Perry Ellis Says Margins Expand, Backs 2016 Views

Perry Ellis International Inc. said it narrowed its loss in the fourth quarter, as the company Tuesday backed its outlook for the year amid expanding margins.

Results were in line with estimates the company provided in March.

The company said its margins benefited from its domestic menswear business, where a solid response to product presentations and stronger merchandising margins led to fewer markdowns.

Shares, which had fallen 8.5% in the past month and 27% from a year ago, rose 1.6% to $18.13 in light premarket trading.

Operating Chief Oscar Feldenkreis said that a "focus on building our core brands" would enable the company "to deliver continued long-term profitable growth."

Perry Ellis, known for its men's dress shirts and slacks, has a portfolio of dozens of brands that include Callaway Golf and Original Penguin, in addition to its namesake label. The company has been under pressure from activist investor Legion Partners Asset Management LLC, which had first started pushing for changes in May 2015.

Legion and the California State Teachers' Retirement System, or Calstrs—which has an investment in Legion—have been concerned with Perry Ellis's profit margins. The company has said it is targeting 38% by its 2019 fiscal year. In the fourth quarter, its gross margin expanded to 37.2% from 34.3% a year earlier. For its full 2016 fiscal year that ended in January, the company's margin was a record 35.8%.

Over all, the company said it lost $17.7 million, or $1.18 a share, compared with a loss of $42.9 million, or $2.90 a share, in the year ago quarter.

Excluding items, such as an impairment charge on long-lived assets, the company reported per-share profit of 35 cents. Revenue rose 1.5% to $214.4 million. Those results were in-line with the company's preliminary revenue and adjusted earnings figures reported a month ago. Excluding effects such as foreign currency exchange and exited brands, the company said revenue rose 3%.

The company backed its fiscal outlook for 2017, projecting total revenues to be in a range of $910 to $915 with adjusted profit coming in between $1.90 and $1.95 a share.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

April 12, 2016 08:55 ET (12:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.