US: Perry Ellis swings to second quarter loss
Apparel group Perry Ellis International reported a net loss of $5.4m for the second quarter, compared to net income of $267,000 in the prior year period, impacted by delayed shipments.
For the second quarter of fiscal 2009, total revenues were $193.7m, a $1.6m reduction compared to $195.3m reported in the second quarter of the fiscal year, primarily due to the under-performance of its outlet division, disruptions due to management changes in European operations and the impact of multiple retailers declaring bankruptcy this quarter, the company said.
Q2 earnings included the net effect of management changes and its repositioning in its European division, and the net effect related to the acquisition of C&C California and Laundry by Shelli Segal, which the company did not operated last year.
It also had incremental expenses related to the opening of three new Perry Ellis stores and one Original Penguin store, and a non-cash impairment of marketable securities.
The company also reported a shift in revenue from the second quarter to the third quarter, related to delayed shipments as a result of integration issues with a third-party logistics distributor on the West Coast.
In addition, the company said that bankruptcies of certain retail customers in the quarter affected revenues by approximately $6.0m.
"While revenue and gross profit were in line with our expectations, our results were affected by increased costs and reduced shipments related to the move to third-party distribution from our facility in Winnsboro; a repositioning of our European operations and incremental costs associated with newly acquired businesses.
"Combined this led to results that were well below a year ago and overshadowed strong performances for many of our growth platforms, including Perry Ellis Collection, swim, golf lifestyle and Laundry and C&C of California. Importantly, we believe the investments we are making in our brands, businesses and infrastructure position us for increased profitability and growth potential in the near future," Oscar Feldenkreis, president and COO said.
For the six months ended on 31 July, revenues increased by 3.1% to $437.2m, while net income declined from $9.8m to $3.7m. The company confirmed its revenue guidance for fiscal 2009 at $910-$925m.
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