Fiscal 2018 total revenue was $875 million, a 2 per cent increase (2 per cent increase on constant currency) compared to $861 million in fiscal 2017.
The disciplined management of inventory along with increased sales of higher margin core brands led to expansion in GAAP gross margin to 38.9 per cent in the fourth quarter of fiscal 2018 from 38.4 per cent. Strength in the company's Perry Ellis, Golf Lifestyle Apparel and Nike swim business led to the margin increase. The adjusted gross margin was 38.9 per cent compared with adjusted gross margin of 38.7 per cent in the comparable period of the prior year.
Adjusted gross margin for fiscal 2018 was 37.8 per cent compared to 37.2 per cent in fiscal 2017. Gross margin was positively impacted during fiscal 2018 by favourable product performance, which led to increases in merchandising margin in the company's domestic businesses.
"We are pleased to continue the positive momentum for our brands and businesses in the final quarter of the year, delivering a double digit increase in total revenue, a 50 basis point expansion in gross margin and continued leverage in expenses which contributed to an almost doubling of GAAP pre-tax earnings compared to the fourth quarter of last year. Our ongoing strength continues to validate the success of our strategy and the strong execution of our initiatives by our team with continuous innovation across our powerful global brands leading to strong acceptance of our product offerings around the world," Oscar Feldenkreis, chief executive officer and president, said
"The fourth quarter saw us direct our growth toward our higher margin core brands, channels and businesses which resulted in core brand sales increasing 19 per cent, international growth of 33 per cent, ecommerce sales rising and positive comparable sales. We remain excited about our outlook as we begin fiscal 2019 and expect the execution of our strategy along with the disciplined management of expenses and our balance sheet to result in another strong year for Perry Ellis International and its shareholders," added Feldenkreis.
The company's financial position continues to be very strong. Fiscal 2018 year-end cash and investments totaled $49.3 million. The company's net debt to total capitalisation stood at 10.7 per cent at fiscal 2018 year-end as compared to 17.2 per cent at the end of fiscal 2017. Working capital management continues to be a critical focus across the organisation as inventory turned at approximately 3.8 times for fiscal 2018.
For fiscal 2019, the company expects total revenue to be in the range of $855-$865 million from core sales of $843.6 million in fiscal 2018. Excluding any potential expenses (which could be significant) to be incurred by the company in connection with the board of director's exploration and evaluation of potential strategic alternatives and the related February 9, 2018 proposal to acquire the company, diluted earnings per share are currently expected in the range of $1.80 to $1.90 assuming a tax rate of 25 per cent, which compares to core adjusted diluted earnings per share of $1.70 in fiscal 2018. (RR)
Fibre2Fashion News Desk – India
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