Deutsche Bank Lays Out Some Expectations For Perry Ellis' Q2 Results

According to Dave Weiner of Deutsche Bank, Perry Ellis International, Inc. (NASDAQ: PERY) reported first-quarter results that "stood out" as it surpassed expectations. However, several department stores have already reported stronger-than-expected results in the second quarter (scheduled August 18) likely implies Perry Ellis' results will "meet the bar."

Weiner is forecasting Perry Ellis to report a break-even earnings per share on a 7.2 percent revenue decline and a contraction in its operating margin.

Furthermore, Weiner is questioning if Perry Ellis' inventories are "under control" after ending the first quarter with a "modest" -3.0 percent spread between sales growth and inventory growth. The analyst will be looking for signs of whether the company maintained its lean inventory position at the end of the second quarter.

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Weiner also noted that there is a good amount of uncertainty in the bottom half of the fiscal year. Specifically, Perry Ellis' management issued a "very weak" second-quarter revenue guidance, and the company needs to show an acceleration in revenue in the bottom half of the year by a high-single-digit percentage growth rate to achieve the guidance.

Finally, Weiner pointed out that Perry Ellis' management previously called out for normalization in tourism traffic trends in the bottom half of the year. The analyst will also be looking out for management's outlook at a time when many department stores reported mixed trends in their own businesses.

Shares remain Hold rated with an unchanged $26 price target.

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