Tailored Brands’ Q3 sales miss Street, lowers outlook
Deena M. Amato-McCoy
Lower transactions at its Men's Wearhouse brand took a toll on Tailored Brands’ third quarter sales.
The parent company of brands including Men's Wearhouse and Jos. A. Bank earned $13.9 million, or 27 cents a share, for the quarter ended Nov. 3, compared with $36.9 million, or 75 cents a share, for the same period a year ago. Adjusted for one-time items, the company earned $51.4 million, or $1.01 a share, compared with $36.9 million a year ago.
Total net sales increased 0.2% to $812.7 million, compared to $811 million a year ago. Analysts expected sales of $819 million.
Retail net sales increased 0.6% primarily due to an increase in retail clothing sales, which drove positive 2.3% retail comparable sales. This was partially offset by a $7.3 million decrease in alteration and other services primarily resulting from the MW Cleaners divestiture.
“All retail brands delivered positive comparable sales. Our sales growth was driven primarily by custom suiting, which we sold at an average rate of $5 million per week, up 150% versus last year,” said Tailored Brands executive chairman Dinesh Lathi. “As the third quarter progressed, we saw a softening of comparable sales due to lower transactions at Men’s Wearhouse and that trend continued into November.”
This also prompted the company to take a “more cautious outlook” on the fourth quarter. Tailored Brands now expects an adjusted diluted loss per share in the range of 24 cents to 29 cents. By brand, the company expects Men’s Wearhouse same-store sales to be down low-single-digits; Jos. A. Bank to be up low-single-digits, and Moores to be up low-single-digits. K&G is expected to be flat-to-up slightly.
Tailored Brands also adjusted its full year outlook for fiscal 2018. The company expects to achieve adjusted diluted EPS in the range of $2.30 to $2.35, versus its previous range of $2.35 to $2.50.
Comparable sales for Men’s Wearhouse will be flat-to-up slightly versus previous guidance of up low-single-digits. Jos. A. Bank will be up low-single-digits. Moores to be up low-single-digits and K&G to be flat-to-up slightly.
The company continues to expect approximately 10 store closures in 2018, resulting from its continuous review of its real estate portfolio for opportunities to optimize its fleet as lease terms expire.