Perry Ellis International Inc. (NASDAQ:PERY) Q1 2019 Earnings Conference Call - Preliminary Transcript

May 31, 2018 • 09:00 am ET


Perry Ellis International Inc. (NASDAQ:PERY) Q1 2019 Earnings Conference Call - Preliminary Transcript


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Oscar Feldenkreis

spring products performed above plan. We have seen a strong reaction to the introduction of our Work Plus Play concept anchored by the new uniform, versatile wardrobe staples with performance and easy care features. Our total stretch wovens have been our best performers in this group. Newness is driving the dress pant category, which led our portfolio dress bottoms to have one of the best quarters on record with a plus-25% increase at retail. We have introduced new fabrications and constructions, and our fit offerings today include classic, modern, slim, and very slim. We're seeing performance fabrics, stretched gripper waistbands, and very slim fit as some of the top performers, which we will be expanding on throughout the year.

Original Penguin had a solid quarter with high-single-digit growth of plus-7%. This performance reflects the success of our innovative product strategy with a push on new branding and logo-driven product. In 2018, we introduced five new versions of the Penguin logo with more development for 2019. Innovation and product drove sales at higher retails, and we continue to focus on elevated distribution within better department stores, ecommerce sites, and specialty stores in the U.S. and Canada. In Europe, Original Penguin had an encouraging retail performance in wholesale and ecommerce with key young fashion retailers.

In Q1, Callaway saw a high double-digit sales growth of over 25%. Newly introduced and innovative core essential styles led the brand's growth, featuring stretch, UV protection, ventilation, and cooling technologies. The Callaway ladies plus sizes, a very much in demand category, were successfully introduced for the first time for spring 2018 and will be extended as a major initiative to additional channels and key accounts in fall 2018 and onwards. In looking to the second half of the year, the new Callaway fall 2018 weather series collections pre-booked extremely well and will allow us to further gain market share and make the golf lifestyle all year round business.

Callaway Europe had double-digit revenue growth despite a challenging business environment. Our growth in revenues and profits speaks to the dominance of the Callaway brand, and we also ship PGA Tour collection to Golf America in the U.K. This puts this exciting brand in a strong position for international expansion.

Nike Swim experienced a very strong Q1, realizing double-digit growth over the previous year. All geographies grew, with the fastest growing region being Europe. The quarter saw our first shipments to Asia. A shop-in-shop opened this month in Korea at Lotte Department Stores with the support of one of our best-in-class distributor partners. We will be expanding further into Asia during the fourth quarter.

Our plans to expand Nike Swim globally are taking hold nicely. During the quarter, sales generated outside of the United States represented 16% of the total revenues, up mid-single digits from the same quarter last year. We anticipate being in nearly 60 countries during the next swim season. Nike Swim in Europe continues to grow significantly driven through planned territory expansions now operating in