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Perry Ellis confirms revenue guidance for fiscal 2009
23 Aug '08
5 min read
Gross profit increased by $0.5 million to $62.2 million compared to $61.7 million during the second quarter of fiscal 2008 with gross margin improving 52 basis points to 32.1% of net revenues. This improvement is a direct consequence of the Company's strategic shift from private label into branded business.
During the second quarter of fiscal 2009, the Company's private label bottoms business decreased $9.3 million in revenue, partially offset by strong performance in the swim platform; revenue increases both in Perry Ellis Collection and golf lifestyle brands; plus the addition of Laundry by Shelli Segal and C&C California.
Compared to the second quarter of fiscal 2008, operating expenditures grew by $6.9 million during the second quarter of fiscal 2009. This increase was driven by continuous investment in Perry Ellis International's growth initiatives: (1) women's contemporary, through the addition of a design team for sportswear and increased investments in marketing, advertising and samples; (2) Europe, through the hiring of a new management team upon retirement of the previous Managing Director; (3) retail, with the opening of two new stores and (4) e-commerce, with the addition of a new vice president and increased investment in viral marketing and other Web 2.0 initiatives.
"The opportunities we have identified in our major growth initiatives such as women's contemporary, international and e-commerce compels a corresponding commitment of resources and management attention. At the current stage, we must continue to invest in the development plans on our key growth opportunities if we are to maximize their potential," Mr. Feldenkreis concluded.
Also during the second quarter, the Company determined that certain marketable securities which were classified as available for sale were deemed to be other than temporarily impaired. The Company has recognized a pre-tax impairment of $2.0 million or a net loss of ($.08) per fully diluted share for these marketable securities.
As a result, EBITDA as adjusted was $1.9 million for the second quarter of fiscal 2009, compared to $8.3 million, representing a reduction of $6.4 million over the same period last year. A table showing the reconciliation of EBITDA and EBITDA as adjusted to net income is attached.
The Company continued strengthening its financial position. Proactive retail planning led to a decrease in inventories of $3.3 million compared to the same period last year, reaching $133.1 million at quarter end. The Company's total debt was $197.0 million at the end of the second quarter of fiscal 2009, representing a debt to capital ratio of 41% compared to 40% for the same period last year.
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During the second quarter of fiscal 2009, the Company's private label bottoms business decreased $9.3 million in revenue, partially offset by strong performance in the swim platform; revenue increases both in Perry Ellis Collection and golf lifestyle brands; plus the addition of Laundry by Shelli Segal and C&C California.
Compared to the second quarter of fiscal 2008, operating expenditures grew by $6.9 million during the second quarter of fiscal 2009. This increase was driven by continuous investment in Perry Ellis International's growth initiatives: (1) women's contemporary, through the addition of a design team for sportswear and increased investments in marketing, advertising and samples; (2) Europe, through the hiring of a new management team upon retirement of the previous Managing Director; (3) retail, with the opening of two new stores and (4) e-commerce, with the addition of a new vice president and increased investment in viral marketing and other Web 2.0 initiatives.
"The opportunities we have identified in our major growth initiatives such as women's contemporary, international and e-commerce compels a corresponding commitment of resources and management attention. At the current stage, we must continue to invest in the development plans on our key growth opportunities if we are to maximize their potential," Mr. Feldenkreis concluded.
Also during the second quarter, the Company determined that certain marketable securities which were classified as available for sale were deemed to be other than temporarily impaired. The Company has recognized a pre-tax impairment of $2.0 million or a net loss of ($.08) per fully diluted share for these marketable securities.
As a result, EBITDA as adjusted was $1.9 million for the second quarter of fiscal 2009, compared to $8.3 million, representing a reduction of $6.4 million over the same period last year. A table showing the reconciliation of EBITDA and EBITDA as adjusted to net income is attached.
The Company continued strengthening its financial position. Proactive retail planning led to a decrease in inventories of $3.3 million compared to the same period last year, reaching $133.1 million at quarter end. The Company's total debt was $197.0 million at the end of the second quarter of fiscal 2009, representing a debt to capital ratio of 41% compared to 40% for the same period last year.
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Perry Ellis International Inc
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