Perry Ellis' Original Penguin Brand, Others Perform Well

Perry Ellis International, Inc. PERY raised its FY17 adjusted EPS guidance from $1.90-$1.95 to $1.95-$2.00. Wunderlich’s Eric Beder maintained a Buy rating for the company, with a price target of $35, saying Perry Ellis remained well positioned within the perpetually shifting consumer retail market to achieve significant growth.

Robust F1Q17 Performance

Perry Ellis’ robust 1Q performance was driven by its core brand performance and margin gains.

Although the company’s total revenues declined by 2 percent, organic growth from the company's core segments [Perry Ellis, Original Penguin, and Golf / Active] nearly offset the negative impact of planned ancillary business exits and off-price channel program sale reductions, analyst Eric Beder noted.

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The performance of the Perry Ellis brand continued to be strong and grew by a mid-single-digit rate, with a greater emphasis on “expedited fashion and collection turnover, and product innovation.” Beder believes the recent launch of Perry Ellis America in select European locations will offer meaningful global brand expansion and potential.

The global performance of the Original Penguin brand grew double-digits, aided by +20 percent growth contribution from the segment’s domestic wholesale channel.

Significant advances by the brand's mobile channel, as well as a robust licensing pipeline ensure that the Original Penguin brand remains one of the most well positioned within the Perry Ellis brand portfolio, the analyst commented.

Apart from the two flagship brands, Perry Ellis’ other brands also reported a solid performance. The company's Golf segment realized growth of 3 percent y/y, while women's Rafaella line saw double-digit department store channel based growth.