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Perry Ellis International Inc.’s third quarter profits fell 17.2 percent but still beat expectations, partly due to the company’s closing of under-performing businesses.
The Miami-based clothing designer found in departments stores such as Bloomingdales, Macy’s and Nordstrom’s had a net income of $4.1 million, or 31 cents per diluted share, in the quarter ended Oct. 31. That compared with year-earlier quarterly income of $5 million, or 33 cents per diluted share. The estimate by four analysts polled by Yahoo Finance was 21 cents per diluted share.
Quarterly revenues were $178.6 million compared with $222.8 million, a decrease of 19.9 percent.
“The bottom line is they went back and went through every company and business when the economy started to slow down and we’re seeing the fruits of that right now,” said Eric Beder, analyst with Brean Murray, Carret & Co. LLC.
Beder said, “They did a very good job of getting rid of unproductive lines and aggressively looking for new opportunities.”
George Feldenkreis, chairman and CEO of Perry Ellis, said in a conference call on Wednesday that the company would consider acquisitions. “A lot of our competitors are in a weak position. Some of the deck has been cleared with companies out of business,” Feldenkreis stated.
Anita D. Britt, chief financial officer of Perry Ellis, said in the conference call, “We have conscientious optimism for the holiday season.”
Perry Ellis expects earnings of 80 cents to 95 cents per fully diluted share in the fiscal year ending in January, an increase from its previously announced guidance of 70 cents to 85 cents per diluted share. The company expects that annual revenues will decrease in the low double-digit range but foresees revenue growth and gross margin improvements in the remainder of the current year. Analysts polled by Yahoo Finance estimate earnings of 82 cents per diluted share and sales of $762.4 million in the current fiscal year, compared with a loss of 89 cents per diluted share and $851.3 million in sales last fiscal year.
Net income in the nine-month period ended Oct. 31 was $4.7 million, or 36 cents per diluted share, compared with $8.7 million, or 57 cents per diluted share, in the year-earlier period. Revenue fell 15.5 percent to $557.8 million from $660.1 million.
Perry Ellis’s stock closed Tuesday at 14.99, up 11 cents.