Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” ~~and~~ “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock is ~~15,498,000~~15,712,678 (as of ~~November 30, 2016)~~August 23, 2017).


	October 29,			January 30,
	2016			2016			July 29, 2017			January 28, 2017
ASSETS
Current Assets:
Cash and cash equivalents	$	29,824		$	31,902		$	23,812		$	30,695
Investments, at fair value		12,915			9,782			28,870			10,921
Accounts receivable, net		128,782			132,066			131,455			140,240
Inventories		112,266			182,750			131,197			151,251
Prepaid income taxes		1,788			1,818			—			1,647
Prepaid expenses and other current assets		8,217			8,461			6,819			6,462

Total current assets		293,792			366,779			322,153			341,216


Property and equipment, net		63,682			63,908			59,272			61,835
Other intangible assets, net		187,268			187,919			186,633			187,051
Deferred income tax		441			442			462			334
Other assets		2,355			2,927			2,226			2,269

TOTAL	$	547,538		$	621,975		$	570,746		$	592,705

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	43,786		$	103,684		$	69,358		$	92,843
Accrued expenses and other liabilities		25,577			26,497			25,906			20,861
Accrued interest payable		528			1,521			1,407			1,450
Accrued income taxes payable								1,334			—
Unearned revenues		3,494			4,213			3,579			2,710
Deferred pension obligation		6,904			12,107

Total current liabilities		80,289			148,022			101,584			117,864


Senior subordinated notes payable, net		49,637			49,528			49,744			49,673
Senior credit facility		37,837			61,758			—			22,504
Real estate mortgages		20,668			21,318			33,153			33,591
Unearned revenues and other long-term liabilities		18,917			14,853
Other long-term liabilities								19,358			18,271
Deferred income taxes		36,235			35,015			36,572			37,115

Total long-term liabilities		163,294			182,472			138,827			161,154

Total liabilities		243,583			330,494			240,411			279,018


Commitment and contingencies

Equity:
Preferred stock $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		—			—			—			—
Common stock $.01 par value; 100,000,000 shares authorized; 15,610,661 shares issued and outstanding as of October 29, 2016 and 15,409,310 shares issued and outstanding as of January 30, 2016		156			154
Common stock $.01 par value; 100,000,000 shares authorized; 15,762,678 shares issued and outstanding as of July 29, 2017 and 15,530,273 shares issued and outstanding as of January 28, 2017								158			155
Additional paid-in-capital		148,186			144,025			149,992			147,300
Retained earnings		167,330			161,810			190,077			176,327
Accumulated other comprehensive loss		(9,566	)		(14,508	)		(8,955	)		(10,095	)

Total		306,106			291,481			331,272			313,687
Treasury stock at cost; 113,935 shares as of October 29, 2016 and no shares as of January 30, 2016		(2,151	)		—

Treasury stock at cost; 50,000 as of July 29, 2017 and no shares as of January 28, 2017								(937	)		—

Total equity		303,955			291,481			330,335			313,687

TOTAL	$	547,538		$	621,975		$	570,746		$	592,705


	Three Months Ended					Nine Months Ended
	October 29,			October 31,		October 29,		October 31,
	2016			2015		2016		2015			Three Months Ended					Six Months Ended
											July 29, 2017		July 30, 2016			July 29, 2017		July 30, 2016
Revenues:
Net sales	$	185,298		$	196,447	$	629,514	$	659,342		$	198,394	$	193,341		$	432,217	$	444,216
Royalty income		8,661			8,992		27,392		25,810			8,215		8,312			16,482		18,731

Total revenues		193,959			205,439		656,906		685,152			206,609		201,653			448,699		462,947
Cost of sales		122,856			132,144		416,888		445,815			130,129		127,822			281,131		294,032

Gross profit		71,103			73,295		240,018		239,337			76,480		73,831			167,568		168,915

Operating expenses:
Selling, general and administrative expenses		72,846			64,869		215,434		202,731			68,412		72,654			139,611		142,588
Depreciation and amortization		3,534			3,383		10,717		10,151			3,496		3,716			6,964		7,183

Total operating expenses		76,380			68,252		226,151		212,882			71,908		76,370			146,575		149,771
Loss on sale of long-lived assets		—			—		—		(697	)

Operating (loss) income		(5,277	)		5,043		13,867		25,758
Costs of early extinguishment of debt		—			—		—		5,121
Operating income (loss)												4,572		(2,539	)		20,993		19,144
Interest expense		1,738			1,853		5,652		7,423			1,869		1,889			3,825		3,914

Net (loss) income before income taxes		(7,015	)		3,190		8,215		13,214
Income tax (benefit) provision		(1,850	)		917		2,695		2,811
Net income (loss) before income taxes												2,703		(4,428	)		17,168		15,230
Income tax provision (benefit)												1,724		(863	)		3,418		4,545

Net (loss) income	$	(5,165	)	$	2,273	$	5,520	$	10,403
Net income (loss)											$	979	$	(3,565	)	$	13,750	$	10,685


Net (loss) income per share:
Net income (loss) per share:
Basic	$	(0.34	)	$	0.15	$	0.37	$	0.70		$	0.06	$	(0.24	)	$	0.91	$	0.72

Diluted	$	(0.34	)	$	0.15	$	0.36	$	0.68		$	0.06	$	(0.24	)	$	0.90	$	0.71


Weighted average number of shares outstanding
Basic		14,991			15,148		14,920		14,948			15,075		14,953			15,042		14,882
Diluted		14,991			15,465		15,169		15,344			15,289		14,953			15,296		15,139


	Three Months Ended						Nine Months Ended
	October 29,			October 31,			October 29,			October 31,			Three Months Ended						Six Months Ended
	2016			2015			2016			2015			July 29, 2017			July 30, 2016			July 29, 2017			July 30, 2016
Net income (loss)	$	(5,165	)	$	2,273		$	5,520		$	10,403		$	979		$	(3,565	)	$	13,750		$	10,685
Other Comprehensive income (loss):
Other Comprehensive income:
Foreign currency translation adjustments, net		(2,342	)		(609	)		(3,772	)		482			1,273			(3,093	)		1,552			(1,430	)
Unrealized gain on pension liability, net of tax		8,142			135			8,452			405			—			155			—			310
Unrealized gain on forward contract		255			—			255			—
Unrealized gain (loss) on investments		(10	)		(1	)		7			(8	)
Unrealized loss on forward contract														(50	)		—			(412	)		—
Unrealized (loss) gain on investments														(6	)		10			—			17

Total other comprehensive income (loss)		6,045			(475	)		4,942			879			1,217			(2,928	)		1,140			(1,103	)

Comprehensive income	$	880		$	1,798		$	10,462		$	11,282
Comprehensive income (loss)													$	2,196		$	(6,493	)	$	14,890		$	9,582


	Nine Months Ended
	October 29,		October 31,
	2016		2015		Six Months Ended
					July 29, 2017		July 30, 2016
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	6,294	$	10,439	$	3,613	$	3,715

Income taxes	$	904	$	507	$	771	$	700


NON-CASH FINANCING AND INVESTING ACTIVITIES:
Accrued purchases of property and equipment	$	1,172	$	1,684	$	138	$	407

The accompanying unaudited condensed consolidated financial statements of Perry Ellis International, Inc. and subsidiaries (“Perry Ellis” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the requirements of the Securities and Exchange Commission on Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and changes in cash flows required by GAAP for annual financial statements. ~~The~~These condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January ~~30, 2016,~~28, 2017, filed with the Securities and Exchange Commission on April ~~14, 2016.~~10, 2017.

The information presented reflects all adjustments, which are in the opinion of management of a normal and recurring nature, necessary for a fair presentation of the interim periods. Results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire fiscal year.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” ASU No. 2014-09 clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”) that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. ASU No. 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Companies can choose to apply the ASU using either the full retrospective approach or a modified retrospective approach. The ~~Company is currently evaluating both methods of adoption and the impact, if any, that the~~ adoption of this ASU ~~will~~is not expected to have a material impact on the Company’s results of operations or the Company’s financial position.

~~In March 2015, the FASB issued ASU 2015-03, “~~~~Interest - Imputation of Interest (Subtopic 835-30)”~~, which is simplifying the Presentation of Debt Issuance Costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim periods beginning after December 15, 2015. The Company adopted the accounting standard in the first quarter of fiscal 2017. Prior to the adoption, debt issuance costs were classified as other assets. This presentation change was applied retrospectively to the condensed consolidated balance sheet and consequently, amounts related to debt issuance costs are presented as a direct deduction of the corresponding debt liability for all periods presented.

The effect on the condensed consolidating balance sheet as of January 30, 2016, as a result of this change in presentation, is a decrease of ($0.5) million in other assets, and a decrease of ($0.5) million in senior subordinated notes payable.

In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”, which requires inventory measured using any method other than last-in, first out (“LIFO”) or the retail inventory method to be subsequently measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Under this ASU, subsequent measurement of inventory using the LIFO and retail inventory method is unchanged. ASU 2015-11 is effective prospectively for fiscal years, and for interim periods within those years, beginning after December 15, 2016. Early application is permitted. The adoption, during the first quarter of fiscal 2018, of ASU No. 2015-11 isdid not ~~expected to~~ have a material impact on the Company’s results of operations or the Company’s financial position.

In February 2016, the FASB issued ASU No. 2016-02,~~“Leases~~ “Leases (Topic 842),”which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach, and early adoption is permitted. The Company is currently evaluating the effect that the adoption will have on its consolidated financial statements and related disclosures.

~~In March 2016, the FASB issued ASU No. 2016-07, “~~~~Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting,~~” which eliminates the requirement to retroactively adjust an investment that subsequently qualifies for equity method accounting (as a result of an increase in level of ownership interest or degree of influence) as if the equity method of accounting had been applied during all prior periods that the investment was held. The new standard requires that the investor add the cost of acquiring additional ownership interest in the investee to its current basis and prospectively adopt the equity method of accounting. Any unrealized gains or losses in an available-for-sale investment that subsequently qualifies as an equity method investment should be recognized in earnings at the date the investment qualifies as an equity method investment. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which is part of the FASB’s Simplification Initiative. The updated guidance simplifies the accounting for share-based payment transactions. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company ~~is currently evaluating~~adopted the ~~impact~~provisions of ASU 2016-09 in the first quarter of fiscal 2018 using a modified retrospective approach. For the three months ended April 29, 2017, the Company recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as a discrete item. Given the Company’s valuation allowance position, there was no net tax expense or benefit recognized as a result of the adoption of ASU 2016-09. Furthermore, there was no change to retained earnings with respect to excess tax benefits due to the Company’s valuation allowance position. The effect on the condensed consolidating statement of cash flows for the six months ended July 30, 2016, as a result of this ~~standard on its consolidated financial statements.~~adoption, is an increase of approximately $0.9 million in cash provided by operating activities, with a corresponding increase of approximately $0.9 million in cash used in financing activities from the previously reported amounts.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, which amends certain aspects of the FASB’s new revenue standard, ASU 2014-09, “Revenue from Contracts with Customers”,specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments clarify when promised goods or services are separately identifiable (i.e., distinct within the context of a contract), an important step in determining whether goods and services should be accounted for as separate performance obligations. In addition, the amendments allow entities to disregard goods or services that are immaterial in the context of a contract and provide an accounting policy election for accounting for certain shipping and handling activities. The amendments also clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property (IP), which will determine whether the entity recognizes revenue over time or at a point in time. The amendments revise the guidance to address how entities should apply the exception for sales- and usage-based royalties to licenses of IP, recognize revenue for licenses that are not separate performance obligations and evaluate different types of license restrictions (e.g., time-based, geography-based). The new guidance’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective. The ~~Company is currently evaluating the impact, if any, that the~~ adoption of this ASU ~~will~~is not expected to have a material impact on the Company’s results of operations or the Company’s financial position.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends certain aspects of the new revenue standard, ASU 2014-09,“Revenue from Contracts with Customers”. The amendments are intended to provide clarifying guidance in a few narrow areas such as collectability, contract modifications, completed contracts at transition, and non-cash considerations. The new guidance’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective. The ~~Company is currently evaluating the impact of the~~ adoption of this ~~standard~~ASU is not expected to have a material impact on ~~its consolidated~~the Company’s results of operations or the Company’s financial ~~statements.~~position.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which provides guidance for the accounting for credit losses on instruments within its scope. The amendments guide on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. The amendments require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments also require that credit losses

on available-for-sale debt securities be presented as an allowance. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those annual periods. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15,“Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force),” which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The amendments in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The Company is currently assessing the impact of the future adoption of this standard on its consolidated Statements of Cash Flows.

In October 2016, the FASB issued ASU No. 2016-16, ““Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which is intended to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This update removes the current exception in GAAP prohibiting entities from recognizing current and deferred income tax expenses or benefits related to transfer of assets, other than inventory, within the consolidated entity. The current exception to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. The amendments in this update are effective for public entities for annual reporting periods beginning after December 15, 2017. Early adoption is permitted and should be in the first interim period if an entity issues interim financial statements. The Company has chosen to early adopt the provisions of ASU 2016-16 in the first quarter of fiscal 2018. The adoption of ASU 2016-16 resulted in a decrease to prepaid income taxes of $1.7 million and a decrease to deferred tax liabilities of $1.7 million.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic718): Scope of Modification Accounting,” which amends the scope of modification accounting for share-based payment arrangements. This update provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The guidance is required to be applied prospectively to an award modified on or after the adoption date. The Company will apply this guidance to any future changes made to the terms or conditions, of share-based payment awards, after adoption. The adoption of this ASU is not expected to have a material impact on the Company’s results of operations or the Company’s financial position.

In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception,” which is intended to reduce the complexity of accounting for certain financial instruments with down round features and address the difficulty of accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently ~~assessing~~evaluating the impact of the ~~future~~ adoption of this standard on its consolidated financial statements.


	October 29,			January 30,
	2016			2016			July 29, 2017			January 28, 2017
	(in thousands)						(in thousands)
Trade accounts	$	143,033		$	144,708		$	144,757		$	151,370
Royalties		5,220			5,892			5,293			6,659
Other receivables		812			1,769			1,153			712

Total		149,065			152,369			151,203			158,741
Less: allowances		(20,283	)		(20,303	)		(19,748	)		(18,501	)

Total	$	128,782		$	132,066		$	131,455		$	140,240

Inventories are stated at the lower of cost (weighted moving average cost) or market. Cost principally consists of the purchase price, customs, duties, freight, and commissions to buying agents.


	July 29, 2017		January 28, 2017
	(in thousands)
Finished goods	$	131,197	$	151,251

The Company’s investments at July 29, 2017 and January 28, 2017 include marketable securities and certificates of deposit ~~at October 29, 2016 and January 30, 2016. Marketable securities are classified as available-for-sale and consist of corporate bonds~~ with maturity dates less than ~~two years. Certificates~~one year. Marketable securities consist of ~~deposit are classified as available-for-sale with $9.7 million with maturity dates within one year.~~corporate and government bonds. Investments are stated at fair value. The estimated fair value of the marketable securities is based on quoted prices in an active ~~market (Level 1 fair value measures).~~market.


			Gross		Gross			Estimated
	Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)									Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
										(in thousands)
Marketable securities	$	3,262	$	4	$	—		$	3,266	$	22,752	$	—	$	(11	)	$	22,741
Certificates of deposit		9,655		—		(6	)		9,649		6,130		—		(1	)		6,129

Total investments	$	12,917	$	4	$	(6	)	$	12,915	$	28,882	$	—	$	(12	)	$	28,870


			Gross		Gross			Estimated		Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	Cost		Unrealized Gains		Unrealized Losses			Fair Value		(in thousands)
	(in thousands)

Marketable securities										$	3,258	$	—	$	(8	)	$	3,250
Certificates of deposit	$	9,791	$	—	$	(9	)	$	9,782		7,675		—		(4	)		7,671

Total investments	$	9,791	$	—	$	(9	)	$	9,782	$	10,933	$	—	$	(12	)	$	10,921


	October 29,			January 30,
	2016			2016
	(in thousands)						July 29, 2017			January 28, 2017
							(in thousands)
Furniture, fixtures and equipment	$	90,141		$	84,634		$	94,973		$	91,639
Buildings and building improvements		20,660			19,462			21,295			21,359
Vehicles		523			523			537			523
Leasehold improvements		48,329			46,882			48,215			48,799
Land		9,430			9,430			9,430			9,430

Total		169,083			160,931			174,450			171,750
Less: accumulated depreciation and amortization		(105,401	)		(97,023	)		(115,178	)		(109,915	)

Total	$	63,682		$	63,908		$	59,272		$	61,835

The above table of property and equipment includes assets held under capital leases as of:


	October 29,			January 30,
	2016			2016			July 29, 2017			January 28, 2017
	(in thousands)						(in thousands)
Furniture, fixtures and equipment	$	810		$	810		$	810		$	810
Less: accumulated depreciation and amortization		(384	)		(182	)		(587	)		(452	)

Total	$	426		$	628		$	223		$	358

For the three months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015,~~July 30, 2016, depreciation and amortization expense relating to property and equipment amounted to ~~$3.5~~$3.4 million and ~~$3.4~~$3.6 million, respectively. For the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015,~~July 30, 2016, depreciation and amortization expense relating to property and equipment amounted to ~~$10.4~~$6.7 million and ~~$10.0~~$6.9 million, respectively. These amounts include amortization expense for leased property under capital leases.

Trademarks included in other intangible assets, net, are considered indefinite-lived ~~intangible~~ assets and totaled $184.1 million at ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016.~~

On March 19, 2015, the Company entered into an agreement to sell the intellectual property of its C&C California brand to a third party. The sales price was $2.5 million, which was collected during the first quarter of fiscal 2016. In connection with this transaction, the Company recorded a loss of ($0.7) million in the licensing segment.28, 2017.


	October 29,			January 30,
	2016			2016			July 29, 2017			January 28, 2017
	(in thousands)						(in thousands)
Customer lists	$	8,450		$	8,450		$	8,450		$	8,450
Less: accumulated amortization		(5,328	)		(4,677	)		(5,962	)		(5,545	)

Total	$	3,122		$	3,773		$	2,488		$	2,905

For the three months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015,~~July 30, 2016, amortization expense relating to customer lists amounted to ~~$0.3~~approximately $0.2 million for each of the periods. For the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015,~~July 30, 2016, amortization expense relating to customer lists amounted to ~~$0.7~~$0.4 million for each of the periods. Other intangible assets are amortized over their estimated useful lives of 10 years. Assuming no impairment, the table sets forth the estimated amortization expense for future periods based on recorded amounts as of January ~~30, 2016:~~28, 2017:


	(in thousands)		(in thousands)

2017	$	868
2018	$	835	$	835
2019	$	793	$	793
2020	$	734	$	734
2021	$	543	$	543

Borrowings and availability under letter of credit facilities consisted of the following as of:

~~During the third quarter of fiscal 2017, one letter of credit facility totaling $0.3 million, utilized by the Company’s United Kingdom subsidiary, expired and has not been renewed.~~

The Company’s accounting policy relating to advertising and related costs is to expense these costs in the period incurred. Advertising and related costs were approximately ~~$4.2~~$3.8 million and ~~$4.1~~$3.7 million for the three months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015,~~July 30, 2016, respectively, and ~~$12.2~~$7.8 million and ~~$11.1~~$8.0 million for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015,~~July 30, 2016, respectively, and are included in selling, general and administrative expenses.

Basic net income (loss) ~~income~~ per share is computed by dividing net income (loss) ~~income~~ by the weighted average shares of outstanding common stock. The calculation of diluted net income (loss) per share is similar to basic earnings per share except that the denominator includes potentially dilutive common stock. The potentially dilutive common stock included in the Company’s computation of diluted net income per share includes the effects of stock options, stock appreciation rights (“SARS”), and unvested restricted shares as determined using the treasury stock method.

The following table sets forth the computation of basic and diluted income (loss) ~~income~~ per share:


	Three Months Ended					Nine Months Ended
	October 29,			October 31,		October 29,		October 31,		Three Months Ended					Six Months Ended
	2016			2015		2016		2015		July 29, 2017		July 30, 2016			July 29, 2017		July 30, 2016
	(in thousands, except per share data)									(in thousands, except per share data)
Numerator:
Net (loss) income	$	(5,165	)	$	2,273	$	5,520	$	10,403
Net income (loss)										$	979	$	(3,565	)	$	13,750	$	10,685

Denominator:
Basic-weighted average shares		14,991			15,148		14,920		14,948		15,075		14,953			15,042		14,882
Dilutive effect: equity awards		—			317		249		396		214		—			254		257

Diluted-weighted average shares		14,991			15,465		15,169		15,344		15,289		14,953			15,296		15,139

Basic income (loss) per share										$	0.06	$	(0.24	)	$	0.91	$	0.72

Basic (loss) income per share	$	(0.34	)	$	0.15	$	0.37	$	0.70

Diluted (loss) income per share	$	(0.34	)	$	0.15	$	0.36	$	0.68

Diluted income (loss) per share										$	0.06	$	(0.24	)	$	0.90	$	0.71

Antidilutive effect:⁽¹⁾		1,015			530		532		693		404		1,103			398		604


	Changes in Equity			Changes in Equity
	(in thousands)			(in thousands)
Equity at January 30, 2016	$	291,481

Equity at January 28, 2017				$	313,687
Comprehensive income		10,462			14,890
Share transactions under employee equity compensation plans		4,163			2,695
Purchase of treasury stock		(2,151	)		(937	)

Equity at October 29, 2016	$	303,955
Equity at July 29, 2017				$	330,335


Equity at January 31, 2015	$	302,017

Equity at January 30, 2016				$	291,481
Comprehensive income		11,282			9,582
Share transactions under employee equity compensation plans		3,809			2,845

Equity at October 31, 2015	$	317,108
Equity at July 30, 2016				$	303,908

~~During the third quarter of fiscal 2017, the~~The Board of Directors ~~extended the stock repurchase program to authorize~~has authorized the Company to purchase, from time to time and as market and business conditions ~~warranted,~~warrant, up to $70 million of ~~the Company’s~~our common stock for cash in the open market or in privately negotiated transactions through October 31, 2017. Although ~~the~~The Board of Directors allocated a maximum of $70 million to carry out the program, the Company is not obligated to purchase any specific number of outstanding shares and ~~will reevaluate~~reevaluates the program on an ongoing basis. ~~Total purchases under the plan life-to-date amount to $60.8 million.~~

During the ~~third~~second quarter of fiscal ~~2017,~~2018, the Company repurchased 50,000 shares of ~~its~~ common stock at a cost of ~~$2.2~~$0.9 million. There were no treasury shares outstanding as of January ~~30, 2016. During~~28, 2017. Total purchases under the ~~second quarter of fiscal 2016, the Company retired 770,753 shares of treasury stock recorded at a cost of~~plan to date amount to approximately ~~$15.7~~$61.7 million. ~~Accordingly, during the second quarter of fiscal 2016, the Company reduced common stock and additional paid in capital by $7,000 and $15.7 million, respectively.~~

Changes in accumulated other comprehensive loss by component, net of ~~tax, are as follows:~~tax:

Unrealized Foreign Unrealized
(Loss) Gain on Currency Translation (Loss) Gain on
Pension Liability Adjustments, Net Investments Total
(in thousands)
Balance, January 31, 2015
$ (8,085 ) $ (4,774 ) $ 7    $ (12,852 )
Other comprehensive loss (income) before reclassifications
—      482    (8 ) 474
Amounts reclassified from accumulated other comprehensive loss
405    —      —      405

Balance, October 31, 2015
$ (7,680 ) $ (4,292 ) $ (1 ) $ (11,973 )

A summary of the impact on the condensed consolidated statements of operations line items is as follows:

The Company has a risk management policy to manage foreign currency risk relating to inventory purchases by its subsidiaries that are denominated in foreign currencies. As such, the Company may employ hedging and derivative strategies to limit the effects of changes in foreign currency on its operating income and cash flows. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. The Company achieves this by closely matching the notional amount, term and conditions of the derivative instrument with the underlying risk being hedged. The Company does not use derivative instruments for trading or speculative purposes.

For derivatives that will be accounted for as hedging instruments, the Company formally designates and documents at inception the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, the Company will formally assess at least quarterly whether the financial instruments used in hedging are “highly effective” at offsetting changes in cash flows of the related underlying exposures. For purposes of assessing hedge effectiveness, the Company uses the forward method, and assesses effectiveness based on the changes in both spot and forward points of the hedging instrument. If and when a derivative is no longer expected to be “highly effective,” hedge accounting is discontinued and hedge ineffectiveness, if any, is included in current period earnings. As of ~~October~~July 29, ~~2016,~~2017, there was no hedge ineffectiveness.

The Company’s United Kingdom subsidiary is exposed to foreign currency risk from inventory purchases. In order to mitigate the financial risk of settlement of inventory at various prices based on movement of the U.S.

dollar against the British pound, the Company entered into foreign currency forward exchange contracts (the “Hedging Instruments”) ~~in October 2016.~~. These are formally designated and “highly effective” as cash flow hedges. The Company will hedge approximately 45% of its U.S. dollar denominated purchases. All changes in the Hedging Instruments’ fair value associated with inventory purchases are recorded in equity as a component of accumulated other comprehensive income until the underlying hedged item is reclassified to earnings. The Company records the foreign currency forward exchange contracts at fair value in its Consolidated Balance Sheets. The cash flows from derivative instruments that are designated as cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. The Company considers the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. The Company classifies derivative instrument cash flows from hedges of foreign currency risk on the settlement of inventory as operating activities.

The Company’s Hedging Instruments were classified within Level 2 of the fair value hierarchy. The following table summarizes the effects, fair value and balance sheet classification of the Company’s Hedging Instruments.


		October 29,		January 30,
Derivatives Designated As Hedging Instruments	Balance sheet location	2016		2016			Balance sheet location	July 29, 2017		January 28, 2017
		(in thousands)
								(in thousands)
Foreign currency forward exchange contract (inventory purchases)	Other Current Assets	$	255	$	—		Accounts Payable	$	593	$	181

Total		$	255	$	—	Total		$	593	$	181

~~At October 29, 2016,~~The following table summarizes the effect and classification of the Company’s Hedging Instruments.

The notional ~~amount~~amounts outstanding of foreign exchange forward contracts ~~is $5.7 million.~~were $15.1 million and $15.0 million at July 29, 2017 and January 28, 2017, respectively. Such contracts expire ~~between October 2016 and March 2017. There were no outstanding Hedging Instruments at January 30, 2016.~~through July 2018.

~~At October 29, 2016, accumulated~~Accumulated other comprehensive ~~income~~loss included a ~~$255 thousand~~ net deferred ~~gain~~loss for Hedging Instruments ~~that are expected to be reclassed during~~in the ~~next 12 months.~~amount of $0.6 million and $0.2 million at July 29, 2017 and January 28, 2017, respectively. The net deferred ~~gain~~loss will be reclassified from accumulated other comprehensive ~~income~~loss to costs of goods sold during the next twelve months when the inventory is sold.

~~No gains or losses relating to Hedging Instruments were reclassified to earnings during any of the fiscal periods presented.~~

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company’s U.S. federal income tax returns for fiscal 2011 through fiscal ~~2016~~2018 are open tax years. The Company’s state tax filings are subject to varying statutes of limitations. The Company’s unrecognized state tax benefits are related to open tax years from fiscal ~~2005~~2006 through fiscal 2017, depending on each state’s particular statute of ~~limitations.~~limitation. As of ~~October~~July 29, ~~2016,~~2017, the ~~fiscal 2011, 2012 and 2013 U.S. federal income tax returns are under~~ examination ~~as well as various state, local, and foreign income tax returns,~~ by ~~various taxing authorities.~~

The Company has a $1.1 million liability recorded for unrecognized tax benefits as of January 30, 2016, which includes interest and penalties of $0.2 million. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. All of the unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate. During the three months and nine months ended October 29, 2016, the total amount of unrecognized tax benefits decreased by approximately $13,000 and increased by $75,000, respectively. The change to the total amount of the unrecognized tax benefitInternal Revenue Service for the ~~three and nine months ended October 29, 2016 included a decrease in interest and penalties of approximately $11,000 and an increase of $30,000, respectively.~~

The Company does not currently anticipate a resolution within the next twelve months for any of the remaining unrecognized tax benefits as of October 29, 2016. The statute of limitations related to the Company’s

~~fiscal~~ 2011, 2012, and 2013 U.S. federal tax years ~~has been extended as part of the examination and~~ is ~~not expected to lapse within the next twelve months.~~still ongoing. During ~~the three months ended October 29, 2016,~~fiscal 2017, the Company received a Notice of Proposed Adjustment from the Internal Revenue Service, which proposed adjustments to taxable income for fiscal 2011, 2012 and 2013 of $6.1 million, $5.3 million and $6.8 million, respectively. ~~The~~During the three months ended July 29, 2017, the Company engaged in further conversations with the Internal Revenue Service concerning the proposed adjustments. Based upon those conversations, the Company has ~~not~~ established ~~uncertain tax position reserves related~~a reserve of $1 million for the amount it would be willing to ~~this matter as~~pay to settle the issue. While the Company still believes its ~~positions are highly certain to~~position would be sustained upon appeal or, if necessary, through ~~litigation.~~litigation, it has made this determination based upon the desire to reach an ultimate resolution and limit the costs associated with continuing the examination. Furthermore, various other state and local income tax returns are also under examination by taxing authorities.

The Company has a $1.2 million liability recorded for unrecognized tax benefits as of January 28, 2017, which includes interest and penalties of $0.3 million. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the three and six months ended July 29, 2017, the total amount of unrecognized tax benefits increased by approximately $5.0 million and $5.0 million, respectively. The change to the total amount of the unrecognized tax benefit for the three and six months ended July 29, 2017 included an increase in interest and penalties of approximately $171,000 and $187,000, respectively. The amount of the unrecognized tax benefits, if recognized, that would affect the Company’s effective tax rate as of January 28, 2017 and July 29, 2017 is $1.2 million and $2.3 million, respectively.

The Company currently anticipates a resolution within the next twelve months for the unrecognized tax benefits relating to the Internal Revenue Service Proposed Adjustment, but does not currently anticipate a resolution for any of the remaining unrecognized tax benefits as of July 29, 2017. The statute of limitations related to the Company’s fiscal 2011, 2012, 2013, and 2014 U.S. federal tax years has been extended as part of the examination and is expected to lapse within the next twelve months.

At the end of fiscal ~~2016,~~2017, the Company maintained a ~~$46.2~~$38.6 million valuation allowance against its remaining domestic deferred tax asset; including, but not limited to, the federal net operating loss ~~carryforwards~~carryforward and the U.S. state net operating loss carryforwards, whose utilization ~~of which are~~is not restricted by factors beyond the Company’s control. The establishment of valuation allowances and ~~the developments~~development of projected annual effective tax rates requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. An accumulation of recent pretax losses is considered strong negative evidence in that evaluation. Although the Company recognized pretax earnings through the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017, by itself that does not represent sufficient positive evidence that ~~its~~a deferred tax asset will be realized to warrant removing the valuation allowances established against the U.S. deferred tax assets. Additionally, the Company’s cumulative domestic pretax results for the past 36 months still remain in a loss position. The Company would be able to remove the valuation allowances in future periods when positive evidence outweighs the negative evidence from the relevant look-back period. Deferred tax assets without valuation allowances remain in certain foreign tax jurisdictions, where supported by the evidence.

In 2005, the Company adopted the 2005 Long-Term Incentive Compensation Plan (the “2005 Plan”). The 2005 Plan allowed the Company to grant options and other awards to purchase or receive up to an aggregate of 2,250,000 shares of the Company’s common stock, reduced by any awards outstanding under the 2002 Plan. On March 13, 2008, the Board of Directors unanimously adopted an amendment and restatement of the 2005 Plan that increased the number of shares available for grants to an aggregate of 4,750,000 shares of common stock. On March 17, 2011, the Board of Directors unanimously adopted the second amendment and restatement of the 2005 Plan, which increased the number of shares available for grants by an additional 500,000 shares to an aggregate of 5,250,000 shares of common stock. On May 20, 2015, the Board of Directors unanimously adopted, subject to shareholder approval at the annual meeting, the Perry Ellis International, Inc. 2015 Long Term Incentive Compensation Plan, which is an amendment and restatement of the 2005 Plan (the “2015 Plan, and collectively with the 2002 Plan and the prior 2005 Plan, as amended, the “Stock Plans”). The amendment was approved by the shareholders at the Company’s 2015 annual meeting.

The 2015 Plan extends the term of the 2005 Plan until July 17, 2025 as well as increases the number of shares of common stock reserved for issuance by an additional 1,000,000 shares to an aggregate of 6,250,000 shares.

On March 16, 2017, the Board of Directors unanimously adopted an amendment and restatement of the 2015 Plan (as amended and restated, the “Amended Plan”). The Amended Plan increases the number of shares available for grants by an additional 1,400,000 shares to an aggregate of 7,650,000 shares of common stock and makes other clarifications and technical revisions designed primarily to improve administration and ensure compliance with recent changes in the law including Internal Revenue Code Section 409A. Other than the amendments noted above, the Amended Plan generally contains the same features, terms and conditions as the 2015 Plan. The amendment was approved by the shareholders at the Company’s 2017 annual meeting.

During the first ~~second~~ and ~~third~~second quarters of fiscal ~~2017,~~2018, the Company granted an aggregate of ~~86,173, 14,914~~72,307 and ~~3,000~~10,681 shares of restricted stock to certain key employees, which vest primarily over a three-year period, at an estimated value of ~~$1.6 million, $0.3~~$1.5 million and ~~$0.06~~$0.2 million, respectively. This value is being recorded as compensation expense on a straight-line basis over the vesting period of the restricted stock.

Also, during the second quarter of fiscal ~~2017,~~2018, the Company awarded to ~~six~~five directors an aggregate of ~~31,902~~28,995 shares of restricted stock. The restricted stock ~~awarded~~ vests primarily over a one-year period, at an estimated value of ~~$0.7~~$0.6 million. This value is being recorded as compensation expense on a straight-line basis over the vesting period of the restricted stock.

During the first quarter of fiscal ~~2017,~~2018, the Company granted ~~performance-based~~performance based restricted stock to certain key employees. Such stock generally vests 100% in April ~~2019,~~2020, provided that each employee is still an employee of the Company on such date, and ~~that~~ the Company has met certain performance criteria. A total of ~~184,004~~154,401 shares of performance-based restricted stock were issued at an estimated value of ~~$3.5~~$3.3 million.

During the first quarter of fiscal 2018, the Company granted an aggregate of 10,953 shares of restricted stock units to a key employee, that vest primarily over a three-year period, at an estimated value of $0.2 million. This value is being recorded as compensation expense on a straight-line basis over the vesting period of the restricted stock.

During the first and second quarters of fiscal ~~2017,~~2018, a total of ~~159,862~~77,655 and ~~11,343~~31,448 shares of restricted stock vested, of which ~~46,000~~25,241 and ~~3,105~~11,259 shares were withheld to cover the employees’ statutory income tax ~~requirements.~~requirements, respectively. The estimated value of the withheld shares was ~~$880,000~~$0.5 million and ~~$60,000,~~$0.2 million, respectively.

The Company has four reportable segments: Men’s Sportswear and Swim, Women’s Sportswear, Direct-to-Consumer and Licensing. The Men’s Sportswear and Swim and Women’s Sportswear segments derive revenues from the design, import and distribution of apparel to department stores and other retail outlets, principally throughout the United States. The Direct-to-Consumer segment derives its revenues from the sale of the Company’s branded and licensed products through the Company’s retail stores and e-commerce platforms. The Licensing segment derives its revenues from royalties associated from the use of the Company’s brand names, principally Perry Ellis, Original Penguin, Laundry, Gotcha, Pro Player, Farah, Ben Hogan, and John Henry.

The Company allocates certain corporate selling, general and administrative expenses based primarily on the revenues generated by the segments.

   Three Months Ended    Nine Months Ended
   October 29,    October 31,    October 29,    October 31,
   2016    2015    2016    2015
   (in thousands)
Revenues:

Men’s Sportswear and Swim
   $ 135,717       $ 141,512       $ 478,790       $ 490,453
Women’s Sportswear
   28,676       33,421       85,301       102,126
Direct-to-Consumer
   20,905       21,514       65,423       66,763
Licensing
   8,661       8,992       27,392       25,810








Total revenues
   $ 193,959       $ 205,439       $ 656,906       $ 685,152








Depreciation and amortization:

Men’s Sportswear and Swim
   $ 1,814       $ 1,771       $ 5,717       $ 5,509
Women’s Sportswear
   729       589       2,107       1,655
Direct-to-Consumer
   932       976       2,717       2,851
Licensing
   59       47       176       136








Total depreciation and amortization
   $ 3,534       $ 3,383       $ 10,717       $ 10,151








Operating (loss) income:

Men’s Sportswear and Swim⁽¹⁾
   $ (7,683 )    $ 2,392       $ 6,834       $ 14,544
Women’s Sportswear
   (1,289 )    (109 )    (4,746 )    222
Direct-to-Consumer
   (3,370 )    (4,038 )    (9,675 )    (8,051 )
Licensing⁽²⁾
   7,065       6,798       21,454       19,043








Total operating (loss) income
   $ (5,277 )    $ 5,043       $ 13,867       $ 25,758
Costs on early extinguishment of debt
   —         —         —         5,121
Total interest expense
   1,738       1,853       5,652       7,423








Total net (loss) income before income taxes
   $ (7,015 )    $ 3,190       $ 8,215       $ 13,214

The Company ~~sponsors a~~sponsored two qualified pension plans as a result of the Perry Ellis Menswear acquisition that occurred in June 2003. The plans were frozen and merged as of December 31, 2003.

During fiscal 2015, the Board of Directors resolved to terminate the pension plan. As of January 28, 2017, the Company satisfied the regulatory requirements prescribed by the Internal Revenue Service and the Pension Benefit Guaranty Corporation, and the distribution of plan assets was completed.

The following table provides the components of net benefit cost for the plan during the three and ~~nine~~six months ~~ended~~of fiscal ~~2017~~2018 and ~~2016:~~2017:

Settlement accounting, which accelerates recognition of a plan’s unrecognized net gain or loss, is triggered if the lump sums paid during a year exceed the sum of the plan’s service and interest cost. Since the lump sums paid or expected to be paid in Fiscal 2017 exceed that threshold, the Company recognized a settlement charge of $8.3 million in anticipation of the plan’s termination in fiscal 2017.


	Three Months Ended					Six Months Ended
	July 29, 2017		July 30, 2016			July 29, 2017		July 30, 2016
	(in thousands)
Service cost	$	—	$	63		$	—	$	126
Interest cost		—		124			—		248
Expected return on plan assets		—		(87	)		—		(174	)
Amortization of net gain		—		155			—		310

Net periodic benefit cost	$	—	$	255		$	—	$	510

~~In March 2011, the Company issued $150 million 7~~⁷⁄₈~~% senior subordinated notes, due April 1, 2019. The proceeds of this offering were used to retire the $150 million 8~~⁷⁄₈% senior subordinated notes due September 15, 2013 and to repay a portion of the outstanding balance on the senior credit facility. The proceeds to the Company were $146.5 million yielding an effective interest rate of 8.0%.

~~On April 6, 2015, the Company elected to call for the partial redemption of $100 million of its $150 million 7~~⁷⁄₈% senior subordinated notes due 2019 and a notice of redemption was sent to all registered holders of the senior subordinated notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, the Company completed the redemption of the $100 million of its senior subordinated notes. The Company incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption, including the redemption premium as well as the write-off of note issuance costs. At October 29, 2016, the balance of the 7⁷⁄₈~~% senior subordinated notes totaled $49.6 million, net of debt issuance cost in the amount of $0.4 million. At January 30, 2016, the balance of the 7~~⁷⁄₈~~% senior subordinated notes totaled $49.5 million, net of debt issuance cost in the amount of $0.5 million.~~

~~Certain Covenants.~~The indenture governing the senior subordinated notes contains certain covenants which restrict the Company’s ability and the ability of its subsidiaries to, among other things, incur additional indebtedness in certain circumstances, pay dividends or make other distributions on, redeem or repurchase capital stock, make investments or other restricted payments, create liens on assets to secure debt, engage in transactions with affiliates, and effect a consolidation or merger. The Company is not aware of any non-compliance with any of its covenants in this indenture. The Company could be materially harmed if it violates any covenants because the indenture’s trustee could declare the outstanding notes, together with accrued interest, to be immediately due and payable, which the Company may not be able to satisfy. In addition, a violation could also constitute a cross-default under the senior credit facility, the letter of credit facilities and the real estate mortgages resulting in all of the Company’s debt obligations becoming immediately due and payable, which the Company may not be able to satisfy.

On April 22, 2015, the Company amended and restated its existing senior credit facility (the “Credit Facility”), with Wells Fargo Bank, National Association, as agent for the lenders, and Bank of America, N.A., as syndication agent. The Credit Facility provides a revolving credit facility of up to an aggregate amount of $200 million. The Credit Facility has been extended through April 30, 2020 (“Maturity Date”). In connection with this amendment and restatement, the Company paid fees in the amount of $0.6 million. These fees will be amortized over the term of the credit facility as interest expense. At October 29, 2016, The Company had outstanding borrowings of $37.8 million under the Credit Facility. At January 30, 2016, the Company had outstanding borrowings of $61.8 million, under the Credit Facility.

~~Certain Covenants~~. The Credit Facility contains certain financial and other covenants, which, among other things, require the Company to maintain a minimum fixed charge coverage ratio if availability falls below certain thresholds. The Company is not aware of any non-compliance with any of its covenants in this Credit Facility. These covenants may restrict its ability and the ability of its subsidiaries to, among other things, incur additional indebtedness and liens in certain circumstances, redeem or repurchase capital stock, make certain investments or sell assets. The Company may pay cash dividends subject to certain restrictions set forth in the covenants including, but not limited to, meeting a minimum excess availability threshold and no occurrence of a default. The Company could be materially harmed if it violates any covenants, as the lenders under the Credit Facility could declare all amounts outstanding, together with accrued interest, to be immediately due and payable. If the Company is unable to repay those amounts, the lenders could proceed against its assets and the assets of its subsidiaries that are borrowers or guarantors. In addition, a covenant violation that is not cured or waived by the lenders could also constitute a cross-default under certain of its other outstanding indebtedness, such as the indenture relating to its 7⁷⁄₈% senior subordinated notes due April 1, 2019, its letter of credit facilities, or its real estate mortgage loans. A cross-default could result in all of the Company’s debt obligations becoming immediately due and payable, which it may not be able to satisfy. Additionally, the Credit Facility includes a subjective acceleration clause if a “material adverse change” in the Company’s business occurs. The Company believes that the likelihood of the lender exercising this right is remote.

~~Borrowing Base.~~ Borrowings under the Credit Facility are limited to a borrowing base calculation, which generally restricts the outstanding balance to the sum of (a) 87.5% of eligible receivables plus (b) 87.5% of eligible foreign accounts up to $1.5 million plus (c) the lesser of (i) the inventory loan limit, which equals 80% of the maximum credit under the Credit Facility at the time, (ii) a maximum of 70.0% of eligible finished goods inventory with an inventory limit not to exceed $125 million, or 90.0% of the net recovery percentage (as defined in the Credit Facility) of eligible inventory.

~~Interest.~~ Interest on the outstanding principal balance drawn under the Credit Facility accrues at the prime rate and at the rate quoted by the agent for Eurodollar loans. The margin adjusts quarterly, in a range of 0.50% to 1.00% for prime rate loans and 1.50% to 2.00% for Eurodollar loans, based on the previous quarterly average of excess availability plus excess cash on the last day of the previous quarter.

~~Security~~. As security for the indebtedness under the Credit Facility, the Company granted to the lenders a first priority security interest (subject to liens permitted under the Credit Facility to be senior thereto) in substantially all of its existing and future assets, including, without limitation, accounts receivable, inventory, deposit accounts, general intangibles, equipment and capital stock or membership interests, as the case may be, of certain subsidiaries, and real estate but excluding its non-U.S. subsidiaries and all of its trademark portfolio.

Accounts receivable, accounts payable, accrued interest payable and accrued expenses. The carrying amounts reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments.

Investments. (classified within Level 12 of the valuation hierarchy)—The carrying amounts of the available-for-sale investments are measured at fair value on a recurring basis in the consolidated balance sheets.

Real estate mortgages. (classified within Level 2 of the valuation hierarchy)—The carrying amounts of the real estate mortgages were approximately ~~$21.4~~$34.0 million and ~~$22.0~~$34.5 million at ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016,~~28, 2017, respectively. The carrying values of the real estate mortgages at ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016,~~28, 2017, approximate their fair values since the interest rates approximate ~~market rates.~~market.

Senior credit facility. The carrying amount of the senior credit facility approximates fair value due to the frequent resets of its floating interest rate.

Senior subordinated notes payable. (classified within Level 12 of the valuation hierarchy) - —The carrying amounts of the 7⁷⁄/₈% senior subordinated notes payable were approximately ~~$49.6 million and $49.5~~$49.7 million at ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016, respectively.~~28, 2017. The fair value of the 7⁷⁄/₈% senior subordinated notes payable was approximately ~~$50.3~~$50.2 million and ~~$49.0~~$50.1 million as of ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016,~~28, 2017, respectively, based on quoted market prices.

See footnote 13 to the consolidated financial statements for disclosure of the fair value and line item caption of derivative instruments recorded in the consolidated balance sheets.

These estimated fair value amounts have been determined using available market information and appropriate valuation methods.

On April 20, 2016, the Company entered into an employment agreement with George Feldenkreis, the Company’s Executive Chairman. The term of the employment agreement shall continue until Mr. Feldenkreis’ death or termination of the employment agreement by the Company or Mr. Feldenkreis. He will be paid a base salary of not less than $750,000 per year during the term of employment and, among other things, a lump sum payment of $1.0 million upon the termination of his employment in most circumstances. Additionally, he is entitled to participate in the Company’s incentive compensation plans. In connection with the terms of this new employment agreement, the Company accelerated the expense recognition related to Mr. Feldenkreis’ outstanding cash incentive and stock based compensation awards. The impact of the acceleration was a $4.2 million charge during the second quarter of fiscal 2017 to selling, general and administrative expenses.

On April 20, 2016, the Company entered into an employment agreement with Oscar Feldenkreis, the Company’s Vice Chairman of the Board of Directors, Chief Executive Officer and President. The term of the employment agreement ends on February 2, 2019. Pursuant to the employment agreement, he will be paid a base salary of not less than $1,350,000 per year during the term of his employment with the Company. Additionally, he is entitled to participate in the Company’s incentive compensation plans.

The Company and several of its subsidiaries (the “Guarantors”) have fully and unconditionally guaranteed the senior subordinated notes payable on a joint and several basis. These guarantees are subject to release in limited circumstances (only upon the occurrence of certain customary conditions). The following are condensed consolidating financial statements, which present, in separate columns: Perry Ellis International, Inc., (Parent Only), the Guarantors on a combined, or where appropriate, consolidated basis, and the Non-Guarantors on a combined, or where appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016~~28, 2017 and for the three and ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015.~~July 30, 2016. The combined Guarantors are 100% owned subsidiaries of Perry Ellis International, Inc., and have fully and unconditionally guaranteed the senior subordinated notes payable on a joint and several basis.

The Company adopted the provisions of ASU 2016-09 in the first quarter of fiscal 2018 and the change was retrospectively applied to the condensed consolidating financial statements for all periods presented. The effect on the condensed consolidating statement of cash flows, as a result of the adoption, is an increase of approximately $0.9 million in cash provided by operating activities to the guarantor subsidiaries for the six months ended July 30, 2016, with a corresponding increase in cash used in financing activities to the guarantor for the respective periods from the previously reported amounts.


	Parent Only		Guarantors		Non- Guarantors		Eliminations			Consolidated		Parent Only		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS

Current Assets:
Cash and cash equivalents	$	—	$	4,239	$	25,585	$	—		$	29,824	$	—	$	8,229	$	15,583	$	—		$	23,812
Investment, at fair value		—		—		12,915		—			12,915		—		—		28,870		—			28,870
Accounts receivable, net		—		104,580		24,202		—			128,782		—		103,110		28,345		—			131,455
Intercompany receivable, net		82,241		—		—		(82,241	)		—		89,162		—		—		(89,162	)		—
Inventories		—		96,480		15,786		—			112,266		—		107,531		23,666		—			131,197
Prepaid income taxes		1,643		—		—		145			1,788
Prepaid expenses and other current assets		—		7,219		998		—			8,217		—		5,978		841		—			6,819

Total current assets		83,884		212,518		79,486		(82,096	)		293,792		89,162		224,848		97,305		(89,162	)		322,153


Property and equipment, net		—		61,425		2,257		—			63,682		—		56,722		2,550		—			59,272
Other intangible assets, net		—		154,936		32,332		—			187,268		—		154,301		32,332		—			186,633
Deferred income taxes		—		—		441		—			441		—		—		462		—			462
Investment in subsidiaries		270,236		—		—		(270,236	)		—		292,983		—		—		(292,983	)		—
Other assets		—		1,879		476		—			2,355		—		1,641		585		—			2,226

TOTAL	$	354,120	$	430,758	$	114,992	$	(352,332	)	$	547,538	$	382,145	$	437,512	$	133,234	$	(382,145	)	$	570,746


LIABILITIES AND EQUITY

Current Liabilities:
Accounts payable	$	—	$	39,330	$	4,456	$	—		$	43,786	$	—	$	56,906	$	12,452	$	—		$	69,358
Accrued expenses and other liabilities		—		20,804		4,773		—			25,577		—		19,930		5,976		—			25,906
Accrued interest payable		528		—		—		—			528		1,407		—		—		—			1,407
Income taxes payable		—		623		928		(1,551	)		—		659		583		92		—			1,334
Unearned revenues		—		2,835		659		—			3,494		—		3,074		505		—			3,579
Deferred pension obligation		—		6,863		41		—			6,904
Intercompany payable, net		—		75,929		17,826		(93,755	)		—		—		76,594		18,999		(95,593	)		—

Total current liabilities		528		146,384		28,683		(95,306	)		80,289		2,066		157,087		38,024		(95,593	)		101,584


Senior subordinated notes payable, net		49,637		—		—		—			49,637		49,744		—		—		—			49,744
Senior credit facility		—		37,837		—		—			37,837
Real estate mortgages		—		20,668		—		—			20,668		—		33,153		—		—			33,153
Unearned revenues and other long-term liabilities		—		18,728		189		—			18,917		—		19,074		284		—			19,358
Deferred income taxes		—		34,539		—		1,696			36,235		—		36,572		—		—			36,572

Total long-term liabilities		49,637		111,772		189		1,696			163,294		49,744		88,799		284		—			138,827


Total liabilities		50,165		258,156		28,872		(93,610	)		243,583		51,810		245,886		38,308		(95,593	)		240,411


Total equity		303,955		172,602		86,120		(258,722	)		303,955		330,335		191,626		94,926		(286,552	)		330,335


TOTAL	$	354,120	$	430,758	$	114,992	$	(352,332	)	$	547,538	$	382,145	$	437,512	$	133,234	$	(382,145	)	$	570,746


	Parent Only		Guarantors		Non- Guarantors		Eliminations			Consolidated		Parent Only		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS

Current Assets:
Cash and cash equivalents	$	—	$	775	$	31,127	$	—		$	31,902	$	—	$	2,578	$	28,117	$	—		$	30,695
Investment, at fair value		—		—		9,782		—			9,782		—		—		10,921		—			10,921
Accounts receivable, net		—		106,018		26,048		—			132,066		—		116,874		23,366		—			140,240
Intercompany receivable, net		74,091		—		—		(74,091	)		—		85,028		—		—		(85,028	)		—
Inventories		—		155,703		27,047		—			182,750		—		126,557		24,694		—			151,251
Prepaid income taxes		1,017		—		—		801			1,818		549		—		25		1,073			1,647
Prepaid expenses and other current assets		—		7,426		1,035		—			8,461		—		5,584		878		—			6,462

Total current assets		75,108		269,922		95,039		(73,290	)		366,779		85,577		251,593		88,001		(83,955	)		341,216

Property and equipment, net		—		61,260		2,648		—			63,908		—		59,651		2,184		—			61,835
Other intangible assets, net		—		155,587		32,332		—			187,919		—		154,719		32,332		—			187,051
Deferred income taxes													—		—		334		—			334
Investment in subsidiaries		267,422		—		—		(267,422	)		—		279,233		—		—		(279,233	)		—
Deferred income taxes		—		—		442		—			442
Other assets		—		2,150		777		—			2,927		—		1,797		472		—			2,269


TOTAL	$	342,530	$	488,919	$	131,238	$	(340,712	)	$	621,975	$	364,810	$	467,760	$	123,323	$	(363,188	)	$	592,705


LIABILITIES AND EQUITY

Current Liabilities:
Accounts payable	$	—	$	89,961	$	13,723	$	—		$	103,684	$	—	$	79,600	$	13,243	$	—		$	92,843
Accrued expenses and other liabilities		—		21,524		4,973		—			26,497		—		15,543		5,318		—			20,861
Accrued interest payable		1,521		—		—		—			1,521		1,450		—		—		—			1,450
Income taxes payable		—		623		272		(895	)		—		—		623		—		(623	)		—
Unearned revenues		—		2,952		1,261		—			4,213		—		2,353		357		—			2,710
Deferred pension obligation		—		12,025		82		—			12,107
Intercompany payable, net		—		60,384		21,449		(81,833	)		—		—		77,398		15,614		(93,012	)		—

Total current liabilities		1,521		187,469		41,760		(82,728	)		148,022		1,450		175,517		34,532		(93,635	)		117,864


Senior subordinated notes payable, net		49,528		—		—		—			49,528		49,673		—		—		—			49,673
Senior credit facility		—		61,758		—		—			61,758		—		22,504		—		—			22,504
Real estate mortgages		—		21,318		—		—			21,318		—		33,591		—		—			33,591
Unearned revenues and other long-term liabilities		—		14,608		245		—			14,853		—		17,945		326		—			18,271
Deferred income taxes		—		33,319		—		1,696			35,015		—		35,419		—		1,696			37,115

Total long-term liabilities		49,528		131,003		245		1,696			182,472		49,673		109,459		326		1,696			161,154


Total liabilities		51,049		318,472		42,005		(81,032	)		330,494		51,123		284,976		34,858		(91,939	)		279,018


Total equity		291,481		170,447		89,233		(259,680	)		291,481		313,687		182,784		88,465		(271,249	)		313,687


TOTAL	$	342,530	$	488,919	$	131,238	$	(340,712	)	$	621,975	$	364,810	$	467,760	$	123,323	$	(363,188	)	$	592,705


							Non-
	Parent Only			Guarantors			Guarantors			Eliminations			Consolidated
																Parent Only			Guarantors			Non-Guarantors			Eliminations		Consolidated
Revenues:
Net sales	$	—		$	162,185		$	23,113		$	—		$	185,298		$	—		$	169,237		$	24,104		$	—	$	193,341
Royalty income		—			5,230			3,431			—			8,661			—			5,061			3,251			—		8,312

Total revenues		—			167,415			26,544			—			193,959			—			174,298			27,355			—		201,653
Cost of sales		—			107,489			15,367			—			122,856			—			111,729			16,093			—		127,822

Gross profit		—			59,926			11,177			—			71,103			—			62,569			11,262			—		73,831
Operating expenses:
Selling, general and administrative expenses		—			63,475			9,371			—			72,846			—			62,361			10,293			—		72,654
Depreciation and amortization		—			3,220			314			—			3,534			—			3,276			440			—		3,716

Total operating expenses		—			66,695			9,685			—			76,380			—			65,637			10,733			—		76,370

Operating (loss) income		—			(6,769	)		1,492			—			(5,277	)		—			(3,068	)		529			—		(2,539	)

Interest expense (income)		—			1,756			(18	)		—			1,738			—			1,901			(12	)		—		1,889

Net (loss) income before income taxes		—			(8,525	)		1,510			—			(7,015	)		—			(4,969	)		541			—		(4,428	)
Income tax (benefit) provision		—			(2,189	)		339			—			(1,850	)		—			(1,441	)		578			—		(863	)

Equity in earnings of subsidiaries, net		(5,165	)		—			—			5,165			—			(3,565	)		—			—			3,565		—

Net (loss) income		(5,165	)		(6,336	)		1,171			5,165			(5,165	)
Net loss																	(3,565	)		(3,528	)		(37	)		3,565		(3,565	)

Other comprehensive income (loss)		6,045			8,142			(2,097	)		(6,045	)		6,045
Other comprehensive (loss) income																	(2,928	)		155			(3,083	)		2,928		(2,928	)

Comprehensive income (loss)	$	880		$	1,806		$	(926	)	$	(880	)	$	880
Comprehensive loss																$	(6,493	)	$	(3,373	)	$	(3,120	)	$	6,493	$	(6,493	)

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)~~


	Parent Only		Guarantors		Non-Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	—	$	379,394	$	52,823		$	—		$	432,217
Royalty income		—		10,494		5,988			—			16,482

Total revenues		—		389,888		58,811			—			448,699
Cost of sales		—		247,170		33,961			—			281,131

Gross profit		—		142,718		24,850			—			167,568
Operating expenses:
Selling, general and administrative expenses		—		120,858		18,753			—			139,611
Depreciation and amortization		—		6,462		502			—			6,964

Total operating expenses		—		127,320		19,255			—			146,575

Operating income		—		15,398		5,595			—			20,993
Interest expense (income)		—		3,909		(84	)		—			3,825

Net income before income taxes		—		11,489		5,679			—			17,168
Income tax provision		—		2,647		771			—			3,418

Equity in earnings of subsidiaries, net		13,750		—		—			(13,750	)		—

Net income		13,750		8,842		4,908			(13,750	)		13,750

Other comprehensive income		1,140		—		1,140			(1,140	)		1,140

Comprehensive income	$	14,890	$	8,842	$	6,048		$	(14,890	)	$	14,890


	Parent Only		Guarantors			Non- Guarantors		Eliminations			Consolidated
														Parent Only			Guarantors		Non-Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	—	$	586,515		$	72,827	$	—		$	659,342		$	—		$	394,142	$	50,074		$	—		$	444,216
Royalty income		—		15,693			10,117		—			25,810			—			12,275		6,456			—			18,731

Total revenues		—		602,208			82,944		—			685,152			—			406,417		56,530			—			462,947
Cost of sales		—		399,813			46,002		—			445,815			—			260,705		33,327			—			294,032

Gross profit		—		202,395			36,942		—			239,337			—			145,712		23,203			—			168,915
Operating expenses:
Selling, general and administrative expenses		—		172,690			30,041		—			202,731			—			123,794		18,794			—			142,588
Depreciation and amortization		—		9,258			893		—			10,151			—			6,467		716			—			7,183

Total operating expenses		—		181,948			30,934		—			212,882			—			130,261		19,510			—			149,771

Loss on sale of long-lived assets		—		(697	)		—		—			(697	)

Operating income		—		19,750			6,008		—			25,758			—			15,451		3,693			—			19,144
Costs of early extinguishment of debt		—		5,121			—		—			5,121
Interest expense		—		7,363			60		—			7,423
Interest expense (income)															—			3,935		(21	)		—			3,914

Net income before income taxes		—		7,266			5,948		—			13,214			—			11,516		3,714			—			15,230
Income tax provision		—		908			1,903		—			2,811			—			3,025		1,520			—			4,545

Equity in earnings of subsidiaries, net		10,403		—			—		(10,403	)		—			10,685			—		—			(10,685	)		—

Net income		10,403		6,358			4,045		(10,403	)		10,403			10,685			8,491		2,194			(10,685	)		10,685

Other comprehensive income		879		405			474		(879	)		879
Other comprehensive (loss) income															(1,103	)		310		(1,413	)		1,103			(1,103	)

Comprehensive income	$	11,282	$	6,763		$	4,519	$	(11,282	)	$	11,282		$	9,582		$	8,801	$	781		$	(9,582	)	$	9,582


	Parent Only			Guarantors			Non- Guarantors			Eliminations			Consolidated			Parent Only			Guarantors			Non-Guarantors			Eliminations			Consolidated
NET CASH PROVIDED BY OPERATING ACTIVITIES:	$	1,155		$	32,968		$	5,824		$	(2,706	)	$	37,241		$	1,236		$	35,631		$	3,453		$	—		$	40,320


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(8,292	)		(1,042	)		—			(9,334	)		—			(3,121	)		(780	)		—			(3,901	)
Purchase of investments		—			—			(12,467	)		—			(12,467	)		—			—			(28,124	)		—			(28,124	)
Proceeds from investment maturities		—			—			9,341			—			9,341
Proceeds from note receivable		—			—			250			—			250
Proceeds from investments maturities																	—			—			10,136			—			10,136
Intercompany transactions		1,203			—			—			(1,203	)		—			246			—			—			(246	)		—

Net cash provided by (used in) investing activities		1,203			(8,292	)		(3,918	)		(1,203	)		(12,210	)		246			(3,121	)		(18,768	)		(246	)		(21,889	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior credit facility		—			250,012			—			—			250,012			—			141,588			—			—			141,588
Payments on senior credit facility		—			(273,933	)		—			—			(273,933	)		—			(164,092	)		—			—			(164,092	)
Payments on real estate mortgages		—			(634	)		—			—			(634	)		—			(435	)		—			—			(435	)
Purchase of treasury shares																	(937	)		—			—			—			(937	)
Payments for employee taxes on shares withheld																				(753	)		—			—			(753	)
Payments on capital leases		—			(196	)		—			—			(196	)		—			(140	)		—			—			(140	)
Dividends paid to stockholder		—			—			(2,706	)		2,706			—
Purchase of treasury stock		(2,151	)		—			—			—			(2,151	)
Proceeds from exercise of stock options		5			—			—			—			5			23			—			—			—			23
Intercompany transactions		—			3,539			(4,530	)		991			—						(3,027	)		3,349			(322	)		—

Net cash used in financing activities		(2,146	)		(21,212	)		(7,236	)		3,697			(26,897	)
Net cash (used in) provided by financing activities																	(914	)		(26,859	)		3,349			(322	)		(24,746	)
Effect of exchange rate changes on cash and cash equivalents		(212	)		—			(212	)		212			(212	)		(568	)		—			(568	)		568			(568	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		—			3,464			(5,542	)		—			(2,078	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS																	—			5,651			(12,534	)		—			(6,883	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		—			775			31,127			—			31,902			—			2,578			28,117			—			30,695

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	4,239		$	25,585		$	—		$	29,824		$	—		$	8,229		$	15,583		$	—		$	23,812

In November 2016, the Company paid off its then existing real estate mortgage loan and refinanced its main administrative office, warehouse and distribution facility in Miami with a $21.7 million mortgage loan. The loan is due on November 22, 2026. The interest rate is 3.715% per annum. Monthly payments of principal and interest approximate $112,000, based on a 25-year amortization with the outstanding principal due at maturity.

In November 2016, the Company refinanced its Tampa facility with a $13.2 million mortgage loan. The loan is due on November 22, 2026. The interest rate is 3.715% per annum. Monthly payments of principal and interest approximate $68,000, based on a 25-year amortization with the outstanding principal due at maturity.

Additionally, the Company may use some of the excess funds generated from the mortgage loans described above to pay down the senior credit facility and repurchase certain of its outstanding senior subordinated notes.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references to “Perry Ellis,” the “Company,” “we,” “us” or “our” include Perry Ellis International, Inc. and its subsidiaries. This management’s discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended January ~~30, 2016,~~28, 2017, filed with the Securities and Exchange Commission on April ~~14, 2016.~~10, 2017.

We caution readers that the forward-looking statements (statements which are not historical facts) in this ~~report includes “forward-looking statements” as that term is used in~~release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations rather than historical facts and they are indicated by words or phrases such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “could,” ~~“envision,”~~ “estimate,” “expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,” “possibly,” “potential,” “predict,” “probably,” ~~“pro-forma,~~“proforma,” “project,” “seek,” “should,” “target,” or “will” or the negative thereof or other variations thereon and similar words or phrases or comparable terminology. Such forward-looking statements include, but are not limited to, statements regarding Perry Ellis’ strategic operating review, growth initiatives and internal operating improvements intended to drive revenues and enhance profitability, the implementation of Perry Ellis’ profitability improvement plan and Perry Ellis’ plans to exit underperforming, low growth brands and businesses. We have based such forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, many of which are beyond our control. These ~~and other important~~ factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Some of the factors that could affect our financial performance, cause actual results to differ from our estimates, or underlie such forward-looking statements, are as set forth below and in various places in this report. These factors include, but are not limited to:include:

Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in ~~our~~Perry Ellis’ filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are valid only as of the date they were made. We undertake no obligation to update or revise any forward-looking statements to reflect new information or the occurrence of unanticipated events or otherwise.

Included in the footnotes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended January ~~30, 2016~~28, 2017 is a summary of all significant accounting policies used in the preparation of our consolidated financial statements. We follow the accounting methods and practices as required by accounting principles generally accepted in the United States of America (“GAAP”). In particular, our critical accounting policies and areas in which we use judgment are in the areas of revenue recognition, the estimated collectability of accounts receivable, the recoverability of obsolete or overstocked inventory, the impairment of long-lived assets that are our trademarks, the recoverability of deferred tax assets and the measurement of retirement related benefits. We believe that there have been no significant changes to our critical accounting policies during the three and ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended January ~~30, 2016.~~28, 2017.

The following table sets forth, for the periods indicated, selected financial data expressed by segments and includes a reconciliation of EBITDA to operating income by segment, the most directly comparable GAAP financial measure:


	Three Months Ended						Nine Months Ended
	October 29,			October 31,			October 29,			October 31,			Three Months Ended						Six Months Ended
	2016			2015			2016			2015			July 29, 2017			July 30, 2016			July 29, 2017			July 30, 2016
	(in thousands)												(in thousands)
Revenues by segment:
Men’s Sportswear and Swim	$	135,717		$	141,512		$	478,790		$	490,453		$	155,466		$	145,148		$	341,332		$	343,073
Women’s Sportswear		28,676			33,421			85,301			102,126			19,718			24,136			49,457			56,625
Direct-to-Consumer		20,905			21,514			65,423			66,763			23,210			24,057			41,428			44,518
Licensing		8,661			8,992			27,392			25,810			8,215			8,312			16,482			18,731

Total revenues	$	193,959		$	205,439		$	656,906		$	685,152		$	206,609		$	201,653		$	448,699		$	462,947


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015
	(in thousands)
Reconciliation of operating (loss) income to EBITDA
Operating (loss) income by segment:
Reconciliation of operating income (loss) to EBITDA													July 29, 2017			July 30, 2016			July 29, 2017			July 30, 2016
Operating income (loss) by segment:													(in thousands)
Men’s Sportswear and Swim	$	(7,683	)	$	2,392		$	6,834		$	14,544		$	3,869		$	(2,425	)	$	19,384		$	14,517
Women’s Sportswear		(1,289	)		(109	)		(4,746	)		222			(3,409	)		(3,106	)		(4,378	)		(3,457	)
Direct-to-Consumer		(3,370	)		(4,038	)		(9,675	)		(8,051	)		(1,960	)		(2,933	)		(6,061	)		(6,305	)
Licensing		7,065			6,798			21,454			19,043			6,072			5,925			12,048			14,389

Total operating (loss) income	$	(5,277	)	$	5,043		$	13,867		$	25,758
Total operating income (loss)													$	4,572		$	(2,539	)	$	20,993		$	19,144

Add:
Depreciation and amortization
Men’s Sportswear and Swim	$	1,814		$	1,771		$	5,717		$	5,509		$	1,786		$	2,006		$	3,637		$	3,903
Women’s Sportswear		729			589			2,107			1,655			866			764			1,661			1,378
Direct-to-Consumer		932			976			2,717			2,851			784			889			1,550			1,785
Licensing		59			47			176			136			60			57			116			117

Total depreciation and amortization	$	3,534		$	3,383		$	10,717		$	10,151		$	3,496		$	3,716		$	6,964		$	7,183

EBITDA by segment:
Men’s Sportswear and Swim	$	(5,869	)	$	4,163		$	12,551		$	20,053		$	5,655		$	(419	)	$	23,021		$	18,420
Women’s Sportswear		(560	)		480			(2,639	)		1,877			(2,543	)		(2,342	)		(2,717	)		(2,079	)
Direct-to-Consumer		(2,438	)		(3,062	)		(6,958	)		(5,200	)		(1,176	)		(2,044	)		(4,511	)		(4,520	)
Licensing		7,124			6,845			21,630			19,179			6,132			5,982			12,164			14,506

Total EBITDA	$	(1,743	)	$	8,426		$	24,584		$	35,909		$	8,068		$	1,177		$	27,957		$	26,327


EBITDA margin by segment
Men’s Sportswear and Swim		(4.3	%)		2.9	%		2.6	%		4.1	%		3.6	%		(0.3	%)		6.7	%		5.4	%
Women’s Sportswear		(2.0	%)		1.4	%		(3.1	%)		1.8	%		(12.9	%)		(9.7	%)		(5.5	%)		(3.7	%)
Direct-to-Consumer		(11.7	%)		(14.2	%)		(10.6	%)		(7.8	%)		(5.1	%)		(8.5	%)		(10.9	%)		(10.2	%)
Licensing		82.3	%		76.1	%		79.0	%		74.3	%		74.6	%		72.0	%		73.8	%		77.4	%
Total EBITDA margin		(0.9	%)		4.1	%		3.7	%		5.2	%		3.9	%		0.6	%		6.2	%		5.7	%

EBITDA consists of earnings before interest, depreciation and amortization, ~~costs on early extinguishment of debt~~ and income taxes. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America, and does not represent cash flow from operations. The most directly comparable GAAP financial measure, presented above, is operating income. EBITDA and EBITDA margin are presented solely as a supplemental disclosure because management believes that they are a common measure of operating performance in the apparel industry.

The following is a discussion of the results of operations for the three and ~~nine~~six month periods ended ~~October~~July 29, ~~2016~~2017 of the fiscal year ending ~~January 28, 2017~~February 3, 2018 (“fiscal ~~2017”~~2018”) compared with the three and ~~nine~~six month periods ended ~~October 31, 2015~~July 30, 2016 of the fiscal year ended January ~~30, 2016~~28, 2017 (“fiscal ~~2016”~~2017”).

Results of ~~Operations -~~ Operations—three and ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 compared to the three and ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016.

Net ~~sales~~sales.. Men’s Sportswear and Swim net sales for the three months ended ~~October~~July 29, ~~2016~~2017 were ~~$135.7~~$155.5 million, ~~a decrease~~an increase of ~~$5.8~~$10.4 million, or ~~4.1%~~7.2%, from ~~$141.5~~$145.1 million for the three months ended ~~October 31, 2015.~~July 30, 2016. The net sales ~~decrease~~increase was attributed ~~primarily~~ to ~~business exits~~strong sell through rates throughout the spring season and ~~the negative impact of foreign currency translation, partially offset by increases~~some movement up in shipments that were originally anticipated for third quarter. Of particular strength were our core brands, specifically Perry Ellis, ~~Golf lifestyle~~Original Penguin, Nike and golf apparel ~~and Nike swim business.~~businesses.

Men’s Sportswear and Swim net sales for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 were ~~$478.8~~$341.3 million, a decrease of ~~$11.7~~$1.8 million, or ~~2.4%~~0.5%, from ~~$490.5~~$343.1 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. Although we had an increase in the second quarter, it was offset by our customer’s preference to receive product closer to their needs resulting in a shift in sales from the first half of the year to the second half. The ~~net sales~~ decrease was ~~attributed primarily to exited brands coupled with the negative impact in our special markets programs and foreign currency conversions,~~ partially offset by increases in our ~~core~~ Perry Ellis, ~~and~~ Original Penguin, ~~collections, as well as our Golf~~golf lifestyle apparel ~~and~~business, Nike swim, ~~business.~~and other core global brands as described above.

Women’s Sportswear net sales for the three months ended ~~October~~July 29, ~~2016~~2017 were ~~$28.7~~$19.7 million, a decrease of ~~$4.7~~$4.4 million, or ~~14.1%~~18.3%, from ~~$33.4~~$24.1 million for the three months ended ~~October 31, 2015.~~July 30, 2016. The net sales decrease was attributed primarily to ~~softer replenishment business across~~planned reductions as we continue to focus on re-launching the ~~women’s market driven~~Laundry brand, as well as, a shift in ~~part by~~planned sales from the ~~impact of Hurricane Matthew for some of our east coast retail partners.~~second quarter to the third quarter.

Women’s Sportswear net sales for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 were ~~$85.3~~$49.5 million, a decrease of ~~$16.8~~$7.1 million, or ~~16.5%~~12.5%, from ~~$102.1~~$56.6 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The net sales decrease was primarily due to planned reductions in Laundry as we work on the ~~sale~~re-launch of ~~C&C California~~the brand. The decrease was partially offset by increases in Rafaella driven by the ~~prior year, planned decreases in special markets programs and softer replenishment business across the women’s market consistent with the reductions cited above.~~earlier timing of spring shipments.

Direct-to-Consumer net sales for the three months ended ~~October~~July 29, ~~2016~~2017 were ~~$20.9~~$23.2 million, a decrease of ~~$0.6~~$0.9 million, or ~~2.8%~~3.7%, from ~~$21.5~~$24.1 million for the three months ended ~~October 31, 2015.~~July 30, 2016. The decrease was driven by ~~five stores closing during~~ten store closings since the second quarter of fiscal 2017, partially offset by a ~~comparable sales~~5% increase ~~of 1%. We have experienced a significant decline~~ in ~~traffic and comparable~~e-commerce. Comparable same store sales ~~for~~remained flat while comparable margins increased 4% due to strong consumer response to our ~~retail locations that cater to higher level of tourist activity. These doors represent close to 45% of our total store count.~~product assortments.

Direct-to-Consumer net sales for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 were ~~$65.4~~$41.4 million, a decrease of ~~$1.4~~$3.1 million, or ~~2.1%~~7.0%, from ~~$66.8~~$44.5 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The decrease was driven by ~~relatively flat~~a retail stores sales decline of 1.9% in comparable same store sales for the direct-to-consumer business, coupled with ~~five net~~ten fewer stores as ~~discussed above.~~compared to the prior period.

Royalty income. Royalty income for the three months ended ~~October~~July 29, ~~2016~~2017 was ~~$8.7~~$8.2 million, a decrease of ~~$0.3~~$0.1 million, or ~~3.3%,~~essentially flat, from ~~$9.0~~$8.3 million for the three months ended ~~October 31, 2015. The~~July 30, 2016.

Royalty income for the six months ended July 29, 2017 was $16.5 million, a decrease ~~in royalty~~of $2.2 million, or 11.8%, from $18.7 million for the six months ended July 30, 2016. Royalty income ~~was~~decreases were attributed to the transition of two of our licensed ~~partners~~partners; one brought in-house and one to a new ~~partnerships.~~

Royalty income for the nine months ended October 29, 2016 was $27.4 million, an increase of $1.6 million, or 6.2%, from $25.8 million for the nine months ended October 31, 2015. Royalty income increases were attributed to increases in our Perry Ellis and Original Penguin brands as well as the new licenses signed during this and last year, and from our continuing initiatives to upgrade our licensing ~~partners, partially offset by the transition discussed above.~~partnership.

Gross profit.Gross profit was ~~$71.1~~$76.5 million for the three months ended ~~October~~July 29, ~~2016, a decrease~~2017, an increase of ~~$2.2~~$2.7 million, or ~~3.0%~~3.7%, from ~~$73.3~~$73.8 million for the three months ended ~~October 31, 2015.~~July 30, 2016. This increase is attributed to a strong sales performance by our core brands coupled with strong inventory management.

Gross profit was $167.6 million for the six months ended July 29, 2017, a decrease of $1.3 million, or 0.8%, from $168.9 million for the six months ended July 30, 2016. This decrease is attributed to the sales ~~decrease from our brand exits, foreign currency translations and softer replenishment business across the women’s market~~reductions described ~~above.~~

Gross profit was $240.0 million for the nine months ended October 29, 2016, an increase of $0.7 million, or 0.3%, from $239.3 million for the nine months ended October 31, 2015. This increase is attributed to the sales mix composition, our increase in royalty income,above and the factors described within the gross profit margin section ~~below; partially offset by sales decrease from our brand exits, softer special market programs and softer replenishment business across the women’s market described above.~~below.

Gross profit margin. As a percentage of total revenue, gross profit margins were ~~36.7%~~37.0% for the three months ended ~~October~~July 29, ~~2016,~~2017, as compared to ~~35.7%~~36.6% for the three months ended ~~October 31, 2015 which represents~~July 30, 2016, an expansion of ~~100~~40 basis points. The expansion was driven by ~~solid performance across our core brands~~stronger product margins in our ~~wholesale business, as well as stronger metrics in our~~men’s collection, golf apparel, Nike and direct-to-consumer ~~business.~~businesses.

For the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017, gross profit margins were ~~36.5%~~37.3% as a percentage of total revenue as compared to ~~34.9%~~36.5% for the ~~nine~~six months ended ~~October 31, 2015,~~July 30, 2016, an ~~increase~~expansion of ~~160~~80 basis points. The increase is attributed to ~~stronger product margins~~the disciplined management of inventory across all channels, increased sales of higher margin core brands and ~~reduced markdowns in~~efficiencies achieved within our ~~men’s collection, Golf apparel~~supply chain infrastructure. Additionally, our direct-to-consumer gross profit margin increased due to improved pricing strategies and ~~Nike businesses as well as an increase in royalty income and reduced cost realized through consolidation in our foreign buying offices and freight services.~~a move away from highly promotional events.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended ~~October~~July 29, ~~2016~~2017 were ~~$72.8~~$68.4 million, ~~an increase~~a decrease of ~~$7.9~~$4.3 million, or ~~12.2%~~5.9%, from ~~$64.9~~$72.7 million for the three months ended ~~October 31, 2015.~~July 30, 2016. The ~~increase~~decrease was attributed primarily to reduced employee expenses resulting from our continued focus on our core infrastructure. Additionally, during three months ended July 30, 2016, we had a required acceleration of ~~$8.3 million associated with~~compensation costs relating to the ~~termination~~new contract for our executive chairman, which was not repeated in the comparable period of ~~our defined pension plan offset by savings from the streamlining and consolidations of our operations.~~2017.

Selling, general and administrative expenses for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 were ~~$215.4~~$139.6 million, ~~an increase~~a decrease of ~~$12.7~~$3.0 million, or ~~6.3%~~2.1%, from ~~$202.7~~$142.6 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The ~~increase is~~decrease was attributed primarily to expenses associated with the termination of our defined pension plan, as described above, slightly higher incentive compensation accruals, severance costs and the acceleration of executive compensation costs, partially offset by reduced ~~costs~~employee expenses resulting from our continued focus on ~~the~~our core ~~infrastructure. See footnote 21~~infrastructure, and during three months ended July 30, 2016, we had a required acceleration of compensation costs relating to the ~~unaudited condensed consolidated financial statements~~new contract for ~~further information regarding the acceleration of~~our executive ~~compensation costs.~~chairman.

EBITDA. Men’s Sportswear and Swim EBITDA margin for the three months ended ~~October~~July 29, ~~2016, decreased 720~~2017 increased 390 basis points to ~~(4.3%),~~3.6% from ~~2.9%~~(0.3%) for the three months ended ~~October 31, 2015.~~July 30, 2016. The EBITDA margin was ~~unfavorably~~favorably impacted by ~~a decrease in net sales~~sourcing efficiencies and ~~a settlement charge related to the termination~~strong performance of our ~~defined benefit plan in the amount of $8.3 million.~~core brands, specifically Perry Ellis, Original Penguin, Nike and golf apparel businesses.

Men’s Sportswear and Swim EBITDA margin for the ~~nine~~six months ended ~~October~~July 29, ~~2016, decreased 150~~2017 increased 130 basis points to ~~2.6%~~6.7%, from ~~4.1%~~5.4% for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The EBITDA margin was ~~unfavorably~~favorably impacted by ~~a settlement charge related to~~sourcing efficiencies and the ~~termination~~strong sales performance of our ~~defined benefit plan in the amount of $8.3 million, partially offset by the increase in gross profit~~core brands, specifically Perry Ellis, Original Penguin, Nike and ~~margins in our men’s collection, Golf lifestyle~~golf apparel ~~and Nike~~ businesses.

Women’s Sportswear EBITDA margin for the three months ended ~~October~~July 29, ~~2016~~2017 decreased ~~340~~320 basis points to ~~(2.0%~~(12.9%) from ~~1.4%~~(9.7%) for the three months ended ~~October 31, 2015.~~ July 30, 2016. The EBITDA margin was unfavorably impacted by planned reductions and shifts in sales as discussed above.

Women’s Sportswear EBITDA margin for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 decreased ~~490~~180 basis points to ~~(3.1%~~(5.5%) from ~~1.8%~~(3.7%) for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The EBITDA margin was unfavorably impacted by the ~~exit of C&C California, planned decreases~~decrease in ~~special markets programs and softer replenishment business across the women’s market.~~net sales described above. As a result of ~~these factors~~this decrease in revenue, we were not able to realize favorable leverage in selling, general and administrative expenses.

Direct-to-Consumer EBITDA margin for the three months ended ~~October~~July 29, ~~2016,~~2017 increased ~~250~~340 basis points to ~~(11.7%~~(5.1%), from ~~(14.2%~~(8.5%) for the three months ended ~~October 31, 2015. This increase~~July 30, 2016. The EBITDA margin was ~~attributed~~favorably impacted by the product sales mix as we focus to ~~expansion in gross margin and tighter overhead spending. Because of these factors, we were able to realize favorable leverage.~~be less dependent on everyday promotions.

Direct-to-Consumer EBITDA margin for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 decreased ~~280~~70 basis points to ~~(10.6%~~(10.9%), from ~~(7.8%~~(10.2%) for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The EBITDA margin was unfavorably impacted by the ~~closing of a net of five~~decrease in revenue from our stores, as described above. ~~Additionally, selling, general and administrative expenses were unfavorably impacted by increases in rent as we renewed some of our leases at higher rates.~~

Licensing EBITDA margin for the three months ended ~~October~~July 29, ~~2016,~~2017 increased ~~620~~260 basis points to ~~82.3%~~74.6%, from ~~76.1%~~72.0% for the three months ended ~~October 31, 2015.~~July 30, 2016. The ~~increase is primarily due to a decrease~~EBITDA margin was favorably impacted by reductions in ~~the direct costs~~selling, general and administrative expenses associated with the licensing segment.

Licensing EBITDA margin for the ~~nine~~six months ended ~~October~~July 29, ~~2016, increased 470~~2017 decreased 360 basis points to ~~79.0%~~73.8%, from ~~74.3%~~77.4% for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The EBITDA margin was ~~favorably~~unfavorably impacted by the ~~increase~~decrease in royalty income as described above, and a decrease in the direct costs associated with the licensing segment. Also, as described below, during the nine months ended October 31, 2015, we had a loss on the sale of the C&C California brand tradename, which was the primary reason for the lower EBITDA margin in the first quarter of fiscal 2016.above.

Depreciation and amortization. Depreciation and amortization for the three months ended ~~October~~July 29, ~~2016,~~2017, was $3.5 million, ~~an increase~~a decrease of ~~$0.1~~$0.2 million, or ~~2.9%,~~5.4% from ~~$3.4~~$3.7 million for the three months ended ~~October 31, 2015.~~ July 30, 2016. The decrease is primarily reflected in the direct-to-consumer segment as a result of ten store closures since the second half of fiscal 2017.

Depreciation and amortization for the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017, was ~~$10.7~~$7.0 million, ~~an increase~~a decrease of ~~$0.5~~$0.2 million, or ~~4.9%~~2.8%, from ~~$10.2~~$7.2 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The ~~increase~~decrease is ~~attributed to depreciation related to our increased capital expenditures,~~ primarily reflected in the direct-to-consumer segment ~~and leasehold improvements made during fiscal 2017 and 2016.~~

~~Loss on sale of long-lived assets.~~~~During the first quarter of fiscal 2016, we entered into an agreement to sell the intellectual property of our C&C California brand to a third party. As~~as a result of ~~this transaction, we recorded a loss~~ten store closures since the second half of ~~($0.7) million in the licensing segment.~~

~~Cost on early extinguishment of debt~~~~. On April 6, 2015, we called for partial redemption of $100 million of our $150 million outstanding 7~~⁷⁄₈% Senior Subordinated Notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, we completed the redemption of $100 million of our senior subordinated notes. We incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption premium and the write-off of note issuance costs.fiscal 2017.

Interest expense. Interest expense for the three months ended ~~October~~July 29, 2017 and the three months ended July 30, 2016 remained flat at $1.9 million. Interest expense for the six months ended July 29, 2017 was ~~$1.7~~$3.8 million, a decrease of ~~$0.2~~$0.1 million, or ~~10.5%~~2.6%, from ~~$1.9~~$3.9 million for the ~~three~~six months ended October 31, 2015. Interest expense for the nine months ended October 29, 2016, was $5.7 million, a decrease of $1.7 million, or 23.0%, from $7.4 million for the nine months ended October 31, 2015. TheJuly 30, 2016. This decrease was ~~primarily attributable~~attributed to ~~a decrease in interest resulting from~~ the ~~partial redemption of $100 million of our senior subordinated notes during the second quarter of fiscal 2016 as well as a~~ lower average amount borrowed on our credit facility as compared to the prior year period.

Income ~~taxes~~taxes.. The income tax ~~benefit~~expense for the three months ended ~~October~~July 29, ~~2016,~~2017, was ~~$1.9~~$1.7 million, ~~a decrease~~an increase of ~~$2.8~~$2.6 million, as compared to ~~an expense~~a tax benefit of $0.9 million for the three months ended ~~October 31, 2015.~~July 30, 2016. For the three months ended ~~October~~July 29, ~~2016,~~2017, our effective tax rate was ~~26.4%~~63.8% as compared to ~~28.8%~~19.5% for the three months ended ~~October 31, 2015.~~July 30, 2016. This increase is attributed to the net impact of the increase in the reserve for uncertain tax positions associated with our Internal Revenue Service examination in the amount of $1 million, as well as, the current year impact of the valuation allowance on domestic taxes and a change in the ratio of income between domestic and foreign operations, of which the domestic operations are taxed at higher statutory tax rates. The income tax ~~provision~~expense for the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017, was ~~$2.7~~$3.4 million, a decrease of ~~$0.1~~$1.1 million, as compared to ~~$2.8~~$4.5 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. For the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017, our effective tax rate was ~~32.8%~~19.9% as compared to ~~21.3%~~29.8% for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The overall change in the effective tax rate is attributed to the current year impact of the valuation allowance on domestic taxes and a change in the ratio of income between domestic and foreign operations, of which the domestic operations are taxed at higher statutory tax rates.

Net income (loss) ~~income.~~.Net ~~(loss)~~ income for the three months ended ~~October~~July 29, ~~2016,~~2017 was ~~($5.2)~~$1.0 million, ~~a decrease~~an increase of ~~$7.5~~$4.6 million, or 127.8%, as compared to ~~$2.3~~a net loss of $3.6 million for the three months ended ~~October 31, 2015.~~July 30, 2016. Net income for the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017 was ~~$5.5~~$13.8 million, ~~a decrease~~an increase of ~~$4.9~~$3.1 million, or ~~47.1%~~29.0%, as compared to ~~$10.4~~$10.7 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The changes in operating results were due to the items described above.

We rely principally on cash flow from operations and borrowings under our senior credit facility to finance our operations, ~~pension funding requirements,~~ acquisitions, and capital expenditures. We believe that our working capital requirements will increase for next year as we continue to expand internationally. As of ~~October~~July 29, ~~2016,~~2017, our total working capital was ~~$213.5~~$220.6 million as compared to ~~$218.8 million at January 30, 2016 and $221.5~~$223.4 million as of ~~October 31, 2015.~~January 28, 2017 and $208.3 million as of July 30, 2016. We believe that our cash flows from operations, ~~and~~ availability under our senior credit facility and remaining letter of credit ~~facility~~facilities are sufficient to meet our working capital needs and capital expenditure needs over the next year.

We consider the undistributed earnings of our foreign subsidiaries as of ~~October~~July 29, ~~2016,~~2017, to be indefinitely reinvested and, accordingly, no United States income taxes have been provided thereon. As of ~~October~~July 29, ~~2016,~~2017, the amount of cash associated with indefinitely reinvested foreign earnings was approximately ~~$25.6~~$15.6 million. We have not, nor do we anticipate the need to, repatriate ~~these~~ funds to the United States to satisfy ~~our~~ domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

Net cash provided by operating activities was ~~$37.2~~$40.3 million for the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017, as compared to cash provided by operating activities of ~~$18.6~~$35.9 million for the ~~nine~~six months ended ~~October 31, 2015.~~

The cash provided by operating activities for the nine months ended October 29, 2016, is primarily attributable to decreased inventory of $69.0 million due to improved inventory management. This was partially offset by a decrease in accounts payable and accrued expenses of $62.6 million, as well as a reduction in deferred pension obligation of $5.5 million due to our funding of our pension in anticipation of its termination and a reduction in accrued interest of $1.0 million. For the nine months ended October 29, 2016, our inventory turnover ratio increased to 3.8, as we continued to improve our inventory management, from 3.7 for the comparable period in fiscalJuly 30, 2016.

The cash provided by operating activities for the ~~nine~~six months ended ~~October 31, 2015,~~July 29, 2017, is primarily attributable to a decreased inventory of $21.3 million, due to improved inventory management, a decrease in accounts receivable of ~~$6.5~~$8.5 million, ~~decreased inventory~~an increased income taxes payable of ~~$38.4~~$1.4 million ~~due to improved inventory management,~~and an increase in unearned revenues of $2.0 million, as well as a ~~reduction~~decrease in prepaid income taxes of ~~3.6~~$1.6 million. This was partially offset by a decrease in accounts payable and accrued expenses of ~~$54.8~~$19.7 million. Our inventory turnover ratio increased to 4.0 as compared to 3.6 in the prior period because of our continued focus on inventory management.

The cash provided by operating activities for the six months ended July 30, 2016, is primarily attributable to a decrease in accounts receivable of $10.1 million, decreased inventory of $47.6 million due to improved inventory management, an increase in unearned revenues and other liabilities of $3.5 million, as well as ~~decreased~~a decrease in prepaid income taxes of $1.9 million. This was partially offset by a decrease in accounts payable and accrued ~~interest payable~~expenses of ~~$3.5~~$51.6 million.

Net cash used in investing activities was ~~$12.2~~$21.9 million for the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017 as compared to cash ~~provided by~~used in investing activities of ~~$2.5~~$10.4 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The net cash used in investing activities during the first ~~nine~~six months of fiscal 2018 primarily reflects the purchase of investments of $28.1 million and the purchase of property and equipment of $3.9 million primarily for leasehold improvements and store fixtures; offset by the proceeds from the maturities of investments in the amount of $10.1 million.

We anticipate capital expenditures during the remainder of fiscal 2018 of $8.0 million to $9.0 million in new office leasehold improvements, technology, systems, retail store leasehold improvements, and other expenditures.

Net cash used in investing activities was $10.4 million for the six months ended July 30, 2016. The net cash used in investing activities during the first six months of fiscal 2017 primarily reflects the purchase of investments of ~~$12.5~~$9.0 million and the purchase of property and equipment of ~~$9.3~~$6.6 million primarily for leasehold improvements and store fixtures; ~~partially~~ offset by proceeds from the maturities of investments of $9.3 million. We anticipate capital expenditures during the remainder of fiscal 2017 of $3.0 million to $4.0 million in new leasehold improvements, technology, systems, retail stores, and other expenditures.

Net cash provided by investing activities was $2.5 million for the nine months ended October 31, 2015, as compared to cash used in investing activities of $19.8 million for the nine months ended November 1, 2014. The net cash provided by investing activities during the first nine months of fiscal 2016 primarily reflects the proceeds from the maturities of investments in the amount of $17.8 million, the proceeds on the sale of the C&C California brand in the amount of $2.5 million and the proceeds from notes receivable associated with the sale of the Australian, Fiji and New Zealand Jantzen trademark rights in the amount of $0.3 million; partially offset by the purchase of investments of $8.2 million and the purchase of property and equipment of $9.8 million primarily for leasehold improvements and store fixtures.$5.2 million.

Net cash used in financing activities was ~~$26.9~~$24.7 million for the ~~nine~~six months ended ~~October~~July 29, ~~2016,~~2017 as compared to ~~$39.3~~cash used in financing activities of $29.4 million for the ~~nine~~six months ended ~~October 31, 2015.~~July 30, 2016. The net cash used during the first ~~nine~~six months of fiscal 2018 primarily reflects net payments on our senior credit facility of $22.5 million, purchase of treasury shares of $0.9 million, payments for employee taxes on shares withheld upon vesting of $0.8 million, payments of $0.4 million on our mortgage loans and payments on capital leases of $0.1 million.

Net cash used in financing activities was $29.4 million for the six months ended July 30, 2016. The net cash used during the first six months of fiscal 2017 primarily reflects net payments on our senior credit facility of ~~$23.9~~$27.9 million, ~~purchases~~payments for employee taxes on shares withheld upon vesting of ~~treasury stock of $2.2~~$0.9 million, payments of ~~$0.6~~$0.4 million on our mortgage loans and payments on capital leases of ~~$0.2 million; partially offset by the proceeds from exercises of stock options of 5,000.~~

Net cash used in financing activities was $39.3 million for the nine months ended October 31, 2015, as compared to $10.9 million for the nine months ended November 1, 2014. The net cash used during the first nine months of fiscal 2016 primarily reflects payments for the partial redemption on our senior subordinated notes of $100 million, payments of $0.6 million on our mortgage loans, payments of deferred financing fees on the senior credit facility of $0.6 million and payments on capital leases of $0.1 ~~million; partially offset by net borrowings on our senior credit facility of $60.6 million and the proceeds from exercises of stock options of $1.4~~ million. ~~We financed the redemption of the subordinated notes through our senior credit facility.~~

Our Board of Directors has authorized us to purchase, from time to time and as market and business conditions warrant, up to $70 million of our common stock for cash in the open market or in privately negotiated transactions through October 31, 2017. Although our Board of Directors allocated a maximum of $70 million to carry out the program, we are not obligated to purchase any specific number of outstanding shares and will reevaluate the program on an ongoing ~~basis. Total purchases under the plan life-to-date amount to approximately $60.8 million.~~basis

During the ~~third~~second quarter of fiscal ~~2017,~~2018, we repurchased 50,000 shares of common stock at a cost of ~~$2.2~~$0.9 million. There were no treasury shares outstanding as of January ~~30, 2016. During~~28, 2017. Total purchases under the ~~second quarter of fiscal 2016, we retired 770,753 shares of treasury stock recorded at a cost of~~plan to date amount to approximately ~~$15.7~~$61.7 million. ~~Accordingly, during the second quarter of fiscal 2016, we reduced common stock and additional paid in capital by $7,000 and $15.7 million, respectively.~~

In March 2011, we issued $150 million 7⁷⁄₈% senior subordinated notes, due April 1, 2019. The proceeds of this offering were used to retire the $150 million 8⁷⁄₈% senior subordinated notes due September 15, 2013 and to repay a portion of the outstanding balance on the senior credit facility. The proceeds to us were $146.5 million yielding an effective interest rate of 8.0%.

On April 6, 2015, we elected to call for the partial redemption of $100 million of our $150 million 7⁷⁄₈% senior subordinated notes due 2019 and a notice of redemption was sent to all registered holders of the senior subordinated notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, we completed the redemption of the $100 million of our senior subordinated notes. We incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption, including the redemption premium as well as the write-off of note issuance costs. At ~~October~~July 29, ~~2016,~~2017 and January 28, 2017, the balance of the 7⁷⁄₈% senior subordinated notes totaled ~~$49.6~~$49.7 million, net of debt issuance costs in the amount of ~~$0.4 million. At January 30, 2016, the balance of the 7~~⁷⁄₈~~% senior subordinated notes totaled $49.5~~$0.3 million ~~net of debt issuance costs in the amount of $0.5 million.~~

Certain Covenants.The indenture governing the senior subordinated notes contains certain covenants which restrict our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness in certain circumstances, pay dividends or make other distributions on, redeem or repurchase capital stock, make investments or other restricted payments, create liens on assets to secure debt, engage in transactions with affiliates, and effect a consolidation or merger. We are not aware of any non-compliance with any of our covenants in this indenture. We could be materially harmed if we violate any covenants because the indenture’s trustee could declare the outstanding notes, together with accrued interest, to be immediately due and payable, which we may not be able to satisfy. In addition, a violation could also constitute a cross-default under the senior credit facility, the letter of credit facilities and the real estate mortgages resulting in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy.

On April 22, 2015, we amended and restated our existing senior credit facility (the “Credit Facility”), with Wells Fargo Bank, National Association, as agent for the lenders, and Bank of America, N.A., as syndication agent. The Credit Facility provides a revolving credit facility of up to an aggregate amount of $200 million. The Credit Facility has been extended through April 30, ~~2020.~~2020 (“Maturity Date”). In connection with this amendment and restatement, we paid fees in the amount of $0.6 million. These fees will be amortized over the term of the ~~credit facility~~Credit Facility as interest expense. At ~~October~~July 29, ~~2016~~2017, we had no outstanding borrowings ~~of $37.8 million,~~ under the Credit Facility. At January ~~30, 2016,~~28, 2017, we had outstanding borrowings of ~~$61.8~~$22.5 million under the Credit Facility.

Certain Covenants. The Credit Facility contains certain financial and other covenants, which, among other things, require us to maintain a minimum fixed charge coverage ratio if availability falls below certain thresholds. We are not aware of any non-compliance with any of our covenants in this Credit Facility. These covenants may restrict our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness and liens in certain circumstances, redeem or repurchase capital stock, make certain investments or sell assets. We may pay cash dividends subject to certain restrictions set forth in the covenants including, but not limited to, meeting a minimum excess availability threshold and no occurrence of a default. We could be materially harmed if we violate any covenants, as the lenders under the Credit Facility could declare all amounts outstanding, together with accrued interest, to be immediately due and payable. If we are unable to repay those amounts, the lenders could proceed against our assets and the assets of our subsidiaries that are borrowers or guarantors. In addition, a covenant violation that is not cured or waived by the lenders could also constitute a cross-default under certain of our other outstanding indebtedness, such as the indenture relating to our 7⁷⁄₈% senior subordinated notes due April 1, 2019, our letter of credit facilities, or our real estate mortgage loans. A cross-default could result in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy. Additionally, our Credit Facility includes a subjective acceleration clause if a “material adverse change” in our business occurs. We believe that the likelihood of the lender exercising this right is remote.

Borrowing Base. Borrowings under the Credit Facility are limited to a borrowing base calculation, which generally restricts the outstanding balance to the sum of (a) 87.5% of eligible receivables plus (b) 87.5% of eligible foreign accounts up to $1.5 million plus (c) the lesser of (i) the inventory loan limit, which equals 80% of the maximum credit under the Credit Facility at the time, (ii) a maximum of 70.0% of eligible finished goods inventory with an inventory limit not to exceed $125 million, or 90.0% of the net recovery percentage (as defined in the Credit Facility) of eligible inventory.

Interest. Interest on the outstanding principal balance drawn under the Credit Facility accrues at the prime rate and at the rate quoted by the agent for Eurodollar loans. The margin adjusts quarterly, in a range of 0.50% to 1.00% for prime rate loans and 1.50% to 2.00% for Eurodollar loans, based on the previous quarterly average of excess availability plus excess cash on the last day of the previous quarter.

Security. As security for the indebtedness under the Credit Facility, we granted to the lenders a first priority security interest (subject to liens permitted under the Credit Facility to be senior thereto) in substantially all of our existing and future assets, including, without limitation, accounts receivable, inventory, deposit accounts, general intangibles, equipment and capital stock or membership interests, as the case may be, of certain subsidiaries, and real estate, but excluding our non-U.S. subsidiaries and all of our trademark portfolio.

As of ~~October~~July 29, ~~2016,~~2017, we maintained one U.S. dollar letter of credit facility totaling $30.0 million. Each documentary letter of credit is secured primarily by the consignment of merchandise in transit under that letter of credit and certain subordinated liens on our assets.

~~During the third quarter of fiscal~~At July 29, 2017 ~~one letter of credit facility totaling, $0.3 million utilized by our United Kingdom subsidiary, expired and has not been renewed.~~

~~During fiscal 2016, a $15 million line of credit expired and was not renewed and we decreased the letter of credit sublimit in our Senior Credit Facility to $30.0 million.~~

~~At October 29, 2016~~ and January ~~30, 2016,~~28, 2017, there was ~~$19.2~~$19.3 million and ~~$18.9~~$19.2 million, respectively, available under the existing letter of credit ~~facility.~~facilities.

In July 2010, we paid off our then existing real estate mortgage loan and refinanced our main administrative office, warehouse and distribution facility in Miami with a $13.0 million mortgage loan. The loan is due on August 1, 2020. In July 2013, we amended the mortgage loan agreement to modify the interest rate. The interest rate was reduced to 3.9% per annum and the terms were restated to reflect new monthly payments of principal and interest of $69,000, based on a 25-year amortization with the outstanding principal due at maturity. At October 29, 2016, the balance of the real estate mortgage loan totaled $10.8 million, net of discount, of which $403,000 is due within one year.

In November 2016, we paid off our existing real estate mortgage loan and refinanced our main administrative office, warehouse and distribution facility in Miami with a $21.7 million mortgage loan. The loan is due on November 22, 2026. The interest rate is 3.715% per annum. Monthly payments of principal and interest approximate $112,000, based on a 25-year amortization with the outstanding principal due at maturity. At July 29, 2017, the balance of the real estate mortgage loan totaled $21.1 million, net of discount, of which $546,000 is due within one year.

In June 2006, we entered into a mortgage loan for $15 million secured by our Tampa facility. The loan iswas due on January 23, 2019. In January 2014, we amended the mortgage loan to modify the interest rate. The interest rate was reduced to 3.25% per annum and the terms were restated to reflect new monthly payments of principal and interest of approximately $68,000, based on a 20-year amortization, with the outstanding principal due at maturity. ~~At October 29, 2016, the balance of the real estate mortgage loan totaled $10.7 million, net of discount, of which approximately $472,000 is due within one year.~~

In November 2016, we ~~refinanced our Tampa facility with a~~amended the mortgage to increase the amount to $13.2 ~~million mortgage loan.~~million. The loan is due on November 22, 2026. The interest rate is 3.715% per annum. Monthly payments of principal and interest approximate $68,000, based on a 25-year amortization with the outstanding principal due at maturity. At July 29, 2017, the balance of the real estate mortgage loan totaled $12.9 million, net of discount, of which approximately $333,000 is due within one year.

~~Additionally, we may use some of~~We used the excess funds generated from the new mortgage loans described above to pay down our senior credit ~~facility and repurchase certain of our outstanding senior subordinated notes.~~facility.

The real estate mortgage loans contain certain covenants. We are not aware of any non-compliance with any of the covenants. If we violate any covenants, the lender under the real estate mortgage ~~loan~~loans could declare all amounts outstanding thereunder to be immediately due and payable, which we may not be able to satisfy. A covenant violation could constitute a cross-default under our senior credit facility, our letter of credit facilities and the indenture relating to our senior subordinated notes resulting in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy.

We are not a party to any “off-balance sheet arrangements,” as defined by applicable GAAP and SEC rules.

We do not believe that inflation or foreign currency fluctuations significantly affected our results of operations for the three and ~~nine~~six months ended ~~October~~July 29, ~~2016.~~2017.

Item 3:7A. Quantitative and Qualitative Disclosures ~~about~~About Market Risk

The market risk inherent in our financial statements represents the potential changes in the fair value, earnings or cash flows arising from changes in interest ~~rates.~~rates or foreign currency. We manage this exposure through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Our policy allows the use of derivative financial instruments for identifiable market risk exposure, including interest rate and foreign currency.

Our United Kingdom subsidiary is exposed to foreign currency risk from inventory purchases. In order to mitigate the financial risk of settlement of inventory at various prices based on movement of the U.S. dollar against the British pound, ~~in October 2016,~~ we entered into foreign currency forward exchange contracts (the “Hedging Instruments”). These contracts are formally designated and “highly effective” as cash flow hedges.

All changes in the Hedging Instruments’ fair value associated with inventory purchases are recorded in equity as a component of accumulated other comprehensive income until the underlying hedged item is reclassified to earnings. We record the ~~Hedging Instruments~~hedging instruments at fair value in our Consolidated Balance Sheet. The cash flows from such hedges are presented in the same category in our Consolidated Statement of Cash Flows as the items being hedged.

~~At October 29, 2016, the~~The notional ~~amount~~amounts outstanding of ~~Hedging Instruments is $5.7 million. Such contracts expire between October 2016 and March 2017. There were no outstanding Hedging Instruments at January 30, 2016.~~

~~No gains or losses relating to~~ foreign exchange forward contracts were $15.1 million and $15.0 million at July 29, 2017 and January 28, 2017, respectively. Such contracts expire through July 2018.

Accumulated other comprehensive loss included a net deferred loss for Hedging Instruments in the amount of $0.6 million and $0.2 million at July 29, 2017 and January 28, 2017, respectively. The net deferred loss will be reclassified from accumulated other comprehensive loss to costs of goods sold during the next twelve months when the inventory is sold.

The total gain (loss) relating to hedging instruments reclassified to earnings during ~~any~~the first and second quarter of fiscal 2018 was $41,000 and ($33,000), respectively. There was no gain or loss relating to hedging instruments reclassified to earnings during the first and second quarter of fiscal ~~periods presented.~~2017.

We are exposed to market risks for the pricing of cotton and other fibers, which may impact fabric prices. Fabric is a portion of the overall product cost, which includes various components. We manage our fabric prices by using a combination of different strategies including the utilization of sophisticated logistics and supply chain management systems, which allow us to maintain maximum flexibility in our global sourcing of products. This provides us with the ability to re-direct our sourcing of products to the most cost-effective jurisdictions. In addition, we may modify our product offerings to our customers based on the availability of new fibers, yield enhancement techniques and other technological advances that allow us to utilize more cost effective fibers. Finally, we also have the ability to adjust our price points of such products, to the extent market conditions allow. These factors, along with our foreign-based sourcing offices, allow us to procure product from lower cost countries or capitalize on certain tariff-free arrangements, which help mitigate any commodity price increases that may occur. We have not historically managed, and do not currently intend to manage, commodity price exposures by using derivative instruments.

We have a risk management policy to manage foreign currency risk relating to inventory purchases by our subsidiaries which are denominated in foreign currencies. As such, we may employ hedging and derivative strategies to limit the effects of changes in foreign currency on our operating income and cash flows. However, we consider our current exposure to foreign exchange risk as not significant.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) of the Securities Exchange Act. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~October~~July 29, ~~2016~~2017 in ensuring that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~During the last fiscal quarter, we upgraded our accounting system to Oracle E-Business Suite 12.1.3. The upgrade was fully integrated into our current system of internal controls.~~

There were no ~~other~~ changes in our internal ~~controls~~control over financial reporting ~~that occurred~~ during ~~our last fiscal~~the quarter ended July 29, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	PAGE
PART I: FINANCIAL INFORMATION

Item 1:

Condensed Consolidated Balance Sheets (Unaudited) as of ~~October~~July 29, ~~2016~~2017 and January ~~30, 2016~~28, 2017		1

Condensed Consolidated Statements of Operations (Unaudited) for the three and ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015~~July 30, 2016		2

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three and ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015~~July 30, 2016		3

Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~nine~~six months ended ~~October~~July 29, ~~2016~~2017 and ~~October 31, 2015~~July 30, 2016		4

Notes to Unaudited Condensed Consolidated Financial Statements		6

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations		2824

Item 3:

Quantitative and Qualitative Disclosures About Market Risk		3733

Item 4:

Controls and Procedures		3834

PART II: OTHER INFORMATION		39

~~Item 2:~~

Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds		3935

Item 6:

Exhibits		4036


	October 29,			January 30,
	2016			2016
	(in thousands)

Total letter of credit facilities	$	30,000		$	30,286
Outstanding letters of credit		(10,788	)		(11,395	)

Total credit available	$	19,212		$	18,891


	July 29, 2017			January 28, 2017
	(in thousands)
Total letter of credit facilities	$	30,000		$	30,000
Outstanding letters of credit		(10,727	)		(10,788	)

Total credit available	$	19,273		$	19,212


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Maximum Approximate Dollar Value that May Yet Be Purchased under the Plans or Programs

July 31, 2016 to August 27, 2016		87,600	$	18.83		87,600	$	9,716,088
August 28, 2016 to October 1, 2016		26,335	$	19.03		26,335	$	9,215,045

Total shares repurchased during Fiscal 2017		113,935	$	18.88		113,935	$	9,215,045


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Maximum Approximate Dollar Value that May Yet Be Purchased under the Plans or Programs
April 30, 2017 to May 27, 2017		50,000	$	18.74		50,000	$	8,278,199
July 2, 2017 to July 29, 2017⁽²⁾		11,259	$	19.17		—	$	8,278,199


	Unrealized			Foreign			Unrealized			Unrealized
	(Loss) Gain on			Currency Translation			(Loss) Gain on			Gain on
	Pension Liability			Adjustments, Net			Investments			Forward Contract		Total
	(in thousands)
Balance, January 30, 2016	$	(7,368	)	$	(7,131	)	$	(9	)	$	—	$	(14,508	)
Other comprehensive loss (income) before reclassifications		(313	)		(3,772	)		7			255		(3,823	)
Amounts reclassified from accumulated other comprehensive loss		8,765			—			—			—		8,765

Balance, October 29, 2016	$	1,084		$	(10,903	)	$	(2	)	$	255	$	(9,566	)


	Unrealized (Loss) Gain on Pension Liability		Foreign Currency Translation Adjustments, Net			Unrealized (Loss) Gain on Investments			Unrealized (Loss) Gain on Forward Contract			Total
	(in thousands)
Balance, January 28, 2017	$	—	$	(9,902	)	$	(12	)	$	(181	)	$	(10,095	)
Other comprehensive income (loss) before reclassifications		—		1,552			—			(404	)		1,148
Amounts reclassified from accumulated other comprehensive loss		—		—			—			(8	)		(8	)

Balance, July 29, 2017	$	—	$	(8,350	)	$	(12	)	$	(593	)	$	(8,955	)


	Three Months Ended
	October 29, 2016		October 31, 2015
	(in thousands)
Amortization of defined benefit pension items
Actuarial loss	$	8,455	$	135	Selling, general and administrative expenses
Tax provision		—		—	Income tax provision

Total, net of tax	$	8,455	$	135


	Nine Months Ended
	October 29, 2016		October 31, 2015
	(in thousands)
Amortization of defined benefit pension items
Actuarial loss	$	8,765	$	405	Selling, general and administrative expenses
Tax provision		—		—	Income tax provision

Total, net of tax	$	8,765	$	405


		Three Months Ended
	Statement of Operations Location	July 29, 2017		July 30, 2016
Amortization of defined benefit pension items actuarial gains	Selling, general and administrative expenses	$	—	$	155
Forward contract loss reclassified from accumulated other comprehensive loss to income	Cost of goods sold		33		—

Total, net of tax		$	33	$	155


Exhibit Number	Exhibit Description	Where Filed

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)	Filed herewith.

31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)	Filed herewith.

32.1	Certification of Principal Executive Officer pursuant to Section 1350	Filed herewith.

32.2	Certification of Principal Financial Officer pursuant to Section 1350	Filed herewith.

101.INS	XBRL Instance Document	Filed herewith.

101.SCH	XBRL Taxonomy Extension Schema	Filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith.


~~Exhibit~~ ~~Number~~	~~Exhibit Description~~	~~Where Filed~~

~~31.1~~	~~Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)~~		~~Filed herewith.~~

~~31.2~~	~~Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)~~		~~Filed herewith.~~

~~32.1~~	~~Certification of Principal Executive Officer pursuant to Section 1350~~		~~Filed herewith.~~

~~32.2~~	~~Certification of Principal Financial Officer pursuant to Section 1350~~		~~Filed herewith.~~

~~101.INS~~	~~XBRL Instance Document~~		~~Filed herewith.~~

~~101.SCH~~	~~XBRL Taxonomy Extension Schema~~		~~Filed herewith.~~

~~101.CAL~~	~~XBRL Taxonomy Extension Calculation Linkbase~~		~~Filed herewith.~~

~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase~~		~~Filed herewith.~~

~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase~~		~~Filed herewith.~~

~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase~~		~~Filed herewith.~~

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth