Upscale menswear firm Perry Ellis International (NASDAQ: PERY) is the latest firm to hit Wall Street with a bleak outlook on retail sales. This morning, the company unveiled its preliminary third-quarter results and dramatically slashed its earnings guidance for fiscal 2009. Chairman and CEO George Feldenkreis warned, "Our retail partners are expecting an extremely promotional Christmas season, but at this point, we have no visibility on what the Thanksgiving weekend and the Christmas season will bring."

In the third quarter, PERY anticipates diluted earnings per share of 30 to 33 cents per share, compared to 55 cents in the same quarter of 2007. Revenue for the period is expected to decline 2% from last year to $222.8 million. The final results will be released on November 20, ahead of the opening bell.

Looking ahead to 2009, the clothing concern trimmed its fiscal-year earnings guidance from $1.67 to $1.72 per fully diluted share to a range between 90 cents and $1.10 per fully diluted share. The updated forecast accounts for one-time expenses of 10 to 15 cents per share related to a strategic review of the company's brands and businesses. Revenue for 2009 is now projected to fall between $875 million and $900 million, down from a prior forecast of $910 million to $925 million.

Feldenkreis noted that the formal review process should help make PERY "a stronger and more nimble company when the economy turns around."

In light of today's slashed forecast and uncertain outlook from Perry Ellis, the stock could be hit with downgrades or price-target cuts. Zacks reports that 3 out of 5 analysts following the shares maintain a bullish Strong Buy opinion, while Thomson Financial pegs the average 12-month price target at $16.40. This consensus estimate implies an expected upside of 211% from PERY's closing price on Wednesday -- leaving ample opportunity for potential downward revisions.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.