NEW YORK — Broad-based diversification allowed Perry Ellis International Inc. to generate greater sales in the third quarter, lifting its bottom line above expectations.
This story first appeared in the November 20, 2002 issue of WWD. Subscribe Today.
For the three months ended Oct. 31, the Miami-based multilabel manufacturer reported net earnings reached $1.1 million, or 16 cents a diluted share, 1 cent above Wall Street estimates. That performance was 34.3 percent below prior-year net income of $1.6 million, or 25 cents, but above the income of $970,000, or 15 cents, achieved last year when a $647,000, or 10 cents a share, gain from the amortization of goodwill and other intangible assets is excluded.
Total revenues for the quarter increased 6.4 percent to $70.6 million from $66.4 million last year while net sales, excluding royalty income, rose 5.1 percent to $63 million from $60 million.
“Our diversification across brands, product categories and distribution channels allowed us to pursue opportunities for growth and mitigate softness in some channels of distribution,” said chief executive officer George Feldenkreis in a statement. “Our results were driven by our strong brand portfolio, particularly within midtier department stores, supported by increased marketing initiatives. We will continue to make expanding our portfolio of brands and licenses a strategic priority.”
Feldenkreis added that during the quarter, Perry Ellis continued to absorb the increased costs of the Jantzen business’s seasonal nature, and that the company remains “highly confident” the swimwear acquisition will be profitable in the fourth quarter and next fiscal year.
Overall, for the first nine months of the year, Perry Ellis posted a 5.5 percent improvement in net income to $8 million, or $1.24 a diluted share, from $7.6 million, or $1.17. Absent a $1.9 million, or 30 cent, gain for intangible amortization, earnings rose 41.7 percent. Total revenues, including royalty income, crept up 0.4 percent, to $219.3 million from $218.5 million, but net sales dropped 0.5 percent to $198.1 million.
Looking forward, Perry Ellis said it expects fourth-quarter sales to increase almost 50 percent on the strength of its core business and strong seasonal Jantzen sales. The company also said it is comfortable with the full-year diluted EPS guidance of $1.70.