Perry Ellis International Inc. expects the impact of West Coast port disruptions to continue throughout the first quarter because of the persistent backlog of containers at the docks.
The Miami-based sportswear firm reported fourth-quarter and full-year results that were largely consistent with the update it gave on business conditions on Feb. 17, when it reported that $23 million in orders couldn’t be delivered in the fourth quarter because of the port delays.
During a conference call to discuss the results, company executives said they expect the delays to be resolved by late May, prior to Father’s Day.
“In order to mitigate the lateness caused by the port closures, we have redirected a significant portion of our inbound shipments to the East Coast and anticipate that our deliveries will be back on schedule by the second quarter” of the current fiscal year, said Anita Britt, chief financial officer.
In the three months ended Jan. 31, the company’s net loss grew to $42.9 million, or $2.90 a diluted share, from a loss of $29.2 million, or $1.91, in the 2013 quarter.
Excluding costs associated with a variety of strategic initiatives aimed at focusing the company on its core brands, as well as an income tax valuation allowance against its U.S. deferred tax assets, adjusted EPS was 7 cents, above the range of EPS of 1 to 4 cents the firm projected when it provided updated guidance in February.
Revenues rose 0.7 percent to $217.7 million from $216.1 million, as sales rose 0.6 percent to $209 million and royalties expanded 5.6 percent to $8.6 million. The revenue figure fell just short of the $218 million projected by the firm in its February update.
Gross margin in the quarter held steady at 34.3 percent of sales, with margin expansion experienced in the Rafaella and Perry Ellis collections businesses and in the company’s direct-to-consumer activities.
Oscar Feldenkreis, president and chief operating officer, reported progress in the development of the Original Penguin brand, where the direct-to-consumer business grew 14 percent last year and now accounts for 34 percent of brand revenues.
“Original Penguin’s international business continues to expand,” he told analysts on the conference call. “Especially in Canada and Europe, we’re building an important brand supported among key retailers such as House of Fraser in the U.K., El Corte Ingles in Spain, Galeries Lafayette in France and Coin in Italy, We’re expanding our infrastructure in Germany as well as Austria and Switzerland.”
He said the company, which operates 21 of its own stores in the U.S. and six in the U.K., expects another year of double-digit growth in Europe and noted that royalties grew more than 20 percent last year “and represent our second largest license business after Perry Ellis.”
The company reiterated the 2015 guidance provided in February, including annual revenues of $925 million to $935 million and adjusted earnings before interest, taxes, depreciation and amortization of between $55 million and $58 million, with an ebitda margin of 6 to 6.25 percent.
For the full year, the net loss grew to $37.2 million, or $2.50 a diluted share, from a loss of $22.8 million in fiscal 2013. Adjusted EPS grew to 56 cents a diluted share from 38 cents. Revenues contracted 2.8 percent to $858.2 million from $882.6 million.