COO: Perry Ellis International bullish about FY09
Perry Ellis International, Inc. (Nasdaq: PERY) COO Oscar Feldenkreis said despite lowered guidance, the clothing maker expects a “solid” fourth quarter. Feldenkreis made the comments during a midday conference call.
“We are convinced that our strategy and business platforms will keep producing strong results,” Feldenkreis said. “We are bullish about our prospects for a phenomenal fiscal 2009 and remain confident that the investments that we are making this year will allow us to keep outpacing the industry’s overall growth rate.”
Citing warm fall weather, high fuel prices and a Christmas season expected to be weaker than normal, Perry Ellis lowered its fiscal 2008 earnings guidance 5% to a range of $1.78 to $1.82, from a previous range of $1.87 to $1.91. Fiscal 2008 revenue is expected to be in the range of $870 million to $880 million, from a previously projected range of $900 million to $910 million.
“We have taken a conservative approach in reducing our revenue projection because some of our bottom replenishment programs have been projected down by retailer’s concern about a slowdown and the possibility of a more promotional Christmas season,” CEO George Feldenkreis said.
Before the opening bell, Perry Ellis posted third-quarter revenue of $227.5 million, on par with analyst expectations of $227.8 million and up 7% from $213.2 million a year earlier. The firm’s quarterly net income grew to $8.5 million, or $0.55 per share, slightly beating Wall Street projections of $0.54 per share and compared with $8.2 million, or $0.53 per share, during the year-ago period.
“As diversified as our portfolio is, we are not immune to the deterioration of the current macroeconomic environment and the consequences of unusually warm fall weather to the entire apparel industry,” the chief operating officer said. “We are taking all necessary steps to minimize the impacts. As such, we believe it is prudent to take a conservative approach when planning this business for the remainder of the year.”
Perry Ellis’ third-quarter operating expenses increased to $59.6 million, from $54.6 million. The company said investment in the company’s retail and active sports divisions, start-up expenses for its boys’ wear segment and increased technology costs drove the quarterly rise in expenses.
Gross profit during the three months ended October 31 totaled $76.9 million, from $72.5 million during the same period of 2006. Strong sales from the firm’s golf and active sports segments, direct retail and Perry Ellis branded-clothing helped drive revenue, the company said.
At the end of the third quarter, Perry Ellis’ long-term debt decreased to $198.3 million, from $159.7 million at the beginning of the fiscal year.
CEO George Feldenkreis told an analyst that there are “a lot” of acquisition opportunities.
“We are looking at them and we have already stated that when we find something that fits our policy, we will make an acquisition,” the chief executive said. “At this point, we almost have our full line of $175 million available to us. So, we will make acquisitions.”
In midday trading, PERY shares are down 3.56%, or $0.63, at $17.07. Over the last 52 weeks, shares have ranged from $16.73 to $35.22.
