And chief executive officer and president Oscar Feldenkreis said department stores were making the right moves.
On a conference call with analysts, he noted: “We all know that the department store brick-and-mortar business has been heavily impacted by the growth of e-commerce, especially on the women’s side by the advent of the vertical European retailers like Zara, H&M and [Uniqlo]. While department store business represents approximately 29 percent of our business, we think that retailers have taken the right steps to reduce their store base and close underperforming doors. As they diminish in size, their lower inventory needs will allow them to increase their cash flow and increase the cash availability, which will help them improve their performance in the years ahead.”
Perry Ellis’ first-quarter profits slid 10.4 percent to $12.8 million, or 83 cents a diluted share, from $14.3 million, or 95 cents, a year ago. Sales for the three months ended April 29 fell 6.8 percent to $233.8 million from $240.9 million.
Perry Ellis had prepped the market for lower earnings per share, of 70 cents to 75 cents, and lower revenues, between $230 million and $235 million.
Investors traded shares of the company up 11.8 percent to $20.25.
Feldenkreis described the first quarter as “a solid start.”
“Our razor-sharp focus on maximizing the potential of our core global brands by delivering a continuous flow of new innovative products while maintaining tight inventory discipline continued to serve us well in a difficult U.S. retail environment, with particular strength in Golf Lifestyle Apparel and Nike Swim,” he said. “During the quarter, we also continued to make progress on our speed-to-market initiatives, which position us to bring new innovation to store faster at increasing margins and replenish the most sought after products in season.”
More from WWD: