(Reuters) - Apparel retailer Perry Ellis International Inc (PERY.O) cut its full-year earnings forecast on anticipated costs related to the expansion of its distribution channels under a recent deal with Callaway Golf Co (ELY.N).
Shares of the Miami-based company were down 16 percent at $18.80 on Thursday, making it the second-biggest percentage loser on the Nasdaq. They fell as much as 20 percent earlier.
The company, which designs and distributes apparel, accessories and fragrances, cut its full-year estimate for per-share adjusted earnings by 20 cents to between $1.75 and $1.80.
In April, Perry Ellis assumed responsibility for Callaway’s distribution channels in the western hemisphere as part of an agreement to design, manufacture and distribute merchandise based on Callaway’s brands.
Perry Ellis said it expects the transition expenses related to the new Callaway distribution channels to hurt fiscal 2013 earnings by 15 cents per share.
The retailer also expects promotional activity in the fall season to dampen its full-year profit.
The company, which caters to retailers like Kohl’s Corp (KSS.N), Macy’s Inc (M.N) and Dillard’s Inc (DDS.N), also posted a lower-than-expected adjusted profit for the second quarter as promotions on its namesake and Rafaella brands hurt margins.
Perry Ellis earned 1 cent per share for the second quarter on an adjusted basis, missing analysts’ average estimate of 3 cents per share, according to Thomson Reuters I/B/E/S.
Net loss was $2.4 million, or 17 cents per share, compared with a profit of $1.8 million, or 11 cents per share, a year earlier.
Quarterly revenue at the company, whose brands include Axis, Cubavera and Laundry by Shelli Segal, fell 2.3 percent to $209.4 million, slightly above analysts’ average estimate of $208.6 million.
In February, Perry Ellis said it would review its brand portfolio to cut distribution and sourcing expenses, and focus on profitable businesses.
Reporting by Aditi Shrivastava and Maria Ajit Thomas in Bangalore; Editing by Sreejiraj Eluvangal