Perry Ellis: Why the Emphasis on Annual Numbers in Q4 Report?

Mar.19.08 | About: Perry Ellis (PERY)

Perry Ellis (NASDAQ:PERY) announced year end numbers and is banging the drum in the hope that investors will look at the twelve month picture. (Click here for conference call transcript.)

Yes, it reduced debt dramatically and successfully deleveraged, but a closer scrutiny of Q4 shows a drop in revenues and every other operating metric, especially profits. Investors are most likely confused by management’s insistence on this emphasis. Retailers are struggling and the whole world knows it. By trying to look otherwise investors start to wonder if Perry Ellis is trying to smoke one by them.

Take a look at some hard balance sheet items. Inventories are almost unchanged, yet sales are down. No management comment provided. Accounts payable are up 20%. The dollar amount of the payable increase is almost equal to the increase in the cash position. No management comment. Oscar Feldenkreis, President and COO needs to provide additional commentary to shore up the business case.