Perry Ellis Past the Snickers?

"All us angels wear Farah slacks." --Moe Syzlack.

OK, I know it's not funny to explain why things are funny, but the reason that line from The Simpsons is funny is because Moe is no angel. Despite the good deed he's doing at the time -- rescuing Homer from a major beating by flying him out of an arena -- Moe is, at the end of the day, a complete loser. And Moe, never shy of voicing his issues, points to one bit of evidence in his Farah slacks.

Yes, you can still get Farah slacks. They come from Perry Ellis International (NASDAQ:PERY). In fact, Farah isn't alone in the Perry Ellis stable. The firm owns 20 brands, several of which elicit the same responses: anything from a snicker to a disbelieving, "That's still around?" Munsingwear is another. Toss Original Penguin, Jantzen, and Gotcha into that pile as well. Gotcha? Yes, Gotcha. The acquisition was closed last month, and the company plans to relaunch this '80s brand in the spring.

Go ahead and snicker. Investors should like it when we all snicker at a long-lost brand, because that can mean major bucks for us on turnaround plays. Just ask me about Guess? (NYSE:GES) last year, or take a look at what American Eagle Outfitters (NASDAQ:AEOS) did for investors over the past five years.

But is Perry Ellis in a similar position to ramp up the profits? Let's take a look at the latest numbers. Today the firm posted record revenues of $850 million for the year ended Jan. 31. That's a 29% increase over the prior year, but the revenue jump owes 30% of the increase to an acquisition. There was only a 3% "organic" increase in "core menswear operations." No surprise, then, that earnings were only up 5.1% on a per-share basis, to $2.26.

Part of that was due to debt repayment, but part of it was due to margin difficulty right at the top line.

And there's the problem with these shares. The head-turning growth has been coming with acquisitions -- purchases that aren't being covered by current free cash flow. For the coming year, management is looking only for a 2% increase in sales, which will drive a 4%-ish increase in earnings.

How much do you want to pay for a slow-to-no-growing stable of snicker-worthy brands that won't have the sales and advertising leverage of a unified competitor like, say, Tommy Hilfiger (NYSE:TOM) or Polo Ralph Lauren (NYSE:RL)? Given the cash flow outlook, I'd say about $21 a share. That means you should leave these shares the hanger unless they hit the sales rack.

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Seth Jayson loves to invest in a growing, profitable joke. At the time of publication, he had shares of Guess?, and American Eagle Outfitters, but no positions in any company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.