(Reuters) - Apparel maker Perry Ellis International Inc (PERY.O) posted lower third-quarter earnings, lagging market estimates for the first time in at least two years, and said it expects increased promotions to hurt the current quarter as well.
Shares of the Miami-based company fell about 30 percent in morning trade on Thursday, making the stock the top percentage loser on Nasdaq.
Many apparel companies have been trying to drive sales on higher discounts in a highly competitive retail sector.
Perry Ellis said it had to raise promotions in October and November as its namesake brand and Rafaella did not sell well.
The company bought Rafaella Apparel Group, known for its sports and workwear sold through department stores, in January to diversify its presence in the women’s apparel market.
For the full-year, the company expects an adjusted profit of $2.00 or above, on revenue of about $1 billion. Analysts were expecting it to earn $2.51 on revenue of $1.02 billion, according to Thomson Reuters I/B/E/S.
Perry Ellis said gross margins declined 240 basis points to 33.2 percent in August-October.
The retailer, whose brands include Laundry by Shelli Segal, Cubavera and Jantzen, earned $6.5 million, or 40 cents a share, compared with $7.2 million, or 51 cents a share, a year ago.
Revenue rose 23 percent to $248.4 million.
Analysts on average had expected earnings of 61 cents a share on revenue of $254.3 million.
Perry Ellis shares, which have lost more than a fifth of their value this year, were trading down at $14.81 on Nasdaq.
Reporting by Arpita Mukherjee in Bangalore; Editing by Don Sebastian