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Growth Platforms drives gross margin of Perry Ellis
May '08
Perry Ellis International Inc reported results for the first quarter ended April 30, 2008 (first quarter of fiscal 2009). For the first quarter of fiscal 2009, total revenues grew to $243.5 million, a $14.8 million increase compared to $228.8 million reported in the first quarter of the fiscal year ended April 30, 2007 (first quarter of fiscal 2008).

Revenue increases were driven by the Company's growth platforms - Perry Ellis collection, swimwear/action sports, Hispanic & golf lifestyles, direct retail plus initial shipments of the recently acquired women's contemporary brands - Laundry and C&C California.

Gross profit increased by $6.8 million to $84.6 million compared to $77.8 million during the first quarter of fiscal 2008 with gross margin rising 72 basis points to 34.7% of net revenues. This improvement was driven by growth initiatives that focus on higher margin platforms such as the Perry Ellis retail division and the branded business - particularly Perry Ellis, Nike Swim, Hispanic, golf lifestyle brands, women's contemporary - and the reduction in bottoms private label programs, particularly at the mass distribution channel.

"Our diversification strategy has proven its validity once again, as we delivered increased revenues and gross profit while exceeding analysts' expectations despite a difficult domestic retail environment. We attribute our continued strength to the advantages of our business model," said Oscar Feldenkreis, President and Chief Operating Officer. "Our brands continue to perform strongly at retail, and we remain very optimistic about achieving the goals we set for Perry Ellis International this year," Mr. Feldenkreis continued.

First quarter of fiscal 2009 operating expenditures grew by $7.7 million due to expenses related to the integration of women's contemporary brands - Laundry and C&C California in February of 2008 and the closing of the Company's distribution facility in Winnsboro, S.C. The Company also incurred incremental costs related to the Perry Ellis retail expansion strategy, with two new stores, and investment in the European and boys wear divisions.

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