Perry's Pre Results Miss Guidance - Analyst Blog
February 16 2012 - 8:00AM
Zacks
Perry Ellis International
Inc. (PERY) recently posted disappointing preliminary
operating results for its fourth quarter and fiscal 2012. For the
fourth quarter, adjusted earnings per share are expected in the
range of 35–38 cents while the company’s revenue is expected to
increase 11% year over year to $229 million.
For full-fiscal 2012, revenue is
expected to approximate $980 million, up 24% year over year and
earnings per share are projected to range between $1.91 and $1.94.
This was a downfall from the company’s guided range of $2.00 or
above, compared to $2.45–$2.52 guided earlier, due to a challenging
third quarter. Before this slash, the company had raised its fiscal
2012 guidance twice.
The late request of retail partners
for deliveries of goods, promotional activity and sales allowances
in the holiday season hurt the company’s fourth quarter and led to
lower-than-expected results. Additionally, the designer,
distributor and licensor of a broad line of men's and women's
apparel, accessories, and fragrances, anticipates a higher
effective tax rate for the year due to an increased mix of domestic
versus international income.
This holiday season, the entire
retail industry was weighed down by a highly promotional
environment to drive traffic. Perry Ellis too had to boost
promotions to see increased traffic in its direct-to-consumer
business. Hence, challenging economic conditions and a fierce
discounting war among competitors ate up the company’s margins. As
a result, top line improved at the cost of bottom line.
Outlook
Perry Ellis, which competes with
Polo Ralph Lauren Corp. (RL) and CROCS
Inc. (CROX), remains financially stable. It has reduced
its total net debt to capitalization to 31% from 41% in fiscal
2012. In a faltering economy, the company is streamlining
operations and cutting down less productive overhead in order to
maximize profitability. However, all these initiatives will not be
implemented before the second half of fiscal 2013. Hence, near-term
concerns such as the company’s struggling margins, promotional
markdowns as well as an inflationary commodity environment continue
to nag.
Perry Ellis currently retains a
Zacks #4 Rank, which translates into a short-term Sell rating. We
are maintaining our long-term Neutral recommendation on the
stock.
CROCS INC (CROX): Free Stock Analysis Report
PERRY ELLIS INT (PERY): Free Stock Analysis Report
RALPH LAUREN CP (RL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Perry Ellis International Inc. (delisted) (NASDAQ:PERY)
Historical Stock Chart
From May 2024 to Jun 2024
Perry Ellis International Inc. (delisted) (NASDAQ:PERY)
Historical Stock Chart
From Jun 2023 to Jun 2024