Perry Ellis' Q4 Previewed At Wunderlich, Notes 'Momentum Slowly Building'

March 30, 2015

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In a report published Monday, Wunderlich Securities analyst Eric Beder reiterated a Buy rating and $29 price target on shares of Perry Ellis International, Inc. (NASDAQ: PERY) ahead of its fourth quarter print on Thursday before market open.

Perry Ellis is expected to earn $0.03 per share in the quarter on revenue of $218.052 million.

Beder noted that the quarter will be a “non-event” as management already preannounced a “disappointing, West Coast labor-slowdown-driven” fourth quarter results in mid-February. However, the analyst added that he is looking for how quickly the company’s operations will return to normal.

Beder continued that he is expecting fiscal 2016 guidance will reflect a a “turn in the making” given a push out of high margin shipments from the fourth quarter to the first quarter. The analyst added that fiscal 2016 will likely be more front-end loaded depending on its ability to return to normal shipping flows after the dock labor slowdown.

“While the West Coast dock slow down has been a disappointment, we believe the company is doing the right things to return the focus on top line growth and margin expansion,” Beder wrote. “We expect further progress in 1Q and a return to more normalized growth post 1Q; further, we believe there remains opportunities in all the company’s key divisions to drive further market share gains.”

Bottom line, with shares trading 15 percent below its 52-week highs, the risk/reward remains “impressive” and the analyst remains confident in his fiscal 2016 earnings per share estimate of $1.35 — $0.11 above the Street.