Perry Ellis reports record Q2 earnings of $1.8 million
23 Aug '11
5 min read
Perry Ellis International Inc reported results for the second quarter ended July 30, 2011 ("second quarter of fiscal 2012").
Second Quarter Results from Operations For the second quarter of fiscal 2012, total revenues increased 33% to $214.4 million compared to $161.8 million in the comparable prior year period ended July 31, 2010 ("second quarter of fiscal 2011"). Strength within men's golf, women's dresses under Laundry by Shelli Segal, International in the U.K., and Mexico, and solid increases in direct to consumer drove an 18% increase in organic revenue for the quarter. In addition, the recently acquired Rafaella business contributed approximately $22.8 million in revenue for the second quarter of fiscal 2012.
Total gross profit for the quarter increased to $72.3 million compared to $58.2 million in the comparable prior year period. Gross margin was 33.7% for the quarter as compared to 36.0% last year. The planned gross margin decrease was due to the opportunistic revenue increases of lower gross margin program businesses, the conversion of the Perry Ellis dress shirts and small leather goods businesses from licensing to wholesale, the decrease of our higher margin licensing business as a percentage of total revenue mix, and the ladies business, including Rafaella. This decrease was partially off-set by higher gross margins in both direct to consumer and International. Furthermore, selling, general, and administrative expenses as a percentage of total revenues were 29.6% in the second quarter of fiscal 2012 compared to 32.9% in the comparable prior year period, a 330 basis point improvement reflecting leverage of corporate services.
"Expansion of our core businesses and the addition of Rafaella women's sportswear resulted in a strong profit for the second quarter. We believe this exemplifies the success of our diversification strategies and the ongoing strength of our growth initiatives. We are very pleased to achieve this performance in what traditionally has been an unprofitable quarter for our Company and during what continues to be an uncertain domestic and global economy," commented Oscar Feldenkreis, President and COO.
Mr. Feldenkreis continued, "Our efforts in expanding our international footprint are beginning to gain strong traction. Our focus on direct to consumer was also productive as we achieved solid gains in these businesses. We also successfully acquired six top retail leases in an auction, which will be converted into full price doors. These locations are scheduled to open at the start of the holiday season."
Net income attributable to Perry Ellis International, Inc. increased 194% to $1.8 million, or $0.11 per fully diluted share ("EPS"), compared to a net loss of ($2.0) million or ($0.15) per share in the comparable prior year period.
Earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the second quarter increased 81% to $8.9 million, or 4.1% of total revenues compared to $4.9 million, or 3.0% of total revenue for the comparable prior year period.
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