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'We are cautiously optimistic about fiscal 2011' - Perry Ellis
Nov '09
Perry Ellis International, Inc. reported results for the third quarter and nine months ended October 31, 2009.

Third Quarter Results from Operations

“We are pleased to report results slightly ahead of plan for the third quarter of fiscal 2010. This is a validation to the strength of our brands, the benefit of our diversified business model, the power of our niche strategy and the decisiveness of our actions,” commented Oscar Feldenkreis, President and COO of Perry Ellis International. “As the global economy begins to emerge from this deep recession, the Company is well on its way to reverting to a growth pattern. We see the current holiday season as the beginning of the recovery.”

For the three months ended October 31, 2009 (“third quarter of fiscal 2010”), earnings per fully diluted share at $0.31 represented a decrease of $0.02 compared to $0.33 for the third quarter ended October 31, 2008 (“third quarter of fiscal 2009”). This compares positively to Thomson's First Call consensus of earnings at $0.21 per fully diluted share for the Company during the third quarter of fiscal 2010. Earnings per fully diluted share were positively affected by a reduced number of shares outstanding and a tax benefit attributable to the reduction in unrecognized tax benefits related to the Company's foreign operations. At $4.1 million, earnings for the third quarter of fiscal 2010 declined $0.9 million compared to $5.0 million for the same period last year.

The cost reduction initiatives launched at the end of fiscal year 2009 and strict expense controls during the third quarter of fiscal 2010 resulted in operating expense reductions of $11.5 million. Operating expenses at $52.0 million represented an 18% reduction compared to $63.5 million for the third quarter of fiscal 2009. These reductions contributed to earnings before interest, tax, depreciation and amortization (“EBITDA”) for the quarter of $12.3 million. A table showing the reconciliation of EBITDA to net income is attached.

As a result of strict inventory controls and reduced operational chargebacks, the Company's gross margins for the third quarter of fiscal 2010 expanded to 34.2%, an improvement of 10 basis points compared to 34.1% for the same period the prior year.

“We are pleased with our gross margin improvements for this quarter. Despite margin pressures we have experienced throughout this fiscal year, our investment in information systems and our proactive management of the supply chain has more than offset them,” Mr. Feldenkreis continued.

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Perry Ellis International

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