Perry Ellis International Inc. posted a 37.3 percent rise in first-quarter net income Monday, due in part to strong sales from its new Rafaella women’s sportswear business.
The Miami-based vendor also upped its annual guidance.
For the period ended April 30, Perry Ellis registered net income of $15.4 million, or 99 cents a diluted share, compared with year-ago income of $11.2 million, or 81 cents a share. Excluding items, the company earned $1.08 a share. Net sales gained 32 percent, to $282.8 million from $214.2 million a year earlier.
Wall Street expected EPS of 99 cents on sales of $277.1 million, according to Yahoo Finance.
Gross margin dropped to 33.6 percent of revenues in the most recent quarter from 35.7 percent a year ago. Of the 210 basis point decline, about 110 points were attributable to the addition of Rafaella, a lower margin business than the company’s core operations, and 100 pounds to the conversion of licensed small leather goods and dress shirt businesses into the firm’s wholesale structure. Perry Ellis acquired Rafaella in January.
“We continue to successfully navigate a challenging product cost environment and expect to continue our strong sales and earnings performance given the strength of our products and business model which is providing us with market share expansion in existing retail doors as well as creating new opportunities for growth,” said chairman and chief executive officer George Feldenkreis.
For the year, the company anticipates EPS of between $2.40 and $2.50 a share, up from prior guidance of $2.30 to $2.40 a share. Analysts had been looking for $2.38 a share.
Shares fell 98 cents, or 3.3 percent, to $28.52 in Nasdaq trading Monday.