Perry Ellis posts sales increase and revenue decline, will close 15 stores
Perry Ellis’ increased focus on its core business paid off for the second quarter. Oscar Feldenkreis, Chief Executive Officer of Perry Ellis International, said that he believes the 4.1% sales increase in the second quarter is a showing of the company’s focused strategy that drives business.
In order to improve business, Perry Ellis plans to close 15 underperforming retail stores in the next 18 months and increase focus on e-commerce as well as improve retail performance.
Total revenue decreased 5% to $202 million from $213 million in the previous year. The company’s increased sales for its core global brands were offset by 3% planned business exits, 2% reductions in special market revenues and negative currency headwinds of approximately 1.4%.
Gross margin expanded 100 basis points to 36.6% from 35.6% in the previous second quarter due mostly to the company’s Men’s Sportswear, Golf Lifestyle and Nike businesses, as well as direct to consumer. SG&A expenses increased to $72.7 million from $68.3 million and adjusted EBITDA was $7.1 million compared to $8.9 million in the prior year’s comparable period.
Perry Ellis closed the quarter with a total of $134 million in inventories compared to $154 million in the prior year and $183 million at the end of fiscal 2016.
Feldenkreis added, “We remain confident in our highly desirable portfolio of lifestyle brands — Perry Ellis, Original Penguin and Golf Lifestyle. This combined with the continued traction of our strategy and our strong balance sheet positions us well to deliver on our objectives for fiscal 2017 to drive sustained long-term growth and increased value for our shareholders.”
The company maintains its EPS guidance range of $1.95 to $2.00, and it updated its fiscal 2017 revenue guidance to a range of $885 million to $900 million reflecting changes in currency translation and Brexit.
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