Tuesday, March 18, 2008

Perry Ellis Accentuates Annual Numbers So Look At Q4

Perry Ellis (PERY) announced year end numbers and is banging the drum wanting you to look at the twelve month picture. Yes they did reduce debt dramatically and successfully deleveraged. But a closer scrutiny of Q4 shows a drop in revenues and every other operating metric especially profits. Investors are most likely confused by management’s insistence on this emphasis. Retailers are struggling and the whole world knows it. By trying to look otherwise investors start to wonder if Perry Ellis is trying to smoke one by them.

Take a look at some hard balance sheet items. Inventories are almost unchanged. Yet sales are down. No management comment provided. Accounts payable are up 20%. The dollar amount of the payable increase is almost equal to the increase in the cash position. No management comment.

Oscar Feldenkreis, President and COO needs to provide additional commentary to shore up the business case.