Positive results for Jantzen & Nike during swim season at Perry

29 May '09

5 min read

Perry Ellis International Inc reported results for the first quarter ended May 2, 2009 (first quarter of fiscal 2010).

Results from Operations
For the first quarter of fiscal 2010, total revenues decreased by 9.7%, or $23.5 million, to $220.0 million compared to $243.5 million reported in the first quarter of the fiscal year ended April 30, 2008 (“first quarter of fiscal 2009”). Compared to last year, the Company increased revenues in several of the Company's core businesses including:
• Strong performance of its golf brands at department and mid-tier stores, increasing revenues by $9.6 million;
• Positive results for Jantzen and Nike during current swim season, increasing revenues by $3.2 million; and
• Door expansion for Hispanic lifestyle brands, particularly Centro at Kohl's and Cubavera at the department store channel, plus new belts and accessories programs.

These increases were offset by:
• Further reduction of private label bottoms, accounting for revenues of $7.0 million;
• Departure of multiple retailers which filed for Chapter 11 during fiscal 2009, accounting for revenues of $6.2 million;
• Planned licensing-out of Perry Ellis dress shirts business, accounting for $3.4 million in revenues; and
• Deceleration of PING golf business at the corporate channel.

The Company also reported performance improvement in its underperforming businesses as compared to the prior year, particularly for the Laundry by Shelli Segal brand, Perry Ellis retail outlets as well as its international business in the U.K.

“We remain focused on improving the performance of those businesses challenged during fiscal 2009. The cost reduction efforts we implemented last year are proving successful in bringing these platforms back to profitability. We are particularly encouraged by our Perry Ellis retail performance this past quarter,” Oscar Feldenkreis, President and COO commented.

Pressured both by the planned exit of the licensed PING golf business and by the unusually promotional retail environment, particularly for private label programs within bottoms and swim, gross margins decreased to 31.5% compared to 34.7% during the first quarter of fiscal 2009.

“Considering the overall weakness of the consumer environment, our diversification strategy has proven key to a solid first quarter performance, ahead of expectations. Overall, we continue to gain market share in those areas where we hold strong competitive advantages. These are encouraging developments and signal that the consumer is beginning to feel less anxious; however we believe that the recovery will follow a slow upward slope and will take several quarters to be completed,” Mr. Feldenkreis continued.

Driven by the cost cutting initiatives reported during the fourth quarter of last year, the Company's first quarter operating expenditures decreased by $7.9 million to $54.4 million, compared to $62.3 million for the first quarter of the prior year. EBITDA was $14.9 million compared to $22.3 million for the first quarter of fiscal 2009.

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