Perry Ellis International Inc. reminded Wall Street of its executive changes on the same day it reported first-quarter results.
As expected, George Feldenkreis has shifted to the role of executive chairman of the company’s board, with his son Oscar now president and chief executive officer. The company noted the changes last month, but on Thursday elected to remind Wall Street analysts that the changes are official. The company said last summer those changes would be forthcoming as part of its succession planning, following a push from activist investors for better corporate governance. Many companies in the past year or so have been moving toward separating the roles of chairman and ceo.
For the three months ended April 30, net income spiked 51.4 percent to $14.3 million, or 95 cents a diluted share, from $9.4 million, or 62 cents, a year ago. On an adjusted basis, diluted earnings per share were $1.01 compared with 99 cents a year ago. Total revenues slipped 1.9 percent to $261.3 million from $266.4 million, which included a 2.9 decrease in net sales to $250.9 million from $258.3 million. The balance of revenues was from royalty income.
The company said increased sales across its core global brands — Perry Ellis, Original Penguin and its Golf Lifestyle apparel business — were offset by 3 percent planned business exits and 2 percent reduction in off-price revenues.
Oscar Feldenkreis told Wall Street analysts during a conference call: “Our core brands grew over 4 percent in the first quarter, and Perry Ellis and Original Penguin were the fastest-growing brands.…At retail, the Perry Ellis collection business exceeded as planned and we entered the first quarter with less seasonal carryover, enabling us to expedite product newness through the sales floor.”
The ceo added that knit has been a strong product category this season, noting also that “our dominance in linen is paying off with a growth of over 35 percent realized across our retail partners.” He also said Perry Ellis Travel Luxe is now about “45 percent of our sales. We will continue developing this business by incorporating more technological properties and advanced performance fabrications into our product.”
For the women’s business, he said Rafaella’s main-line comparables grew in the double digits in the quarter for the department store channel. The ceo also said Laundry saw sales increases “as each month, progressed color is resonating very well as we head into the warmer spring and summer months.” However, the department store dress business continues to be challenging, with traffic down and consumers shifting to digital shopping. To address that change, the company has partnered with Stitch Fix, Le Tote and Rent the Runway.
George Feldenkreis said on the call that its e-commerce sites are growing faster overseas than in the U.S. The U.K. web site was up this week, and he said the company will add video to help improve conversion rates. “We are already directing our marketing efforts into making sure that our digital effort take priority over everything. Digital today represented [our] fastest-growing channel of sales, and we are allocating a significant portion of our working capital and budget to service this channel.”
The executives have said on previous conference calls that it has built an in-house studio for photography and videography, which allows it to turn faster and get images online quicker for its own site and for those of its retail partners.
The company increased is fiscal 2017 adjusted EPS guidance to between $1.95 and $2. Prior guidance was between $1.90 and $1.95.