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Perry Ellis' Original Penguin Brand, Others Perform Well

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Perry Ellis' Original Penguin Brand, Others Perform Well
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Perry Ellis International, Inc. (NASDAQ: 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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Improved product and central infrastructure/sourcing efficiencies led to a 180 bps y/y improvement in the company’s 1Q consolidated gross margins.

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.

Latest Ratings for PERY

DateFirmActionFromTo
Mar 2017WunderlichReiteratesBuy
Jun 2016Brean CapitalAssumesBuy
Jun 2016Sidoti & Co.Initiates Coverage onBuy

View More Analyst Ratings for PERY
View the Latest Analyst Ratings

Posted-In: Eric Beder WunderlichAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga

 

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