MIAMI (AP) _ A return to its core brands expanded profit margins at Perry Ellis in the first quarter and the clothier hiked its earnings forecast for the year, sending shares up more than 11 percent at the opening bell Thursday.
The company had faded since its heydays in the 1980s as it built up a huge stable of brands that did not garner the same loyal following of its signature label.
But it has spent the past couple of years shedding dozens of brands, focusing instead on core names like include Jantzen, Rafaella, Ben Hogan and Manhattan.
Its shift in strategy has begun to pay off.
Adjusted margins in the most recent quarter reached 34.9 percent, up from 34.1 percent in the same period last year. Net income climbed 21 percent to $9.4 million, or 62 cents per share, compared with $7.8 million, or 52 cents per share last year.
Earnings, adjusted for one-time gains and costs, were 99 cents per share, easily beating the 63 cent forecast from analysts that follow the company, according to a poll by Zacks Investment Research.
Revenue climbed 3.5 percent to $266.4 million.
The company said it now expects full-year adjusted earnings to range between $1.68 and $1.75 per share, up from its previous forecast for $1.45 to $1.55 per share.
Analysts had been looking for annual per-share earnings of $1.49, according to FactSet.
Shares of Perry Ellis International Inc., based in Doral, Fla., rose $2.75 to $26.78 in early trading.
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