Perry Ellis beat its own revenue estimates for the second quarter and saw a continuing return to profit.
Total revenue for the company, including royalty income, tallied $206.6 million for the three months ended July 29, a 2.5 percent increase over last year and 0.7 percent higher than internal projections.
Net income came in at $979,000 for the quarter, compared to a net loss of $3.56 million a year ago. Earnings per share totaled 6 cents.
Wall Street was pleased with the results and sent shares of the company up 15 percent to $19.92, the highest level since May.
With the improvements, Perry Ellis reiterated its full-year guidance of revenue between $870 million and $880 million and diluted earnings per share up to $2.17.
Chief executive officer and president Oscar Feldenkreis said the second quarter was a continuation of “positive momentum” seen in the first part of the year. The company’s first quarter results showed profits down 10 percent and sales down 6.8 percent, but both exceeded expectations.
“Our ongoing positive performance demonstrates the power of our core brands, the strong response to our product innovations and the intense focus with which we direct our resources to deliver,” Feldenkreis said.
He added during a call with Wall Street analysts that innovations are giving the consumer “a reason to replenish their wardrobe.”
“We continue to emphasize stretch, which is an important trend for the Perry Ellis consumer and driving sales growth,” Feldenkreis said.
Next month, the brand is launching a Uniform Collection comprised of all technical and “easy-care” fabrics, which should continue to drive sales.
He noted that Perry Ellis, Original Penguin, Golf sportswear and its Nike brands showed “particular strength” during the quarter. A boost for golf apparel stemmed from shoppers’ beginning to wear the styles casually.
“Our brands and business are positioned for success as we enter the fall season,” Feldenkreis added.
Founder and executive chairman George Feldenkreis pointed to 12 store closures over the last 18 months as another reason for the company’s boost in profits.
“Our focus on improving the performance of our own stores has produced better results, and as we close down some more of our full-priced stores, the results will be very visible,” Feldenkreis said. “We feel that we’re going to end the year with a much better forward profit margin. The expense reduction in direct-to-consumer has improved the profitability of this business.”
Perry Ellis returned to profitability at the end of 2016, but still struggled with sales declines attributed to smaller retail orders and a 6 percent decline in comparable store sales in the company’s direct-to-consumer business.
For More, See: