Perry Ellis International Inc. nearly doubled first-quarter earnings on the strength of improved consumer spending and better margins, prompting the company to raise its full-year profit and revenue forecasts.
For the three months ended May 1, net income was $11.2 million, or 81 cents a diluted share, up 91.5 percent from $5.8 million, or 46 cents, in the year-ago quarter.
Total revenue in the quarter inched up 0.1 percent to $220.3 million, from $220 million a year ago. The company increased revenues organically by $17 million in several core brands, but that growth was offset by the firm’s previously announced exit of some unprofitable businesses.
The earnings handily beat analysts’ average estimate of 60 cents a share, but PEI missed their revenues estimate of $230.2 million.
“As the economy continues to show signs of recovery, consumers are responding positively across our brand portfolio,” said Oscar Feldenkreis, president and chief operating officer of the Miami-based company, whose brands include Perry Ellis, Jantzen, Original Penguin and C&C California. “We continue to see the consumer returning to more normal shopping patterns, which is contributing to increased shipments of our brands at most retailers. In addition, conservative inventory planning at retail, combined with a favorable response to our offerings, has translated into increased sell-through rates at retail and less markdown assistance, [which] resulted in a substantial increase in our gross margin rate for the quarter.”
Gross margins improved by 420 basis points to 35.7 percent, compared with 31.5 percent a year ago.
The company raised guidance for the full year to earnings per share of $1.45 to $1.60 and total revenue of $775 million to $795 million, from a previous range of $1.25 to $1.40 and $770 million to $790 million.