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 RegulationS-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, anon-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule12b-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 Rule12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock is ~~15,712,678~~15,668,000 (as of ~~August 23,~~November 24, 2017).


	July 29, 2017			January 28, 2017			October 28, 2017			January 28, 2017
ASSETS
Current Assets:
Cash and cash equivalents	$	23,812		$	30,695		$	26,524		$	30,695
Investments, at fair value		28,870			10,921			25,596			10,921
Accounts receivable, net		131,455			140,240			133,843			140,240
Inventories		131,197			151,251			129,293			151,251
Prepaid income taxes		—			1,647			—			1,647
Prepaid expenses and other current assets		6,819			6,462			5,718			6,462

Total current assets		322,153			341,216			320,974			341,216

Property and equipment, net		59,272			61,835			57,511			61,835
Other intangible assets, net		186,633			187,051			186,425			187,051
Deferred income tax		462			334			446			334
Other assets		2,226			2,269			1,942			2,269

TOTAL	$	570,746		$	592,705		$	567,298		$	592,705

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	69,358		$	92,843		$	51,440		$	92,843
Accrued expenses and other liabilities		25,906			20,861			34,563			20,861
Accrued interest payable		1,407			1,450			400			1,450
Accrued income taxes payable		1,334			—			1,055			—
Unearned revenues		3,579			2,710			2,591			2,710

Total current liabilities		101,584			117,864			90,049			117,864

Senior subordinated notes payable, net		49,744			49,673			49,780			49,673
Senior credit facility		—			22,504			7,917			22,504
Real estate mortgages		33,153			33,591			32,937			33,591
Other long-term liabilities		19,358			18,271			15,327			18,271
Deferred income taxes		36,572			37,115			36,759			37,115

Total long-term liabilities		138,827			161,154			142,720			161,154

Total liabilities		240,411			279,018			232,769			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; 15,762,678 shares issued and outstanding as of July 29, 2017 and 15,530,273 shares issued and outstanding as of January 28, 2017		158			155
Common stock $.01 par value; 100,000,000 shares authorized; 15,688,189 shares issued and outstanding as of October 28, 2017 and 15,530,273 shares issued and outstanding as of January 28, 2017								157			155
Additional paid-in-capital		149,992			147,300			150,173			147,300
Retained earnings		190,077			176,327			193,292			176,327
Accumulated other comprehensive loss		(8,955	)		(10,095	)		(9,093	)		(10,095	)

Total		331,272			313,687

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

Total equity		330,335			313,687			334,529			313,687

TOTAL	$	570,746		$	592,705		$	567,298		$	592,705


	Three Months Ended					Six Months Ended				Three Months Ended					Nine Months Ended
	July 29, 2017		July 30, 2016			July 29, 2017		July 30, 2016		October 28, 2017		October 29, 2016			October 28, 2017		October 29, 2016
Revenues:
Net sales	$	198,394	$	193,341		$	432,217	$	444,216	$	190,389	$	185,298		$	622,606	$	629,514
Royalty income		8,215		8,312			16,482		18,731		8,449		8,661			24,931		27,392

Total revenues		206,609		201,653			448,699		462,947		198,838		193,959			647,537		656,906
Cost of sales		130,129		127,822			281,131		294,032		124,760		122,856			405,891		416,888

Gross profit		76,480		73,831			167,568		168,915		74,078		71,103			241,646		240,018

Operating expenses:
Selling, general and administrative expenses		68,412		72,654			139,611		142,588		65,172		72,846			204,783		215,434
Depreciation and amortization		3,496		3,716			6,964		7,183		3,586		3,534			10,550		10,717

Total operating expenses		71,908		76,370			146,575		149,771		68,758		76,380			215,333		226,151

Operating income (loss)		4,572		(2,539	)		20,993		19,144		5,320		(5,277	)		26,313		13,867
Interest expense		1,869		1,889			3,825		3,914		1,613		1,738			5,438		5,652

Net income (loss) before income taxes		2,703		(4,428	)		17,168		15,230		3,707		(7,015	)		20,875		8,215
Income tax provision (benefit)		1,724		(863	)		3,418		4,545		492		(1,850	)		3,910		2,695

Net income (loss)	$	979	$	(3,565	)	$	13,750	$	10,685	$	3,215	$	(5,165	)	$	16,965	$	5,520

Net income (loss) per share:
Basic	$	0.06	$	(0.24	)	$	0.91	$	0.72	$	0.21	$	(0.34	)	$	1.13	$	0.37

Diluted	$	0.06	$	(0.24	)	$	0.90	$	0.71	$	0.21	$	(0.34	)	$	1.11	$	0.36

Weighted average number of shares outstanding
Basic		15,075		14,953			15,042		14,882		15,115		14,991			15,066		14,920
Diluted		15,289		14,953			15,296		15,139		15,413		14,991			15,335		15,169


	Six Months Ended						Nine Months Ended
	July 29, 2017			July 30, 2016			October 28, 2017			October 29, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	13,750		$	10,685		$	16,965		$	5,520
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,130			7,382			10,793			11,013
Provision for bad debts		1,686			478			1,794			680
Amortization of debt issue cost		202			205			303			309
Amortization of premiums and discounts		53			28			78			42
Amortization of unrealized (gain) loss on pension liability		—			310
Amortization of unrealized loss on pension liability								—			465
Pension settlement charge								—			8,300
Deferred income taxes		(671	)		1,042			(468	)		1,221
Share-based compensation		3,425			3,786			4,768			5,104
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable, net		8,527			10,087			5,485			506
Inventories		21,342			47,604			22,959			69,012
Prepaid income taxes		1,611			1,874			1,684			17
Prepaid expenses and other current assets		(300	)		110			792			402
Other assets		(85	)		37			(118	)		121
Deferred pension obligation								—			(5,516	)
Accounts payable and accrued expenses		(19,746	)		(51,626	)		(28,675	)		(61,656	)
Accrued interest payable		(43	)		(34	)		(1,050	)		(993	)
Income taxes payable		1,418			344			1,043			—
Unearned revenues and other liabilities		2,021			3,469			(2,998	)		3,640
Deferred pension obligation		—			99

Net cash provided by operating activities		40,320			35,880			33,355			38,187


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(3,901	)		(6,609	)		(5,571	)		(9,334	)
Purchases of investments		(28,124	)		(9,039	)		(36,972	)		(12,467	)
Proceeds from investment maturities		10,136			5,205			22,246			9,341
Proceeds from note receivable								250			250

Net cash used in investing activities		(21,889	)		(10,443	)		(20,047	)		(12,210	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior credit facility		141,588			179,380			201,888			250,012
Payments on senior credit facility		(164,092	)		(207,273	)		(216,475	)		(273,933	)
Purchase of treasury stock								(937	)		(2,151	)
Payments for employee taxes on shares withheld								(980	)		(946	)
Payments on real estate mortgages		(435	)		(423	)		(650	)		(634	)
Purchase of treasury shares		(937	)		—
Payments for employee taxes on shares withheld		(753	)		(946	)
Payments on capital leases		(140	)		(129	)		(212	)		(196	)
Proceeds from exercise of stock options		23			5			24			5

Net cash used in financing activities		(24,746	)		(29,386	)		(17,342	)		(27,843	)


Effect of exchange rate changes on cash and cash equivalents		(568	)		(71	)		(137	)		(212	)


NET DECREASE IN CASH AND CASH EQUIVALENTS		(6,883	)		(4,020	)		(4,171	)		(2,078	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		30,695			31,902			30,695			31,902

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	23,812		$	27,882		$	26,524		$	29,824


	Six Months Ended				Nine Months Ended
	July 29, 2017		July 30, 2016		October 28, 2017		October 29, 2016
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	3,613	$	3,715	$	6,107	$	6,294

Income taxes	$	771	$	700	$	1,133	$	904


NON-CASH FINANCING AND INVESTING ACTIVITIES:
Accrued purchases of property and equipment	$	138	$	407	$	173	$	1,172

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 Form10-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. 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 Form10-K for the year ended January 28, 2017, filed with the Securities and Exchange Commission on April 10, 2017.

The information presented reflects all adjustments, which ~~are~~ in the opinion of management are 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.” ASUNo. 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. ASUNo. 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 has begun its initial assessment of the guidance. While the Company has not completed its evaluation, it expects that the adoption of this ASU iswill not ~~expected to~~ have a material impact on the Company’s results of operations or the Company’s financial position.

In July 2015, the FASB issued ASU2015-11, “Inventory (Topic 330): Simplifying the Measurement of ~~Inventory”,~~Inventory,” which requires inventory measured using any method other thanlast-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. ASU2015-11 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 ASUNo. 2015-11 did not have a material impact on the Company’s results of operations or the Company’s financial position.

In February 2016, the FASB issued ASUNo. 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 ASUNo. 2016-09, “Compensation ~~— Stock~~—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 adopted the provisions of ASU2016-09 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 ASU2016-09. 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 adoption, iswas 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 ASUNo. 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, ASU2014-09, “Revenue from Contracts with ~~Customers”,~~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)~~(“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 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 May 2016, the FASB issued ASUNo. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends certain aspects of the new revenue standard, ASU2014-09,“Revenue from Contracts with ~~Customers”.~~Customers.” The amendments are intended to provide clarifying guidance in a few narrow areas such as collectability, contract modifications, completed contracts at transition, andnon-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 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 June 2016, the FASB issued ASUNo. 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 andavailable-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 onavailable-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 ASUNo. 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 ASUNo. 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 ASU2016-16 in the first quarter of fiscal 2018. The adoption of ASU2016-16 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 ASUNo. 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 ASUNo. 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 evaluating the impact of the adoption of this standard on its consolidated financial statements.

In August 2017, the FASB issued ASUNo. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,”which simplifies the application of hedge accounting guidance to better portray the economic results of risk management activities in the financial statements. The guidance aligns the recognition and presentation of the effects of hedging instruments and hedged items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.


	July 29, 2017			January 28, 2017			October 28, 2017			January 28, 2017
	(in thousands)						(in thousands)
Trade accounts	$	144,757		$	151,370		$	145,547		$	151,370
Royalties		5,293			6,659			6,509			6,659
Other receivables		1,153			712			1,181			712

Total		151,203			158,741			153,237			158,741
Less: allowances		(19,748	)		(18,501	)		(19,394	)		(18,501	)

Total	$	131,455		$	140,240		$	133,843		$	140,240

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

The Company’s investments at ~~July 29,~~October 28, 2017 and January 28, 2017 include marketable securities and certificates of deposit with maturity dates of less than one year. Marketable securities consist of 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.


	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)									(in thousands)
Marketable securities	$	22,752	$	—	$	(11	)	$	22,741	$	16,907	$	—	$	(8	)	$	16,899
Certificates of deposit		6,130		—		(1	)		6,129		8,696		2		(1	)		8,697

Total investments	$	28,882	$	—	$	(12	)	$	28,870	$	25,603	$	2	$	(9	)	$	25,596


	July 29, 2017			January 28, 2017			October 28, 2017			January 28, 2017
	(in thousands)						(in thousands)
Furniture, fixtures and equipment	$	94,973		$	91,639		$	95,534		$	91,639
Buildings and building improvements		21,295			21,359			21,882			21,359
Vehicles		537			523			537			523
Leasehold improvements		48,215			48,799			47,633			48,799
Land		9,430			9,430			9,430			9,430

Total		174,450			171,750			175,016			171,750
Less: accumulated depreciation and amortization		(115,178	)		(109,915	)		(117,505	)		(109,915	)

Total	$	59,272		$	61,835		$	57,511		$	61,835

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


	October 28, 2017			January 28, 2017
	(in thousands)
Furniture, fixtures and equipment	$	810		$	810
Less: accumulated depreciation and amortization		(655	)		(452	)

Total	$	155		$	358

For the three months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016, depreciation and amortization expense relating to property and equipment amounted to ~~$3.4 million and $3.6 million, respectively.~~$3.5 million. For the ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016, depreciation and amortization expense relating to property and equipment amounted to ~~$6.7~~$10.2 million and ~~$6.9~~$10.4 million, respectively. These amounts include amortization expense for leased property under capital leases.

Trademarks included in other intangible assets, net, are considered indefinite-lived assets and totaled $184.1 million at ~~July 29,~~October 28, 2017 and January 28, 2017.


	July 29, 2017			January 28, 2017			October 28, 2017			January 28, 2017
	(in thousands)						(in thousands)
Customer lists	$	8,450		$	8,450		$	8,450		$	8,450
Less: accumulated amortization		(5,962	)		(5,545	)		(6,171	)		(5,545	)

Total	$	2,488		$	2,905		$	2,279		$	2,905

For the three months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016, amortization expense relating to customer lists amounted to ~~approximately~~ $0.2 million ~~for each of the periods.~~and $0.3 million, respectively. For the ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016, amortization expense relating to customer lists amounted to ~~$0.4~~$0.6 million ~~for each of the periods.~~and $0.7 million, respectively. Other intangible assets are amortized over their estimated useful lives of 10 years. Assuming no impairment, the following table sets forth the estimated amortization expense for future periods based on recorded amounts as of January 28, 2017:

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


	July 29, 2017			January 28, 2017			October 28, 2017			January 28, 2017
	(in thousands)						(in thousands)
Total letter of credit facilities	$	30,000		$	30,000		$	30,000		$	30,000
Outstanding letters of credit		(10,727	)		(10,788	)		(10,568	)		(10,788	)

Total credit available	$	19,273		$	19,212		$	19,432		$	19,212

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 ~~$3.8 million and $3.7~~$4.2 million for the three months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016 ~~respectively,~~ and ~~$7.8~~$12.0 million and ~~$8.0~~$12.2 million for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016, respectively, and are included in selling, general and administrative expenses.

Basic net income (loss) per share is computed by dividing net income (loss) 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 (loss) 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) per share:


	Three Months Ended					Six Months Ended				Three Months Ended					Nine Months Ended
	July 29, 2017		July 30, 2016			July 29, 2017		July 30, 2016		October 28, 2017		October 29, 2016			October 28, 2017		October 29, 2016
	(in thousands, except per share data)									(in thousands, except per share data)
Numerator:
Net income (loss)	$	979	$	(3,565	)	$	13,750	$	10,685	$	3,215	$	(5,165	)	$	16,965	$	5,520

Denominator:
Basic-weighted average shares		15,075		14,953			15,042		14,882		15,115		14,991			15,066		14,920
Dilutive effect: equity awards		214		—			254		257		298		—			269		249

Diluted-weighted average shares		15,289		14,953			15,296		15,139		15,413		14,991			15,335		15,169

Basic income (loss) per share	$	0.06	$	(0.24	)	$	0.91	$	0.72	$	0.21	$	(0.34	)	$	1.13	$	0.37

Diluted income (loss) per share	$	0.06	$	(0.24	)	$	0.90	$	0.71	$	0.21	$	(0.34	)	$	1.11	$	0.36

Antidilutive effect:⁽¹⁾		404		1,103			398		604		165		1,015			265		532


	Changes in Equity			Changes in Equity
	(in thousands)			(in thousands)
Equity at January 28, 2017	$	313,687		$	313,687
Comprehensive income		14,890			17,967
Share transactions under employee equity compensation plans		2,695			3,812
Purchase of treasury stock		(937	)		(937	)

Equity at July 29, 2017	$	330,335
Equity at October 28, 2017				$	334,529

Equity at January 30, 2016	$	291,481		$	291,481
Comprehensive income		9,582			10,462
Share transactions under employee equity compensation plans		2,845			4,163
Purchase of treasury stock					(2,151	)

Equity at July 30, 2016	$	303,908
Equity at October 29, 2016				$	303,955

The Board of Directors has authorized the Company 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.~~2018. Although 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 reevaluates the program on an ongoing basis.

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


	Unrealized (Loss) Gain on Pension Liability		Foreign Currency Translation Adjustments, Net			Unrealized (Loss) Gain on Investments			Unrealized (Loss) Gain on Forward Contract			Total			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)														(in thousands)
Balance, January 28, 2017	$	—	$	(9,902	)	$	(12	)	$	(181	)	$	(10,095	)	$	—		$	(9,902	)	$	(12	)	$	(181	)	$	(10,095	)
Other comprehensive income (loss) before reclassifications		—		1,552			—			(404	)		1,148
Other comprehensive loss (income) before reclassifications																—			1,276			5			(357	)		924
Amounts reclassified from accumulated other comprehensive loss		—		—			—			(8	)		(8	)		—			—			—			78			78

Balance, July 29, 2017	$	—	$	(8,350	)	$	(12	)	$	(593	)	$	(8,955	)
Balance, October 28, 2017															$	—		$	(8,626	)	$	(7	)	$	(460	)	$	(9,093	)


															Unrealized (Loss) Gain on Pension Liability			Foreign Currency Translation Adjustments, Net			Unrealized (Loss) Gain on Investments			Unrealized Gain on 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	)

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


									Three Months Ended
								Statement of Operations Location	October 28, 2017		October 29, 2016
									(in thousands)
Amortization of defined benefit pension items actuarial gains								Selling, general and administrative expenses	$	—	$	8,455
Forward contract loss reclassified from accumulated other comprehensive loss to income								Cost of goods sold		86		—

Total, net of tax									$	86	$	8,455


									Nine Months Ended
			Six Months Ended					Statement of Operations Location	October 28, 2017		October 29, 2016
		Statement of Operations Location	July 29, 2017			July 30, 2016			(in thousands)
Amortization of defined benefit pension items actuarial gains		Selling, general and administrative expenses	$	—		$	310	Selling, general and administrative expenses	$	—	$	8,765
Forward contract gain reclassified from accumulated other comprehensive loss to income		Cost of goods sold		(8	)		—	Cost of goods sold		78		—

Total, net of tax	Total, net of tax		$	(8	)	$	310		$	78	$	8,765

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 ~~July 29,~~October 28, 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”). 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.


Derivatives Designated As Hedging Instruments		Balance sheet location	July 29, 2017		January 28, 2017		Balance sheet location	October 28, 2017		January 28, 2017
			(in thousands)					(in thousands)
Foreign currency forward exchange contract (inventory purchases)		Accounts Payable	$	593	$	181	Accounts Payable	$	460	$	181

Total	Total		$	593	$	181		$	460	$	181

The following table summarizes the effect and classification of the Company’s Hedging Instruments.

The notional amounts outstanding of foreign exchange forward contracts were ~~$15.1~~$11.8 million and $15.0 million at ~~July 29,~~October 28, 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~~$0.5 million and $0.2 million at ~~July 29,~~October 28, 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 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 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 2006 through fiscal 2017, depending on each state’s particular statute of ~~limitation.~~limitations. As of ~~July 29,~~October 28, 2017, the examination by the Internal Revenue Service for the Company’s fiscal 2011 ~~2012, and 2013~~through 2015 U.S. federal tax years is still ongoing. During ~~fiscal~~the three months ended October 28, 2017, the Company received a revised Notice of Proposed Adjustment from the Internal Revenue Service, which proposed ~~adjustments~~an adjustment to taxable income for fiscal ~~2011, 2012 and~~ 2013 of ~~$6.1~~$12.6 million, ~~$5.3 million and $6.8 million, respectively. During~~to which the ~~three months ended July 29, 2017,~~Company agreed. Additionally, the Company engaged in ~~further~~ conversations with the Internal Revenue Service ~~concerning~~to extend the ~~proposed adjustments. Based upon those conversations,~~years under audit to include fiscal 2014 and 2015, to allow for the carryback of beneficial tax attributes. During fiscal 2017, the Company ~~has~~ established a reserve of $1$1.1 million for ~~the amount it would be willing to pay to settle the issue.~~this adjustment and associated interest. While the Company still believes its position would be sustained upon appeal or, if necessary, through litigation, it has ~~made~~agreed to this ~~determination~~adjustment 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~~had a $1.2 million liability recorded for unrecognized tax benefits as of January 28, 2017, which ~~includes~~included 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~~nine months ended ~~July 29,~~October 28, 2017, the total amount of unrecognized tax benefits ~~increased~~decreased by approximately ~~$5.0 million~~$18,000 and increased by $5.0 million, respectively. The change to the total amount of the unrecognized tax benefit for the three ~~and six~~ months ended ~~July 29,~~October 28, 2017 included a decrease in interest and penalties of approximately $11,000 and for the nine months ended October 28, 2017 included an increase in interest and penalties of approximately ~~$171,000 and $187,000, respectively.~~$176,000. 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,~~October 28, 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,~~October 28, 2017. The statute of limitations related to the Company’s fiscal 2011 ~~2012, 2013, and 2014~~through 2015 U.S. federal tax years has been extended as part of the examination and is not expected to lapse within the next twelve months.

At the end of fiscal 2017, the Company maintained a $38.6 million valuation allowance against its remaining domestic deferred tax asset; including, but not limited to, the federal net operating loss carryforward and the U.S. state net operating loss carryforwards, whose utilization is not restricted by factors beyond the Company’s control. The establishment of valuation allowances and 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 ~~six~~nine months ended ~~July 29,~~October 28, 2017, by itself that does not represent sufficient positive evidence that athe deferred tax ~~asset~~assets 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. The Company believes that there is a reasonable possibility that within the next twelve months, sufficient positive evidence may become available to allow it to reach the conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense in the period released. 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 Stock Option 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~~2015 Plan 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~~Amended Plan was approved by the shareholders at the Company’s 2017 annual meeting.

During the first and second quarters of fiscal 2018, the Company granted an aggregate of 72,307 and 10,681 shares of restricted stock to certain key employees, which vest primarily over a three-year period, at an estimated value of $1.5 million and $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 2018, the Company awarded to five directors an aggregate of 28,995 shares of restricted stock. The restricted stock vests primarily over aone-year period, at an estimated value of $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 2018, the Company granted performance based restricted stock to certain key employees. Such stock generally vests 100% in April 2020, provided that each employee is still an employee of the Company on such date, and the Company has met certain performance criteria. A total of 154,401 shares of performance-based restricted stock were issued at an estimated value of $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, second and ~~second~~third quarters of fiscal 2018, a total of 77,655, 31,448 and ~~31,448~~26,672 shares of restricted stock vested, of which 25,241, 11,259 and ~~11,259~~9,691 shares were withheld to cover the employees’ statutory income tax requirements, respectively. The estimated value of the withheld shares was $0.5 million, $0.2 million and $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. TheDirect-to-Consumer segment derives its revenues from the sale of the Company’s branded and licensed products through the Company’s retail stores ande-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.

The Company 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 ~~six~~nine months of fiscal 2018 and 2017:


	Three Months Ended					Six Months Ended					Three Months Ended					Nine Months Ended
	July 29, 2017		July 30, 2016			July 29, 2017		July 30, 2016			October 28, 2017		October 29, 2016			October 28, 2017		October 29, 2016
	(in thousands)										(in thousands)
Service cost	$	—	$	63		$	—	$	126		$	—	$	63		$	—	$	189
Interest cost		—		124			—		248			—		124			—		372
Expected return on plan assets		—		(87	)		—		(174	)		—		(87	)		—		(261	)
Amortization of net gain		—		155			—		310
Settlement												—		8,300			—		8,300
Amortization of net loss												—		155			—		465

Net periodic benefit cost	$	—	$	255		$	—	$	510		$	—	$	8,555		$	—	$	9,065

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 in fiscal 2017 exceeded that threshold, the Company recognized a settlement charge of $8.3 million in anticipation of the plan’s termination in fiscal 2017.

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 2 of the valuation hierarchy)—The carrying amounts of theavailable-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 ~~$34.0~~$33.8 million and $34.5 million at ~~July 29,~~October 28, 2017 and January 28, 2017, respectively. The carrying values of the real estate mortgages at ~~July 29,~~October 28, 2017 and January 28, 2017, approximate their fair values since the interest rates approximate ~~market.~~market rates.

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 2 of the valuation hierarchy)—The carrying amounts of the 7⁷/₈% senior subordinated notes payable were approximately $49.8 million and $49.7 million at ~~July 29,~~October 28, 2017 and January 28, ~~2017.~~2017, respectively. The fair value of the 7⁷/₈% senior subordinated notes payable was approximately ~~$50.2 million and~~ $50.1 million as of ~~July 29,~~October 28, 2017 and January 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.

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 theNon-Guarantors on a combined, or where appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of ~~July 29,~~October 28, 2017 and January 28, 2017 and for the three and ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 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 ASU2016-09 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~~Guarantors for the ~~six~~nine months ended ~~July 30,~~October 29, 2016, with a corresponding increase in cash used in financing activities to the ~~guarantor~~Guarantors 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	$	—	$	8,229	$	15,583	$	—		$	23,812	$	—	$	3,136	$	23,388	$	—		$	26,524
Investment, at fair value		—		—		28,870		—			28,870		—		—		25,596		—			25,596
Accounts receivable, net		—		103,110		28,345		—			131,455		—		108,209		25,634		—			133,843
Intercompany receivable, net		89,162		—		—		(89,162	)		—		88,713		—		—		(88,713	)		—
Inventories		—		107,531		23,666		—			131,197		—		107,185		22,108		—			129,293
Prepaid expenses and other current assets		—		5,978		841		—			6,819		—		4,724		994		—			5,718

Total current assets		89,162		224,848		97,305		(89,162	)		322,153		88,713		223,254		97,720		(88,713	)		320,974

Property and equipment, net		—		56,722		2,550		—			59,272		—		55,241		2,270		—			57,511
Other intangible assets, net		—		154,301		32,332		—			186,633		—		154,093		32,332		—			186,425
Deferred income taxes		—		—		462		—			462		—		—		446		—			446
Investment in subsidiaries		292,983		—		—		(292,983	)		—		296,198		—		—		(296,198	)		—
Other assets		—		1,641		585		—			2,226		—		1,549		393		—			1,942

TOTAL	$	382,145	$	437,512	$	133,234	$	(382,145	)	$	570,746	$	384,911	$	434,137	$	133,161	$	(384,911	)	$	567,298


LIABILITIES AND EQUITY

Current Liabilities:
Accounts payable	$	—	$	56,906	$	12,452	$	—		$	69,358	$	—	$	44,261	$	7,179	$	—		$	51,440
Accrued expenses and other liabilities		—		19,930		5,976		—			25,906		—		26,265		8,298		—			34,563
Accrued interest payable		1,407		—		—		—			1,407		400		—		—		—			400
Income taxes payable		659		583		92		—			1,334		202		589		264		—			1,055
Unearned revenues		—		3,074		505		—			3,579		—		2,243		348		—			2,591
Intercompany payable, net		—		76,594		18,999		(95,593	)		—		—		76,153		19,268		(95,421	)		—

Total current liabilities		2,066		157,087		38,024		(95,593	)		101,584		602		149,511		35,357		(95,421	)		90,049


Senior subordinated notes payable, net		49,744		—		—		—			49,744		49,780		—		—		—			49,780
Senior credit facility													—		7,917		—		—			7,917
Real estate mortgages		—		33,153		—		—			33,153		—		32,937		—		—			32,937
Unearned revenues and other long-term liabilities		—		19,074		284		—			19,358		—		15,201		126		—			15,327
Deferred income taxes		—		36,572		—		—			36,572		—		36,759		—		—			36,759

Total long-term liabilities		49,744		88,799		284		—			138,827		49,780		92,814		126		—			142,720


Total liabilities		51,810		245,886		38,308		(95,593	)		240,411		50,382		242,325		35,483		(95,421	)		232,769


Total equity		330,335		191,626		94,926		(286,552	)		330,335		334,529		191,812		97,678		(289,490	)		334,529


TOTAL	$	382,145	$	437,512	$	133,234	$	(382,145	)	$	570,746	$	384,911	$	434,137	$	133,161	$	(384,911	)	$	567,298

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


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

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

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

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

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

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

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

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

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

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

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


	Parent Only		Guarantors		Non- Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	—	$	556,327	$	73,187		$	—		$	629,514
Royalty income		—		17,505		9,887			—			27,392

Total revenues		—		573,832		83,074			—			656,906
Cost of sales		—		368,194		48,694			—			416,888

Gross profit		—		205,638		34,380			—			240,018
Operating expenses:
Selling, general and administrative expenses		—		187,269		28,165			—			215,434
Depreciation and amortization		—		9,687		1,030			—			10,717

Total operating expenses		—		196,956		29,195			—			226,151

Operating income		—		8,682		5,185			—			13,867
Interest expense (income)		—		5,691		(39	)		—			5,652

Net income before income taxes		—		2,991		5,224			—			8,215
Income tax provision		—		836		1,859			—			2,695

Equity in earnings of subsidiaries, net		5,520		—		—			(5,520	)		—

Net income		5,520		2,155		3,365			(5,520	)		5,520

Other comprehensive income (loss)		4,942		8,452		(3,510	)		(4,942	)		4,942

Comprehensive income (loss)	$	10,462	$	10,607	$	(145	)	$	(10,462	)	$	10,462


	Parent Only			Guarantors			Non-Guarantors			Eliminations			Consolidated			Parent Only			Guarantors			Non- Guarantors			Eliminations			Consolidated
NET CASH PROVIDED BY OPERATING ACTIVITIES:	$	1,236		$	35,631		$	3,453		$	—		$	40,320
NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES:																$	(192	)	$	26,124		$	7,423		$	—		$	33,355

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(3,121	)		(780	)		—			(3,901	)		—			(4,744	)		(827	)		—			(5,571	)
Purchase of investments		—			—			(28,124	)		—			(28,124	)		—			—			(36,972	)		—			(36,972	)
Proceeds from investments maturities		—			—			10,136			—			10,136			—			—			22,246			—			22,246
Proceeds on note receivable																	—			—			250			—			250
Intercompany transactions		246			—			—			(246	)		—			1,242			—			—			(1,242	)		—

Net cash provided by (used in) investing activities		246			(3,121	)		(18,768	)		(246	)		(21,889	)		1,242			(4,744	)		(15,303	)		(1,242	)		(20,047	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior credit facility		—			141,588			—			—			141,588			—			201,888			—			—			201,888
Payments on senior credit facility		—			(164,092	)		—			—			(164,092	)		—			(216,475	)		—			—			(216,475	)
Payments on real estate mortgages		—			(435	)		—			—			(435	)		—			(650	)		—			—			(650	)
Purchase of treasury shares		(937	)		—			—			—			(937	)		(937	)		—			—			—			(937	)
Payments for employee taxes on shares withheld					(753	)		—			—			(753	)		—			(980	)		—			—			(980	)
Payments on capital leases		—			(140	)		—			—			(140	)		—			(212	)		—			—			(212	)
Proceeds from exercise of stock options		23			—			—			—			23			24			—			—			—			24
Intercompany transactions					(3,027	)		3,349			(322	)		—			—			(4,393	)		3,288			1,105			—

Net cash (used in) provided by financing activities		(914	)		(26,859	)		3,349			(322	)		(24,746	)		(913	)		(20,822	)		3,288			1,105			(17,342	)
Effect of exchange rate changes on cash and cash equivalents		(568	)		—			(568	)		568			(568	)		(137	)		—			(137	)		137			(137	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		—			5,651			(12,534	)		—			(6,883	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS																	—			558			(4,729	)		—			(4,171	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		—			2,578			28,117			—			30,695			—			2,578			28,117			—			30,695

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	8,229		$	15,583		$	—		$	23,812		$	—		$	3,136		$	23,388		$	—		$	26,524


	Parent Only			Guarantors			Non-Guarantors			Eliminations			Consolidated			Parent Only			Guarantors			Non- Guarantors			Eliminations			Consolidated
NET CASH PROVIDED BY OPERATING ACTIVITIES:	$	4,543		$	29,241		$	4,802		$	(2,706	)	$	35,880		$	1,155		$	33,914		$	5,824		$	(2,706	)	$	38,187

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(5,854	)		(755	)		—			(6,609	)		—			(8,292	)		(1,042	)		—			(9,334	)
Purchase of investments		—			—			(9,039	)		—			(9,039	)		—			—			(12,467	)		—			(12,467	)
Proceeds from investments maturities		—			—			5,205			—			5,205
Proceeds from investment maturities																	—			—			9,341			—			9,341
Proceeds from note receivable																	—			—			250			—			250
Intercompany transactions		(4,477	)		—			—			4,477			—			1,203			—			—			(1,203	)		—

Net cash used in investing activities		(4,477	)		(5,854	)		(4,589	)		4,477			(10,443	)

Net cash provided by (used in) investing activities																	1,203			(8,292	)		(3,918	)		(1,203	)		(12,210	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior credit facility		—			179,380			—			—			179,380			—			250,012			—			—			250,012
Payments on senior credit facility		—			(207,273	)		—			—			(207,273	)		—			(273,933	)		—			—			(273,933	)
Payments on real estate mortgages		—			(423	)		—			—			(423	)		—			(634	)		—			—			(634	)
Payments for employee taxes on shares withheld		—			(946	)		—			—			(946	)
Payments on capital leases		—			(129	)		—			—			(129	)		—			(196	)		—			—			(196	)
Dividends paid to stockholder		—			—			(2,706	)		2,706			—			—			—			(2,706	)		2,706			—
Purchase of treasury stock																	(2,151	)		—			—			—			(2,151	)
Payments for employee taxes on shares withheld																	—			(946	)		—			—			(946	)
Proceeds from exercise of stock options		5			—			—			—			5			5			—			—			—			5
Intercompany transactions		—			9,178			(4,630	)		(4,548	)		—			—			3,539			(4,530	)		991			—

Net cash provided by (used in) financing activities		5			(20,213	)		(7,336	)		(1,842	)		(29,386	)
Net cash used in financing activities																	(2,146	)		(22,158	)		(7,236	)		3,697			(27,843	)
Effect of exchange rate changes on cash and cash equivalents		(71	)		—			(71	)		71			(71	)		(212	)		—			(212	)		212			(212	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		—			3,174			(7,194	)		—			(4,020	)		—			3,464			(5,542	)		—			(2,078	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		—			775			31,127			—			31,902			—			775			31,127			—			31,902

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	3,949		$	23,933		$	—		$	27,882		$	—		$	4,239		$	25,585		$	—		$	29,824

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 Form10-K for the year ended January 28, 2017, filed with the Securities and Exchange Commission on April 10, 2017.

We caution readers that the forward-looking statements (statements which are not historical facts) in this ~~release~~quarterly report 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,” “estimate,” “expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,” “possibly,” “potential,” “predict,” “probably,” “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 factors include:

Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in 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 Form10-K for the year ended January 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 ~~six~~nine months ended ~~July 29,~~October 28, 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 Form10-K for the year ended January 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
	Three Months Ended						Six Months Ended						October 28,			October 29,			October 28,			October 29,
	July 29, 2017			July 30, 2016			July 29, 2017			July 30, 2016			2017			2016			2017			2016
	(in thousands)												(in thousands)
Revenues by segment:
Men’s Sportswear and Swim	$	155,466		$	145,148		$	341,332		$	343,073		$	141,549		$	135,717		$	482,881		$	478,790
Women’s Sportswear		19,718			24,136			49,457			56,625			28,104			28,676			77,561			85,301
Direct-to-Consumer		23,210			24,057			41,428			44,518			20,736			20,905			62,164			65,423
Licensing		8,215			8,312			16,482			18,731			8,449			8,661			24,931			27,392

Total revenues	$	206,609		$	201,653		$	448,699		$	462,947		$	198,838		$	193,959		$	647,537		$	656,906


													Three Months Ended						Nine Months Ended
													October 28,			October 29,			October 28,			October 29,
													2017			2016			2017			2016
	Three Months Ended						Six Months Ended						(in thousands)
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	$	3,869		$	(2,425	)	$	19,384		$	14,517		$	3,450		$	(7,683	)	$	22,834		$	6,834
Women’s Sportswear		(3,409	)		(3,106	)		(4,378	)		(3,457	)		(2,393	)		(1,289	)		(6,771	)		(4,746	)
Direct-to-Consumer		(1,960	)		(2,933	)		(6,061	)		(6,305	)		(2,543	)		(3,370	)		(8,604	)		(9,675	)
Licensing		6,072			5,925			12,048			14,389			6,806			7,065			18,854			21,454

Total operating income (loss)	$	4,572		$	(2,539	)	$	20,993		$	19,144		$	5,320		$	(5,277	)	$	26,313		$	13,867

Add:
Depreciation and amortization
Men’s Sportswear and Swim	$	1,786		$	2,006		$	3,637		$	3,903		$	1,870		$	1,814		$	5,507		$	5,717
Women’s Sportswear		866			764			1,661			1,378			939			729			2,600			2,107
Direct-to-Consumer		784			889			1,550			1,785			716			932			2,266			2,717
Licensing		60			57			116			117			61			59			177			176

Total depreciation and amortization	$	3,496		$	3,716		$	6,964		$	7,183		$	3,586		$	3,534		$	10,550		$	10,717

EBITDA by segment:
Men’s Sportswear and Swim	$	5,655		$	(419	)	$	23,021		$	18,420		$	5,320		$	(5,869	)	$	28,341		$	12,551
Women’s Sportswear		(2,543	)		(2,342	)		(2,717	)		(2,079	)		(1,454	)		(560	)		(4,171	)		(2,639	)
Direct-to-Consumer		(1,176	)		(2,044	)		(4,511	)		(4,520	)		(1,827	)		(2,438	)		(6,338	)		(6,958	)
Licensing		6,132			5,982			12,164			14,506			6,867			7,124			19,031			21,630

Total EBITDA	$	8,068		$	1,177		$	27,957		$	26,327		$	8,906		$	(1,743	)	$	36,863		$	24,584

EBITDA margin by segment
Men’s Sportswear and Swim		3.6	%		(0.3	%)		6.7	%		5.4	%		3.8	%		(4.3	%)		5.9	%		2.6	%
Women’s Sportswear		(12.9	%)		(9.7	%)		(5.5	%)		(3.7	%)		(5.2	%)		(2.0	%)		(5.4	%)		(3.1	%)
Direct-to-Consumer		(5.1	%)		(8.5	%)		(10.9	%)		(10.2	%)		(8.8	%)		(11.7	%)		(10.2	%)		(10.6	%)
Licensing		74.6	%		72.0	%		73.8	%		77.4	%		81.3	%		82.3	%		76.3	%		79.0	%
Total EBITDA margin		3.9	%		0.6	%		6.2	%		5.7	%		4.5	%		(0.9	%)		5.7	%		3.7	%

EBITDA consists of earnings before interest, depreciation and amortization, 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~~measures of operating performance in the apparel industry.

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

Results of ~~Operations—~~Operations - three and ~~six~~nine months ended ~~July 29,~~October 28, 2017 compared to the three and ~~six~~nine months ended ~~July 30,~~October 29, 2016.

Net ~~sales.~~sales. Men’s Sportswear and Swim net sales for the three months ended ~~July 29,~~October 28, 2017 were ~~$155.5~~$141.5 million, an increase of ~~$10.4~~$5.8 million, or ~~7.2%~~4.3%, from ~~$145.1~~$135.7 million for the three months ended ~~July 30,~~October 29, 2016. The net sales increase was attributed to strong sell through rates throughout the ~~spring season and some movement up in shipments that were originally anticipated for third quarter.~~fall seasons. Of particular strength were our core brands, specifically Perry Ellis, Original Penguin, Nike and golf lifestyle apparel businesses.

Men’s Sportswear and Swim net sales for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 were ~~$341.3~~$482.9 million, ~~a decrease~~an increase of ~~$1.8~~$4.1 million, or ~~0.5%~~0.9%, from ~~$343.1~~$478.8 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. ~~Although we had an~~This increase inwas a result of our strong sell through rates during the ~~second quarter, it~~spring and fall season. This increase was ~~offset by our customer’s preference~~attributed 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 decrease was partially offset by increases in our~~ Perry Ellis, Original Penguin, golf lifestyle apparel business, Nike swim, and other core global ~~brands as described above.~~brands.

Women’s Sportswear net sales for the three months ended ~~July 29,~~October 28, 2017 were ~~$19.7~~$28.1 million, a decrease of ~~$4.4~~$0.6 million, or ~~18.3%~~2.1%, from ~~$24.1~~$28.7 million for the three months ended ~~July 30,~~October 29, 2016. The net sales decrease was attributed primarily to planned reductions ~~as we continue to focus on re-launching~~in the Laundry brand, ~~as well as, a shift~~offset by increases in ~~planned sales from the second quarter to the third quarter.~~Rafaella.

Women’s Sportswear net sales for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 were ~~$49.5~~$77.6 million, a decrease of ~~$7.1~~$7.7 million, or ~~12.5%~~9.1%, from ~~$56.6~~$85.3 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The net sales decrease was primarily due to planned reductions in the Laundry brand as we work on the ~~re-launch~~transition of the ~~brand.~~brand to a licensing partner. The decrease was partially offset by increases in the Rafaella ~~driven by the earlier timing of spring shipments.~~brand.

Direct-to-Consumer net sales for the three months ended ~~July 29,~~October 28, 2017 were ~~$23.2~~$20.7 million, a decrease of ~~$0.9~~$0.2 million, or ~~3.7%~~0.9%, from ~~$24.1~~$20.9 million for the three months ended ~~July 30,~~October 29, 2016. This decrease is attributed to the closure of ten stores, as well as the temporary closing of certain stores due to the effects of Hurricanes Harvey, Irma and Maria. This decrease was offset by a 3.7% increase in comparable same store sales.

Direct-to-Consumer net sales for the nine months ended October 28, 2017 were $62.2 million, a decrease of $3.2 million, or 4.9%, from $65.4 million for the nine months ended October 29, 2016. Comparable same store sales remained flat. The decrease was driven by ten store closings since the second quarter of fiscal 2017, partially offset by a 5% increase in e-commerce. Comparable same store sales remained flat while comparable margins increased 4% due to strong consumer response to our product assortments.

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

Royalty income. Royalty income for the three months ended ~~July 29,~~October 28, 2017 was ~~$8.2~~$8.4 million, a decrease of ~~$0.1~~$0.3 million, or ~~essentially flat,~~3.4%, from ~~$8.3~~$8.7 million for the three months ended ~~July 30,~~October 29, 2016.

Royalty income for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 was ~~$16.5~~$24.9 million, a decrease of ~~$2.2~~$2.5 million, or ~~11.8%~~9.1%, from ~~$18.7~~$27.4 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. ~~Royalty~~For the three and nine months ended October 28, 2017 royalty income decreases were attributed to the transition of two of our licensed partners; one broughtin-house and one to a new licensing partnership.

Gross profit.Gross profit was ~~$76.5~~$74.1 million for the three months ended ~~July 29,~~October 28, 2017, an increase of ~~$2.7~~$3.0 million, or ~~3.7%~~4.2%, from ~~$73.8~~$71.1 million for the three months ended ~~July 30,~~October 29, 2016. This increase iswas attributed to a strong sales performance by our core brands coupled with strong inventory management.

Gross profit was ~~$167.6~~$241.6 million for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, ~~a decrease~~an increase of ~~$1.3~~$1.6 million, or ~~0.8%~~0.7%, from ~~$168.9~~$240.0 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. This ~~decrease is~~increase was attributed to the sales ~~reductions~~increases described above and the factors described within the gross profit margin section below.

Gross profit margin. As a percentage of total revenue, gross profit margins were ~~37.0%~~37.3% for the three months ended ~~July 29,~~October 28, 2017, as compared to ~~36.6%~~36.7% for the three months ended ~~July 30,~~October 29, 2016 which represents an expansion of 4060 basis points. The expansion was driven by stronger product margins in our ~~men’s collection, golf apparel, Nike~~Original Penguin and ~~direct-to-consumer~~theDirect-to-Consumer businesses.

For the ~~six~~nine months ended ~~July 29,~~October 28, 2017, gross profit margins were 37.3% as a percentage of total revenue, as compared to 36.5% for the ~~six~~nine months ended ~~July 30,~~October 29, 2016, an ~~expansion~~increase of 80 basis points. The increase iswas attributed to the disciplined management of inventory across all channels, increased sales of higher margin core brands and efficiencies achieved within our supply chain infrastructure. Additionally, our ~~direct-to-consumer~~Direct-to-Consumer gross profit margin increased due to improved pricing strategies and a move away from highly promotional events.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended ~~July 29,~~October 28, 2017 were ~~$68.4~~$65.2 million, a decrease of ~~$4.3~~$7.6 million, or ~~5.9%~~10.4%, from ~~$72.7~~$72.8 million for the three months ended ~~July 30,~~October 29, 2016. The decrease was attributed primarily to ~~reduced employee~~ expenses ~~resulting from~~of $8.3 million associated with the termination of our ~~continued focus on our core infrastructure. Additionally,~~defined pension plan during the three months ended ~~July 30,~~October 29, 2016, ~~we had a required acceleration~~partially offset by an increase in certain unplanned legal fees of ~~compensation costs relating to~~$0.5 million during the ~~new contract for our executive chairman, which was not repeated in the comparable period of~~three months ended October 28, 2017.

Selling, general and administrative expenses for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 were ~~$139.6~~$204.8 million, a decrease of ~~$3.0~~$10.6 million, or ~~2.1%~~4.9%, from ~~$142.6~~$215.4 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The decrease was attributed primarily to reduced employee expenses resulting from our continued focus on our core infrastructure, the pension expense as explained above, and, ~~during three months ended July 30, 2016, we had~~ a required acceleration of compensation costs relating to the new contract for our executive ~~chairman.~~chairman during three months ended July 30, 2016.

EBITDA. Men’s Sportswear and Swim EBITDA margin for the three months ended ~~July 29,~~October 28, 2017, increased ~~390~~810 basis points to ~~3.6%~~3.8%, from ~~(0.3%~~(4.3%) for the three months ended ~~July 30,~~October 29, 2016. The EBITDA margin was ~~favorably~~unfavorably impacted by ~~sourcing efficiencies and strong performance~~the settlement charge related to the termination of our ~~core brands, specifically Perry Ellis, Original Penguin, Nike and golf apparel businesses.~~defined benefit plan in the amount of $8.3 million during the three months ended October 29, 2016. Such expense did not occur during the three months ended October 28, 2017.

Men’s Sportswear and Swim EBITDA margin for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, increased ~~130~~330 basis points to ~~6.7%~~5.9%, from ~~5.4%~~2.6% for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The EBITDA margin was favorably impacted by sourcing efficiencies and the strong sales performance of our core brands, specifically our Perry Ellis, Original Penguin, Nike and golf apparel businesses.

Women’s Sportswear EBITDA margin for the three months ended ~~July 29,~~October 28, 2017 decreased 320 basis points to ~~(12.9%~~(5.2%) from ~~(9.7%~~(2.0%) for the three months ended ~~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 six months ended July~~October 29, ~~2017 decreased 180 basis points to (5.5%) from (3.7%) for the six months ended July 30,~~ 2016. The EBITDA margin was unfavorably impacted by the decrease in net sales described above. As a result of this decrease in ~~revenue,~~net sales, we were not able to realize favorable leverage in selling, general and administrative expenses.

Women’s Sportswear EBITDA margin for the nine months ended October 28, 2017 decreased 230 basis points to (5.4%) from (3.1%) for the nine months ended October 29, 2016. The EBITDA margin was unfavorably impacted by the decrease in net sales described above. As a result of this decrease in net sales, we were not able to realize favorable leverage in selling, general and administrative expenses.

Direct-to-Consumer EBITDA margin for the three months ended ~~July 29,~~October 28, 2017, increased ~~340~~290 basis points to ~~(5.1%~~(8.8%), from ~~(8.5%~~(11.7%) for the three months ended ~~July 30,~~October 29, 2016. The EBITDA margin was favorably impacted by the product sales mix as we focus ~~to be~~on being less dependent on everyday promotions.

Direct-to-Consumer EBITDA margin for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 ~~decreased 70~~increased 40 basis points to ~~(10.9%)~~(10.2)%, from ~~(10.2%~~(10.6%) for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The EBITDA margin was favorably impacted by the product sales mix as we focus on being less dependent on everyday promotions and thus increased our gross profit margin and achieved favorable leverage in selling, general and administrative expenses.

Licensing EBITDA margin for the three months ended October 28, 2017, decreased 100 basis points to 81.3%, from 82.3% for the three months ended October 29, 2016. The EBITDA margin was unfavorably impacted by the decrease in ~~revenue from our stores, as~~royalty income described above.

Licensing EBITDA margin for the ~~three~~nine months ended ~~July 29,~~October 28, 2017, ~~increased 260~~decreased 270 basis points to ~~74.6%~~76.3%, from ~~72.0%~~79.0% for the ~~three~~nine months ended ~~July 30,~~October 29, 2016. ~~The EBITDA margin was favorably impacted by reductions in selling, general and administrative expenses associated with the licensing segment.~~

~~Licensing EBITDA margin for the six months ended July 29, 2017 decreased 360 basis points to 73.8%, from 77.4% for the six months ended July 30, 2016~~. The EBITDA margin was unfavorably impacted by the decrease in royalty income described above.

Depreciation and amortization. Depreciation and amortization for the three months ended ~~July 29,~~October 28, 2017, was ~~$3.5~~$3.6 million, ~~a decrease~~an increase of ~~$0.2~~$0.1 million, or ~~5.4%~~2.9%, from ~~$3.7~~$3.5 million for the three months ended ~~July 30,~~October 29, 2016. The increase was attributed to depreciation related to our capital expenditures, primarily in fixtures, made during fiscal 2018.

Depreciation and amortization for the nine months ended October 28, 2017, was $10.6 million, a decrease of $0.1 million, or 0.9%, from $10.7 million for the nine months ended October 29, 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 six months ended July 29, 2017, was $7.0 million, a decrease of $0.2 million, or 2.8%, from $7.2 million for the six months ended July 30, 2016. The decrease is primarily reflected in the direct-to-consumerDirect-to-Consumer segment as a result of ten store closures since the second half of fiscal 2017.

Interest expense. Interest expense for the three months ended ~~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,~~October 28, 2017, was ~~$3.8~~$1.6 million, a decrease of $0.1 million, or ~~2.6%~~5.9%, from ~~$3.9~~$1.7 million for the ~~six~~three months ended ~~July 30,~~October 29, 2016. ~~This~~Interest expense for the nine months ended October 28, 2017, was $5.4 million, a decrease ~~was~~of $0.3 million, or 5.3%, from $5.7 million for the nine months ended October 29, 2016. These decreases were attributed to the lower average amount borrowed on our credit facility as compared to the prior year ~~period.~~periods.

Income ~~taxes.~~taxes. The income tax expense for the three months ended ~~July 29,~~October 28, 2017, was ~~$1.7~~$0.5 million, an increase of ~~$2.6~~$2.4 million, as compared to a tax benefit of ~~$0.9~~$1.9 million for the three months ended ~~July 30,~~October 29, 2016. For the three months ended ~~July 29,~~October 28, 2017, our effective tax rate was ~~63.8%~~13.3% as compared to ~~19.5%~~26.4% for the three months ended ~~July 30,~~October 29, 2016. ~~This~~The income tax expense for the nine months ended October 28, 2017, was $3.9 million, an increase isof $1.2 million, as compared to $2.7 million for the nine months ended October 29, 2016. For the nine months ended October 28, 2017, our effective tax rate was 18.7% as compared to 32.8% for the nine months ended October 29, 2016. These increases in tax expense were 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 expense for the six months ended July 29, 2017, was $3.4 million, a decrease of $1.1 million, as compared to $4.5 million for the six months ended July 30, 2016. For the six months ended July 29, 2017, our effective tax rate was 19.9% as compared to 29.8% for the six months ended July 30, 2016.million. The overall change in the effective tax rate for both periods 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).Net income (loss) for the three months ended ~~July 29,~~October 28, 2017, was ~~$1.0~~$3.2 million, an increase of ~~$4.6~~$8.4 million, or ~~127.8%~~161.5%, as compared to ~~a net loss of $3.6~~($5.2) million for the three months ended ~~July 30,~~October 29, 2016. Net income for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, was ~~$13.8~~$17.0 million, an increase of ~~$3.1~~$11.5 million, or ~~29.0%~~209.1%, as compared to ~~$10.7~~$5.5 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. ~~The~~These 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, acquisitions, and capital expenditures. We believe that our working capital requirements will increase for next year as we continue to expand internationally. As of ~~July 29,~~October 28, 2017, our total working capital was ~~$220.6~~$230.9 million as compared to $223.4 million ~~as of~~at January 28, 2017 and ~~$208.3~~$213.5 million as of ~~July 30,~~October 29, 2016. We believe that our cash flows from operations and availability under our senior credit facility and remaining letter of credit ~~facilities~~facility 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 ~~July 29,~~October 28, 2017, to be indefinitely reinvested and, accordingly, no United States income taxes have been provided thereon. As of ~~July 29,~~October 28, 2017, the amount of cash associated with indefinitely reinvested foreign earnings was approximately ~~$15.6~~$23.3 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 ~~$40.3~~$33.4 million for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, as compared to cash provided by operating activities of ~~$35.9~~$38.2 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016.

The cash provided by operating activities for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, iswas primarily attributable to a decreased inventory of ~~$21.3~~$23.0 million, due to improved inventory management, a decrease in accounts receivable of ~~$8.5 million, an increased income taxes payable of $1.4 million and an increase in unearned revenues of $2.0~~$5.5 million, as well as a decrease in prepaid income taxes, and prepaid expenses of ~~$1.6~~$1.7 million and $0.8 million, respectively. Additionally, cash was provided by an increase in income taxes payable of $1.0 million. This was partially offset by a decrease in accounts payable and accrued expenses of ~~$19.7~~$28.7 million, a decrease in unearned revenues of $3.0 million and a decrease in accrued interest payable of $1.1 million. Our inventory turnover ratio increased to ~~4.0~~3.9 as compared to ~~3.6~~3.8 in the prior period because of our continued focus on inventory management.

The cash provided by operating activities for the ~~six~~nine months ended ~~July 30,~~October 29, 2016, iswas primarily attributable to ~~a decrease in accounts receivable of $10.1 million,~~ decreased inventory of ~~$47.6~~$69.0 million due to improved inventory ~~management, an increase in unearned revenues and other liabilities of $3.5 million, as well as a decrease in prepaid income taxes of $1.9 million.~~management. This was partially offset by a decrease in accounts payable and accrued expenses of ~~$51.6~~$61.7 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.

Net cash used in investing activities was ~~$21.9~~$20.0 million for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, as compared to cash used in investing activities of ~~$10.4~~$12.2 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The net cash used in investing activities during the first ~~six~~nine months of fiscal 2018 primarily ~~reflects~~reflected the purchase of investments of ~~$28.1~~$37.0 million and the purchase of property and equipment of ~~$3.9~~$5.6 million primarily for leasehold improvements and store fixtures; offset by the proceeds from the maturities of investments in the amount of ~~$10.1~~$22.2 million and proceeds from notes receivable of $0.3 million.

We anticipate capital expenditures during the remainder of fiscal 2018 of ~~$8.0~~$4.0 million to ~~$9.0~~$5.0 million in new ~~office~~ leasehold improvements, technology, systems, retail ~~store leasehold improvements,~~stores, and other expenditures.

Net cash used in investing activities was ~~$10.4~~$12.2 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The net cash used in investing activities during the first ~~six~~nine months of fiscal 2017 primarily ~~reflects~~reflected the purchase of investments of ~~$9.0~~$12.5 million and the purchase of property and equipment of ~~$6.6~~$9.3 million primarily for leasehold improvements and store fixtures; partially offset by ~~the~~ proceeds from the maturities of investments ~~in the amount~~ of ~~$5.2~~$9.3 million.

Net cash used in financing activities was ~~$24.7~~$17.3 million for the ~~six~~nine months ended ~~July 29,~~October 28, 2017, as compared to ~~cash used in financing activities of $29.4~~$27.8 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The net cash used during the first ~~six~~nine months of fiscal 2018 primarily ~~reflects~~reflected net payments on our senior credit facility of ~~$22.5~~$14.6 million, ~~purchase~~purchases of treasury ~~shares~~stock of $0.9 million, payments for employee taxes on shares withheld upon vesting of ~~$0.8~~$1.0 million, payments of ~~$0.4~~$0.7 million on our mortgage loans and payments on capital leases of ~~$0.1 million.~~$0.2 million; partially offset by the proceeds from exercises of stock options of $24,000.

Net cash used in financing activities was ~~$29.4~~$27.8 million for the ~~six~~nine months ended ~~July 30,~~October 29, 2016. The net cash used during the first ~~six~~nine months of fiscal 2017 primarily ~~reflects~~reflected net payments on our senior credit facility of ~~$27.9~~$23.9 million, purchases of treasury stock of $2.2 million, payments for employee taxes on shares withheld upon vesting of $0.9 million, payments of ~~$0.4~~$0.6 million on our mortgage loans and payments on capital leases of ~~$0.1 million.~~$0.2 million; partially offset by the proceeds from exercises of stock options of $5,000.

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.~~2018. 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~~basis.

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

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 net 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 thewrite-off of note issuance costs. At ~~July 29,~~October 28, 2017 and January 28, 2017, the balance of the 7⁷⁄/₈% senior subordinated notes totaled $49.8 million and $49.7 million, respectively, net of debt issuance costs in the amount of $0.2 million and $0.3 million, respectively.

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 anynon-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~~our 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 (“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 as interest expense. At ~~July 29,~~October 28, 2017 ~~we had no outstanding borrowings under the Credit Facility. At~~and January 28, 2017, we had outstanding borrowings of $7.9 million and $22.5 million under the Credit ~~Facility.~~Facility, respectively.

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 anynon-compliance with any of our covenants in ~~this~~the 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, and (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 ournon-U.S. subsidiaries and all of our trademark portfolio.

As of ~~July 29,~~October 28, 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.

At ~~July 29,~~October 28, 2017 and January 28, 2017, there was ~~$19.3~~$19.4 million and $19.2 million, respectively, available under the existing letter of credit facilities.

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 a25-year amortization with the outstanding principal due at maturity. At ~~July 29,~~October 28, 2017, the balance of the real estate mortgage loan totaled ~~$21.1~~$21.0 million, net of discount, of which ~~$546,000~~$552,000 is due within one year.

In June 2006, we entered into a mortgage loan for $15 million secured by our Tampa facility. The loan was 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 a20-year amortization, with the outstanding principal due at maturity.

In November 2016, we amended the mortgage loan to increase the amount to $13.2 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 a25-year amortization with the outstanding principal due at maturity. At ~~July 29,~~October 28, 2017, the balance of the real estate mortgage loan totaled ~~$12.9~~$12.8 million, net of discount, of which approximately ~~$333,000~~$336,000 is due within one year.

We used the excess funds generated from the new mortgage loans described above to pay down our senior credit facility.

The real estate mortgage loans contain certain covenants. We are not aware of anynon-compliance with any of the covenants. If we violate any covenants, the lender under the real estate mortgage 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~~“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 ~~six~~nine months ended ~~July 29,~~October 28, 2017.

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 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, 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.

The total ~~gain (loss)~~loss relating to ~~hedging instruments~~Hedging Instruments reclassified to earnings ~~during~~for the ~~first~~three and ~~second quarter of fiscal 2018~~nine months ended October 28, 2017 was ~~$41,000~~$86,000 and ~~($33,000),~~$78,000, respectively. There was no gain or loss relating to ~~hedging instruments~~Hedging Instruments reclassified to earnings ~~during~~for the ~~first~~three and ~~second quarter of fiscal 2017.~~nine months ended October 29, 2016.

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 tore-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~~that 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 Rule13a-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 ~~July 29,~~October 28, 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.

There were no changes in our internal control over financial reporting during the quarter ended ~~July 29,~~October 28, 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 ~~July 29,~~October 28, 2017 and January 28, 2017		1

Condensed Consolidated Statements of Operations (Unaudited) for the three and ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016		2

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (Unaudited) for the three and ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016		3

Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~six~~nine months ended ~~July 29,~~October 28, 2017 and ~~July 30,~~October 29, 2016		4

Notes to Unaudited Condensed Consolidated Financial Statements		6

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations		2426

Item 3:

Quantitative and Qualitative Disclosures About Market Risk		3335

Item 4:

Controls and Procedures		3436

PART II: OTHER INFORMATION		36

Item 2:

~~Item 2:~~
Unregistered Sales of Equity Securities and Use of Proceeds		3536

Item 6:

Exhibits		3637


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


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs
July 30, 2017 to August 26, 2017⁽¹⁾		71	$	17.72		—	$	8,278,199
August 27, 2017 to September 30, 2017⁽¹⁾		9,243	$	21.97			$	8,278,199
October 1, 2017 to October 28, 2017⁽¹⁾		377	$	22.29			$	8,278,199


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.


			Perry Ellis International, Inc.

~~August 31,~~December 1, 2017
	By: ~~/S/ DAVID RATTNER~~	/S/ JORGE NARINO
		~~David Rattner,~~Jorge Narino, Interim Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)


		Three Months Ended				Nine Months Ended
Derivatives Designated As Hedging Instruments	Statement of Operations Location	October 28, 2017		October 29, 2016		October 28, 2017		October 29, 2016
		(in thousands)				(in thousands)
Foreign currency forward exchange contract (inventory purchases):
Loss reclassified from accumulated other comprehensive loss to income	Cost of goods sold	$	86	$	—	$	78	$	—

		$	86	$	—	$	78	$	—


	(in thousands)
2018	$	835
2019	$	793
2020	$	734
2021	$	543

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth