Perry Ellis ends fiscal year 2010 in outstanding financial position
Perry Ellis International, Inc. provided an update on fiscal year 2010 earnings and issued initial guidance for fiscal year 2011.
Based on preliminary results, the Company announced it expects to deliver results at or above the top end of its previously announced guidance range for the year ended January 30, 2010 ("fiscal 2010") of $0.80 - $0.95 per fully diluted share. The Company will report full year fiscal 2010 results on or about March 19, 2010. Preliminary fourth quarter results noted a return to revenue growth and strong gross and operating margin increases over prior year.
The Company ended fiscal year 2010 in an outstanding financial position. Focused inventory management throughout the year resulted in a reduction of approximately 19% compared to prior year. Positive operating cash flow provided the Company the ability to repurchase $21 million of its senior notes. As a result of this working capital and cash flow management, Perry Ellis International ended the year with full availability on its revolving credit facility and a total net debt to capitalization ratio of 34% as compared to 47% for the prior year.
"Strong performance across our product lines most notably within Perry Ellis Collection allowed us to significantly reduce our markdown allowances. This reduction coupled with inventory management and cost controls drove increased gross and operating margins for the quarter," noted George Feldenkreis, Chairman and Chief Executive Officer. "I am extremely pleased with the strength of our balance sheet and the reduction in our debt ratio exemplifies our fortitude in navigating during challenging economic times."
Fiscal 2011 Initial Guidance
The Company announced that for the twelve months ending January 29, 2011 ("fiscal 2011") it anticipates earnings per shares in the range of $1.25 to $1.40 and revenues to be in the range of $770 - $790 million for the year which represents a low to mid-single digit increase.
As the Company has exited certain underperforming businesses during fiscal 2010, it is expected that the improvement in gross margins, noted during the third quarter of fiscal 2010, will continue throughout fiscal 2011, as compared to the same periods in fiscal 2010. Besides these margin improvements, the Company also expects to maintain solid operating leverage derived from the cost reduction activities undertaken during fiscal 2010.
"After two challenging but transformational years and the most severe global economic recession since the 1930s, Perry Ellis International has emerged as a strong financial leader. We remain confident that the decisive actions we have taken will complement the strength of our brand portfolio and diversified business strategy to drive improvements in operating metrics.
"We are extremely excited regarding prospects for our new business initiatives including the launches of Callaway Golf, Pierre Cardin, as well as the Collegiate golf program as we begin the new fiscal year. Our business platforms are strategically positioned to meet the needs of numerous consumers and these platforms provide us with expansion into new opportunities," commented George Feldenkreis.
Perry Ellis International Inc