NEW YORK ( TheStreet) -- Perry Ellis International (Nasdaq: PERY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • PERY's revenue growth has slightly outpaced the industry average of 14.0%. Since the same quarter one year prior, revenues rose by 23.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ELLIS PERRY INTL INC's earnings per share declined by 21.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ELLIS PERRY INTL INC increased its bottom line by earning $1.71 versus $0.99 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.71).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, ELLIS PERRY INTL INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has decreased by 9.3% when compared to the same quarter one year ago, dropping from $7.18 million to $6.51 million.

Perry Ellis International, Inc. engages in designing, sourcing, marketing, and licensing apparel products for men and women in the United States and internationally. The company has a P/E ratio of seven, above the average consumer non-durables industry P/E ratio of 6.9 and below the S&P 500 P/E ratio of 17.7. Perry Ellis International has a market cap of $217 million and is part of the consumer goods sector and consumer non-durables industry. Shares are down 48.3% year to date as of the close of trading on Wednesday.

You can view the full Perry Ellis International Ratings Report or get investment ideas from our investment research center.
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