Perry Ellis International Inc. (PERY) Reinforces FY 2010 Preliminary Earnings, Offers FY 2011 Guidance

In the company’s news yesterday,

Perry Ellis International Inc. released an update for its fiscal 2010 earnings and guidance for fiscal 2011. The company said it anticipates results in line with, or exceeding the top end of its previous guidance of 80 cents to 95 cents per fully diluted share. Perry Ellis is expected to post its 2010 results mid-march, reflecting year-over-year increases over its preliminary fourth-quarter results.

“Strong performance across our product lines most notably within Perry Ellis Collection allowed us to significantly reduce our markdown allowances. This reduction coupled with inventory management and cost controls drove increased gross and operating margins for the quarter,” George Feldenkreis, chairman and CEO stated in the press release. “I am extremely pleased with the strength of our balance sheet and the reduction in our debt ratio exemplifies our fortitude in navigating during challenging economic times.”

Perry Ellis also reported a 19 percent reduction in inventory management as compared to last year. The company’s positive operating cash flow enabled the company to repurchase $21 million of its senior notes, ending the year will full availability on its revolving credit facility and a total net debt to capitalization ratio of 34 percent as compared to 47 percent for the prior year.

The company also offered guidance for 2011, noting that for the year ending January 29, 2011, it anticipates earnings per share between $1.25 to $1.40 and revenues between $770 million and $790 million for the year.

After cutting loose underperforming business during 2010, the company expects its gross margin increases to continue throughout 2011, as compared to the same periods in 2010. The company also said it anticipates solid operating leverage from cost reduction activities it conducted during fiscal 2010.

Feldenkreis said the company is confident that its business strategy and upcoming initiatives will equip the company with the strength to continue improvements in the upcoming year.

“We are extremely excited regarding prospects for our new business initiatives including the launches of Callaway Golf, Pierre Cardin, as well as the Collegiate golf program as we begin the new fiscal year. Our business platforms are strategically positioned to meet the needs of numerous consumers and these platforms provide us with expansion into new opportunities,” Feldenkreis stated.

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Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.