Perry Ellis International Inc. reported a reduced loss on lower revenues in the third quarter and said it would continue to move non-core businesses to its growing licensing platform.
The company, which is holding a conference call this morning, didn’t provide comment on reports that it’s exploring additional actions or getting pressure from activist shareholders that it look into strategic alternatives, including a possible sale of the firm or a number of its assets. It said its strategic review would continue into 2015.
“We’ve seen steady progress over the last three quarters as we have focused our portfolio, cut costs and expanded our profitable licensing and international operations,” said George Feldenkreis, chairman and chief executive officer. “We enter the last quarter of our fiscal year as a more focused company with a clear plan for achieving our goals and building upon our strong heritage. We look forward to accelerating our momentum.”
In the three months ended Nov. 1, the Miami-based sportswear firm registered a loss of $437,000, or 3 cents a diluted share, below the loss of $3 million, or 20 cents, reported for the comparable period in 2013. On an adjusted basis, this translated into a profit of 3 cents a share, below the 6-cent profit expected, on average, by security analysts tracking the firm.
Revenues fell 4.8 percent to $211.4 million from $222.1 million, with sales down 5.3 percent, to $203.3 million, and licensing royalties up 10.1 percent, to $8.2 million. The analysts’ consensus estimate for revenues as $215.1 million.
Gross margin fell to 43.7 percent of revenues from 44 percent in the year-ago period.
The company said its planned exits from a number of private and retailer-exclusive branded programs was “substantially complete” and had resulted in the shedding of about $65 million of volume. Increases from its Original Penguin, Perry Ellis Accessories and its direct-to-consumer and international businesses offset planned reductions in Perry Ellis and Rafaella collection sportswear. The firm noted that about $6 million in revenues shifted to the fourth quarter from the third quarter just completed because of West Coast port congestion.