Perry Ellis International Reports Third Quarter Fiscal 2012 Results
• Total revenues increased 23% to $248.4 million compared to $201.3 million in the prior year period.
• Appoints Carmine Petruzello as President and Doug Jakubowski as Chief Merchandising Officer of the Perry Ellis division
• Updates Fiscal 2012 Guidance
• The Company seeks to further elevate its namesake Perry Ellis brand with strategic investments in both domestic and international markets.
Perry Ellis International, Inc. (NASDAQ:PERY) today reported results for the third quarter and nine months ended October 29, 2011. For the three months ended October 29, 2011 (“third quarter of fiscal 2012”), total revenues were $248.4 million a 23% increase compared to $201.3 million reported in the third quarter ended October 30, 2010 (“third quarter of fiscal 2011”). Rafaella contributed approximately $38.4 million in revenue while all other businesses delivered core organic growth of 5%. Net income attributable to Perry Ellis International, Inc. for the third quarter was $6.5 million, or $0.40 per fully diluted share (“EPS”), compared to $7.2 million or $0.51 per share in the third quarter of fiscal 2011.
Strong sales results in the Company’s golf, Hispanic, accessories, women’s contemporary dress, and direct-to-consumer businesses were offset by approximately $5.0 million of unshipped product associated with Rafaella and the Company’s European business due to weather issues.
In addition, unusually high levels of promotional activity in women’s better sportswear and product assortment challenges for both Rafaella and Perry Ellis Collection, led to increased markdowns for both businesses during the months of October and into November compared to the third quarter of fiscal 2011 and the first half of fiscal 2012.
SG&A expense increased 21% compared to the third quarter of fiscal 2011, to $66.4 million. As a percent of total revenue SG&A declined 50 basis points to 26.7%. Throughout the third quarter, the Company continued to invest in its brands and businesses such as Perry Ellis and direct-to-consumer, with additional investment in areas such as marketing, full price retail store openings, retail specialists, and the management team. The Company also incurred additional business development expenditures related to both domestic and international opportunities that impacted the quarter. These investments added approximately 140 basis points of SG&A to total revenue during the quarter.
Oscar Feldenkreis, President & COO commented “Our goal for the Perry Ellis brand has been to expand its domestic focus in product offering, performance, and distribution. We recently hired a president as well as a chief merchant for the brand and both have a proven track record with deep industry experience. We have opened two full-price flagship stores in California to showcase the full product line as well as carry “premium” Perry Ellis Collection apparel that will also be available in select department store doors. Perry Ellis is at an inflection point and further enhancing the brand’s positioning through investments in management, marketing, and retail support will be required in order to expand the brand both domestically as well as on a global scale.”
“We are pleased with the Rafaella women’s product assortment for next spring and summer. We accelerated their transition onto the Company’s enterprise resource planning system at the end of the quarter. We believe the planning and merchandising capabilities of our systems will provide the ability to execute by assortment plans translating from the showroom to the retail floor driving improved results,” continued Mr. Feldenkreis.