Perry Ellis International, Inc.
PERY announced today, that based on its preliminary results for the
fourth quarter and full year, the Company is providing fourth quarter guidance
and updating its expectations for the 2014 fiscal year ended February 1, 2014.
The Company expects to report actual fourth quarter and fiscal year 2014
results the week of April 7, 2014.
For the fourth quarter ended February 1, 2014:
* The Company currently expects total revenue to decline 16% to
approximately $216 million versus $258 million in the comparable prior
year period ended February 2, 2013 ("fourth quarter of fiscal 2013").
* Adjusted diluted earnings per share ("EPS") are currently expected in the
range of $0.02 to $0.05.
For the 2014 fiscal year ended February 1, 2014:
* Fiscal 2014 revenue is expected to approximate $912 million, as compared
to $970 million in fiscal 2013.
* Adjusted diluted (EPS) are expected in the range of $.34 to $.37 for
fiscal year 2014.
* Adjusted earnings per fully diluted share for fourth quarter and fiscal
year 2014 and fiscal 2013 exclude costs associated with; (i) the exit of
underperforming brands and businesses; (ii) the voluntary retirement
program; (iii) the streamlining and consolidating of operations; (iv)
strategic initiatives and gains from assets sales; and (v) impairment on
long lived assets and certain leasehold improvements.
* 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 2013 financial statements, the revenue
and profit expectations presented in this press release may change.
The Company noted that its fourth quarter performance was impacted by
inclement weather across major parts of the country coupled with a challenging
consumer spending environment across its channels of distribution. In its
direct-to-consumer channel, lower mall traffic contributed to a comparable
store sales decline of 4.8%. On the wholesale side, the Company was negatively
impacted by the customer flow of replenishment orders which was essentially
turned off for many retailers in their effort to manage overall store
inventories. In addition, many retailers delayed shipments of merchandise
planned for January delivery to the first quarter of fiscal 2015.
"We are extremely disappointed with our fourth quarter and full year results.
We experienced a very difficult environment, which required our customers to
become more aggressive with promotions and limit new orders. This contributed
to much lower sales versus our projections," said Oscar Feldenkreis, president
and chief operating officer of Perry Ellis International. "We expect our
customers to remain cautious and have adjusted our expectations for initial
delivery and replenishment orders in fiscal 2015."
Other Fourth Quarter 2014 Highlights:
o Revenue growth was noted in Original Penguin and Nike performance swim as
well as in the international and licensing businesses.
o Gross margins expanded 170 bps for the quarter driven by a higher
contribution from licensing revenues and higher margins in the Golf
apparel and Rafaella sportswear business.
Fiscal 2015 Outlook
In light of the uncertainty of the retail environment, the Company has
executed an infrastructure rationalization to achieve the following goals:
1) To enable it to be more streamlined in the channels it currently serves,
2) To redeploy resources to the businesses poised for more significant growth,
3) To dedicate investment into new businesses, such as international expansion
under the Original Penguin and Perry Ellis brands, as well as the expansion of
golf lifestyle apparel throughout Europe lead by Callaway golf.
The Company expects total revenues to be in a range of $910 to $920 million
for fiscal 2015. Gross margins for fiscal 2015 should expand 50 to 60 basis
points to a range of 33.7% to 33.8%. The Company expects that the
infrastructure rationalization will deliver a net savings after the
reinvestment of approximately 1% in operating margin on a full year annualized
basis.
The Company also announced the election of Alexandra Wilkis Wilson, co-founder
of online shopping website Gilt to the Board effective February 20, 2014.
The Company will provide a full update on the review at its year-end
conference call. The Company also noted that it has approximately $17 million
remaining under its share repurchase program.
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