Less stores and more Golf and Swim sales, cornerstone to Perry Ellis’ Q2 positive results

Perry Ellis International Inc. (PERY) joined other fashion retailers such as Abercrombie & Fitch in reporting positive results for the second quarter. The apparel group saw revenues climb 10 percent over the three months to June, 29.

The fashion group explained Thursday that its core brands, namely Perry Ellis, Original Penguin, Golf Lifestyle Sportswear and Nike Swim, represented 77 percent of its total revenue in the quarter. Its portfolio of brands includes its namesake, Laundry by Shelli Segal and Jantzen. Additionally, the company owns licensing rights over Nike Inc. (NKE), PGA Tour, and other labels.

Over the period, the group reported net income of 979,000 dollars, or 6 cents per share, well ahead last year’s same period’s 3.57 million loss. Adjusted EPS of 16 cents was also better than expected, beating FactSet consensus of 10 cents per share. Revenue also went up, totaling 206.6 million dollars, up from 201.7 million dollars last year and ahead of the 204.0 million dollars FactSet consensus.

Perry Ellis reiterates its previous guidance

Despite the positive quarter, Perry Ellis reiterated its fiscal 2018 guidance for revenue in the range of 870 million dollars to 880 million, and EPS in the range of 2.07 to 2.17 dollars. The retailer’s prediction was quite a conservative one when compared against FactSet’s consensus for revenue of 878.5 million dollars and EPS of 2.13 dollars.

Quarterly strengths have taken an effect on the company’s shares, trading upwards over the second quarter (4.3 percent) but still down 23.1 percent for the year so far. As a reference, the S&P 500 index SPX, is up 9.3 percent for 2017 to date.

In terms of performance, both the company and the market have focus their attention on the Swim and Golf sector. “The swim season, which ended in June, was extremely strong across all genders and most geographies,” said Perry Ellis’ CEO. “We saw growth across all channels. In the sporting goods channel consumers responded well to Nike’s performance swim and swim accessory line and extended sizes, which both grew by double digits,” he added.

Europe and Latin America turn Perry Ellis main expansion markets

The company’s CEO has recently noted that while the U.S. market is still the largest part of Nike Swim’s revenues, the brand is making significant headway with the expansions in Europe and Latin America. He added, “We’re currently taking orders for the new swim season and are very excited about the early bookings. We expect store and market share expansions across all product, genders and swim

“It looks that this is coming to an end,” said Feldenkreis of the devaluation pressures. “The British pound, the Mexican pesos as well as the Canadian dollar have strengthened against the dollar. Europe’s retail is doing much better than a couple of years ago and now our brands are resonating strongly with consumers.”

Overall, he believes the company’s core brands, citing Original Penguin, Cubavera, Perry Ellis, Nike and Callaway, are resonating with millennials and “this has allowed us to stay strong as an open door to many more channels and distribution.”

North America and Europe, key markets for further international expeansion

Specifically, in the North America, the executive chairman applauded the moves by many of its retail partners to rationalize their stores’ bases as well as push for faster turnaround on delivery to quicken turns and reduce the need for markdowns. , reported /

Said Feldenkreis, “Generally speaking, we believe that less retail space in America is a positive development, especially in light of the demographic implication of generation C and Y compared to generation X and the unstoppable growth of e-commerce. These seismic changes are creating condition which manufacturer and retailer have to learn to navigate if they waYahoo..nt to stay in business.”