Shares of Perry Ellis International Inc. lost more than a sixth of their value in Nasdaq trading Tuesday after the company reported preliminary fourth-quarter results that were sharply below previous guidance and analysts’ expectations.
“We experienced a very difficult environment,” said Oscar Feldenkreis, president and chief operating officer of the Miami-based sportswear firm, “which required our customers to become more aggressive with promotions and limit new orders. This contributed to much lower sales versus our projections.”
The company now expects adjusted earnings of between 2 and 5 cents a diluted share in the fourth quarter ended Feb. 2, versus previous expectations of between 63 and 69 cents and the analysts’ consensus estimate of 65 cents. Revenues, originally expected to land between $263.9 million and $273.9 million, are now expected to land at about $216 million, 16 percent below the year-ago tally and 21.1 percent below the $273.6 million sum expected, on average, by analysts.
These fourth-quarter results would leave the firm with full-year EPS of between 34 and 37 cents on an adjusted basis with revenues of about $912 million. When Perry Ellis reported third-quarter results in November, expectations were for adjusted EPS of between 95 cents and $1.01 on revenues of between $960 million and $970 million.
The firm provided initial guidance for the new fiscal year for revenues of between $910 million and $920 million with gross margin rising 50 to 60 basis points to between 33.7 and 33.8 percent of sales.
Shares fell 17.5 percent, or $2.75, to $12.93. Their $12.37 low point for the day established a 52-week low.
The firm said late Monday that the shortfall was caused by a combination of factors ranging from inclement weather to poor traffic and heavy promotions among its wholesale clients. Weak traffic contributed to a 4.8 percent decline in same-store sales in its own retail operations. Low demand led to lower replenishment orders and to retailers in some cases pushing back January deliveries into the first quarter.
“We expect our customers to remain cautious and have adjusted our expectations for initial delivery and replenishment orders” for the current year, Feldenkreis said.
Among the growth areas for Perry Ellis during the final three months of the fiscal year were its Original Penguin, Nike performance swim, international and licensing businesses. Also, a shift in its mix to golf apparel, its Rafaella brand and licensing provided for a 170 basis point expansion of quarterly gross margins.
Perry Ellis said it had undertaken an “infrastructure rationalization” to adjust to the uncertainties of the retail environment. Among its goals are a streamlining in the channels in which it currently does business and a redeployment of its resources to businesses “poised for more significant growth.”
Last week, the company said that Alexandra Wilson, cofounder of Gilt, had joined its board of directors. She takes the seat previously occupied by Eduardo Sardiña, the former chief executive officer of Bacardi USA, who’s stepping down after nearly four years as a director.
The company expects to report final, audited fourth-quarter and full-year results the week of April 7.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast