Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Perry Ellis International (Nasdaq: PERY) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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- PERY's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.61 is very high and demonstrates very strong liquidity.
- PERY, with its decline in revenue, underperformed when compared the industry average of 14.7%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ELLIS PERRY INTL INC's earnings per share declined by 29.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ELLIS PERRY INTL INC swung to a loss, reporting -$1.56 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus -$1.56).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, ELLIS PERRY INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ELLIS PERRY INTL INC is currently lower than what is desirable, coming in at 32.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.02% trails that of the industry average.