Perry Ellis International reported results for the fourth quarter of fiscal 2016 and the fiscal year ended January 30, 2016.
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Total revenue for the fourth quarter of fiscal 2016 was $214 million, a 1.5% decrease compared to $218 million reported in the fourth quarter of fiscal 2015.
As previously disclosed, revenues were impacted by 1% by foreign exchange as well as from the reduction of revenues associated with exited brands, including C&C California, as well as a migration of two non-core brands to licensed arrangements during Fiscal 2017.
Excluding these effects, revenue increased 3% for the fourth quarter.
During the fourth quarter of fiscal 2016, overall gross margins expanded 290 bps to 37.2% compared to the fourth quarter of the prior year.
Margin expansion was generated in the Company's domestic menswear business driven by reduced markdowns as a result of strong consumer response to our product presentations and stronger merchandising margins.
On an adjusted basis, fiscal 2016 fourth quarter earnings per diluted share increased over 390% to $0.35 as compared to adjusted earnings per diluted share of $0.07 in the fourth quarter of fiscal 2015.
Adjusted earnings per diluted share exclude certain items as outlined in the attached Table 1 Reconciliation of GAAP diluted loss per share to adjusted diluted earnings per share.
As reported under GAAP, the fiscal 2016 fourth quarter loss was $17.7 million or $1.18 per diluted share, compared to a loss of $42.9 million, or $2.90 per diluted share, in the fourth quarter of fiscal 2015.
The Company's fourth quarter 2016 results included a $26.6 million, or $1.37 per diluted share, non-cash impairment charge recorded to reduce the carrying value of intangible assets related to brands which are part of our strategic portfolio rationalization.
In addition, foreign currency negatively impacted profitability by $700,000, or $0.04 per share.
Fiscal 2016 results
Fiscal 2016 revenues were $900 million as compared to $890 million reported in fiscal 2015. Revenue growth resulted from growth in core brands. Excluding the impact of exited brands and foreign exchange, revenues increased by 4.6%.
Adjusted earnings per diluted share for fiscal 2016 were $1.81 compared to adjusted earnings per diluted share of $0.56 in fiscal 2015. Adjusted earnings per diluted share exclude the costs outlined in the attached Table 1 for both fiscal periods. (See attached "Table 1" for a reconciliation of GAAP loss/earnings per diluted share to adjusted earnings per diluted share.)
On a GAAP basis, net loss for fiscal 2016 was $7.3 million, or $0.49 per diluted share, compared to a GAAP net loss of $37.2 million, or $2.50 per diluted share, for fiscal 2015.
Adjusted gross margin for fiscal 2016 was 35.8% compared to the adjusted gross margin of 34.1% in fiscal 2015. Gross margin was positively impacted by reduced markdowns and favorable merchandising margins in the Company's domestic businesses as well as a favorable mix in its direct-to-consumer and licensing businesses.
Selling, general and administrative (SG&A) expenses totaled $275.9 million for fiscal 2016 as compared to $268.8 million in fiscal 2015. SG&A in fiscal 2015 included $4.4 million related to pension costs associated with lump sum settlement payments on the termination of the Company's defined benefit plan.
The Company expects to complete the plan termination during fiscal 2017. Final pension costs with plan termination are expected to approximate $12-13 million.
Earnings before interest, taxes, depreciation, amortization and impairments, as adjusted (adjusted EBITDA) for fiscal 2016 totaled $55.3 million, or 6.1% of total revenues.
This compares to adjusted EBITDA of $39.8 million or 4.5% of total revenues for fiscal 2015. ■