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Mar 20, 2010
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Perry Ellis quarterly profit tops market

By
Reuters
Published
Mar 20, 2010

By Viraj Nair

BANGALORE (Reuters) - Perry Ellis International Inc's (PERY.O) quarterly profit surpassed Wall Street estimates as it continued to keep a tight lid on costs, and the clothing maker backed its outlook for the current financial year.


www.perryellis.com

The Miami-based company's shares, which have jumped 16 percent over the past month, rose 2 percent to a year-high of $23.44 on Nasdaq. However, they later pared their gains and were trading down 4 percent at $21.94.

"I think the stock has had a great run and it's just selling on the news... I guess people are just taking profits today," Brean Murray Carret & Co analyst Eric Beder said.

He added that the company's outlook for fiscal 2011 looks "extremely conservative."

For fiscal 2011, Perry Ellis, which also distributes accessories and fragrances, projected earnings of $1.25 to $1.40 a share on revenue of $770 million to $790 million.

Analysts on average were looking for a profit of $1.37, before items, on revenue of $786.4 million, according to Thomson Reuters I/B/E/S.

Analyst Beder said the company's new golf apparel contract with Callaway Golf Co (ELY.N) and license agreement with Pierre Cardin are going to be big sales drivers this year.

"There is still significant topline growth and margin expansion ahead this year," Beder said.

The company said it benefited from initial shipments of its Callaway spring products in the fourth quarter.

For the quarter ended January 30, Perry Ellis earned $8.5 million, or 64 cents a share, compared with a loss of $21.6 million, or $1.58 a share, a year ago.

Total revenue rose 3 percent to $196.4 million.

Analysts were expecting earnings of 59 cents a share on revenue of $198.9 million.

The company cut selling, general and administrative expenses by 9 percent to $49.6 million. Gross margins improved to 35.5 percent from 29 percent, boosted by reduced markdowns and strength in branded businesses.

(Reporting by Viraj Nair in Bangalore; Editing by Anne Pallivathuckal)

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