Rafaella buyout helps boost revenue, Perry Ellis
Perry Ellis International Inc reported results for the first quarter ended April 30, 2011 ("first quarter of fiscal 2012").
• Total revenue increased 31% to $288.3 million as compared to $220.3 million for the comparable prior year period.
• Operating income increased 52% to $30.4 million
• Net income increased 37% to $15.4 million
• EBITDA of $33.6 million increased 45% over $23.1 million in the comparable prior year period
• Diluted EPS of $0.99 increased 22%
• Diluted EPS, as adjusted, of $1.08 increased 33%
• Increased fiscal 2012 EPS guidance to a range of $2.40 to $2.50 from previous guidance of $2.30 to $2.40.
First Quarter Operating Results
"We are extremely pleased with our results for the first quarter. Our ability to successfully capitalize on the positive momentum for our brands and business from prior year coupled with the addition of the new Rafaella women's sportswear business drove record revenue and net income for Perry Ellis International," commented Oscar Feldenkreis, President and COO. "Throughout fiscal 2012 we will continue to invest in and focus on our niche businesses such as golf and Hispanic as well as in Perry Ellis Collection, women's sportswear, direct -to-consumer, and international where we believe we can further maximize our operating model and drive significant growth and earnings for our shareholders," continued Mr. Feldenkreis.
Total revenues increased 31% to $288.3 million compared to $220.3 million in the comparable prior year period. For the first quarter of fiscal 2012 Rafaella contributed $38.9 million in total revenue. Organic revenue grew 13%, to $249 million, which excludes the recently acquired Rafaella business. Increases were driven by strong performance within the golf and Hispanic lifestyle brands, as well as in Perry Ellis Collection. Furthermore, incremental growth of $11 million in program business which was opportunistically driven by forward inventory positions added to the quarter.
Overall gross profit for the quarter increased 23% to $97.0 million compared to $78.7 million in the comparable prior year period. Gross margin was 33.6% of total revenues compared to 35.7% in the comparable prior year period. The Rafaella business, acquired at the end of January, which has lower gross margins than the Company's core businesses, impacted first quarter gross margin by 110 basis points. Furthermore, as previously noted, incremental program business and the effect of converting licenses for small leather goods and dress shirts into wholesale businesses impacted first quarter gross margin by approximately 100 basis points.
"Our first quarter results demonstrate the successful expansion of our growth strategies and the addition of Rafaella, which we believe provide us with a sustained platform for expansion in the current year and beyond," stated George Feldenkreis, Chairman and CEO. "During the quarter this led to a 31%increase in revenue and a 45% increase in EBITDA with our EBITDA margin rising 120 basis points to 11.7%. We continue to successfully navigate a challenging product cost environment and expect to continue our strong sales and earnings performance given the strength of our products and business model which is providing us with market share expansion in existing retail doors as well as creating new opportunities for growth."