international territories in Asia.

Excluding items, adjusted net income for the quarter was $8.26 million or $0.55 per share, compared to $9.53 million or $0.62 per share in the year-ago quarter.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter decreased 2 percent to $257.31 million from $262.32 million in the same quarter last year, but topped four Wall Street analysts' consensus estimate of $233.65 million.

The company noted that the decline in revenues was primarily driven by planned exits of certain private and retailer exclusive branded programs, nearly offset by increases in golf lifestyle apparel, Nike swim and Original Penguin as well as stronger direct-to-consumer revenue results.

Net sales for the quarter were $249.92 million, down from $255.48 million in the prior-year quarter, while royalty income increased to $7.40 million from $6.84 million in the comparable quarter a year ago.

The company noted that solid performance in direct-to-consumer business resulted in a 5.6 percent comparable same store sales increase, driven by Perry Ellis as well as direct e-commerce, which posted a 43 percent sales growth.

Gross margin for the quarter improved 30 basis points to 34.1 percent, reflecting a favorable business mix as well as better sell-through at retail in Perry Ellis and Rafaella collection businesses.

The company noted that it continues to focus on the strategic infrastructure rationalization program, which includes a review of its processes and systems and initiatives aimed at streamlining its supply chain to realize greater efficiencies.

George Feldenkreis, chairman and chief executive officer stated, "We are quite pleased with the positive momentum in our businesses. We expect our expenses to continue to downtrend versus prior year over the next several quarters."

Looking ahead to fiscal 2015, the company raised ts adjusted earnings guidance to a range of $0.80 to $0.95 per share from the previously announced range of $0.75 to $0.90 per share, while continuing to project revenues between $910 million and $920 million.

Street is currently looking for full-year 2015 earnings of $0.84 per share on annual revenues of $918.14 million.

In Thursday's regular trading session, PERY is currently trading at $16.84, up $2.05 or 13.84% on a volume of 0.27 million shares.