Perry Ellis Slips To Loss In Q4, Adj. EPS Tops View, Backs FY15 Revenue Forecast

(RTTNews) - Perry Ellis International, Inc. (PERY), a distributor of apparel, accessories and fragrances, Thursday reported a loss for the fourth quarter, compared to a profit last year, hit by hefty non-cash write down as well as lower revenues. Adjusted earnings, however, topped analysts' estimates. Further, the company issued earnings forecast for fiscal 2015, and maintained revenue view.

Net loss for the quarter was $28.25 million or $1.91 per share, compared to profit of $4.39 million or $0.28 per share last year. The latest results included a $42.9 million or $1.94 per share non-cash write down of certain intangible assets, primarily trade names, goodwill and certain store leaseholds, resulted from the firm's internal review of non-core brands and businesses.

Adjusted net income, which excluded items, was $852 thousand or $0.06 per share while it totaled $7.70 million or $0.50 last year. On average, 6 analysts polled by Thomson Reuters expected earnings of $0.03 per share. Analysts estimates typically exclude special items.

Total revenues declined 16 percent to $216.08 million from $258.35 million in the prior year. Analysts expected revenues of $216.24 million.

Revenues were hurt by inclement weather country wide as well as a cautious consumer. As a result, the company saw a lack of replenishment orders across many of the business platforms.

Net sales declined to $207.90 million from last year's $251.02 million, while the company experienced growth in royalty income.

During the quarter, gross margins expanded to 34.3 percent from 32.6 percent in the prior year, reflecting a lower level of promotions in Rafaella and Perry Ellis collections businesses as well as higher contributions from the golf lifestyle, international and licensing businesses.

For fiscal 2014, net loss was $22.8 million or $1.52 per share, compared to net income of $14.8 million or $0.97 per share a year ago. Adjusted earnings per share were $0.38. Fiscal 2014 revenues were $912 million, lower than prior year's $970 million.

Oscar Feldenkreis, president and chief operating officer, said, "We were disappointed with the results of fiscal 2014. The year saw significant challenges, with unseasonal weather, consumer indifference to apparel, and declines in mall and outlet center traffic all negatively impacting our business. We also experienced a fundamental shift in the business model favoring national brands over private and exclusive brands, thereby impacting revenues and near term profitability."

Looking ahead for fiscal 2015, the company expects adjusted earnings per share in a range of $0.75 to $0.90. Further, the company continues to expect total revenues in a range of $910 million to $920 million. Analysts look for earnings of $0.85 per share on revenues of $919.23 million.

Gross margins for the year should expand 50 to 60 basis points to a range of 33.7 percent to 33.8 percent.

Perry Ellis shares closed Wednesday's trading at $14.25, up $0.45 or 3.26 percent. In pre-market activity, shares gained $0.02 or 0.14 percent further, and traded at $14.27.