Perry Ellis International Inc. posted a 32 percent jump in fourth-quarter earnings Monday, but saw a slight decline in full-year profits.
On a conference call with analysts, management said that given the shifts in its business and the market, the company was still able to improve profitability.
For the three months ended Jan. 31, earnings reached $10.7 million, or 68 cents a diluted share, from $8.1 million, or 54 cents, in the year-ago period as sales rose 8.3 percent to $231.6 million from $213.9 million.
Full-year earnings dipped to $22.4 million, or $1.45 a diluted share, from $22.7 million, or $1.51 cents a share, last year. Sales slid 2.3 percent to $829.8 million from $849.4 million.
George Feldenkreis, chairman and chief executive officer, said on a conference call that the company "managed to improve our profitability by delivering better fashion and higher-value products to the stores, while becoming more focused on our planning and operational infrastructure."
The chairman said this resulted in a "15 percent reduction in sales allowances over the previous year. We also reduced our distribution cost by 15 percent compared to the previous year. Moreover, we reduced some price and other low-margin sales which resulted in much better margins this year."
During the quarter the Miami-based company declared and paid a 3-for-2 stock dividend. Perry Ellis, which designs men"s and women"s apparel, accessories and fragrances, said in-line fourth-quarter results were buoyed by sales of higher-margin merchandise, such as swimsuits.
The company said the challenges to delivering better fiscal results were due to retail consolidation and the discontinuing of select private label sportswear collections in the first half of the year. "We believe the feedback from the MAGIC show in February and our results in fiscal 2007, especially in our fourth quarter, put us on track for a record year in fiscal 2008," said Oscar Feldenkreis, president and chief operating officer, in a statement. "We expect strong growth coming from our Perry Ellis brand, golf and Hispanic lifestyles, swimwear/action sports, international and direct retail operations."
Management expects fiscal 2007 earnings in the range of $1.81 to $1.84 a diluted share.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"