“BOGO” was a “no-go” for The Men’s Wearhouse Inc. in the second quarter.
The nation’s largest men’s specialty store retailer, currently in the midst of a “buy one, get one for $100” suit promotion, saw its shares fall more than 14 percent in after-hours trading Wednesday after it missed consensus estimates on both the top and bottom lines and lowered its full-year estimates for earnings and sales.
In the three months ended Aug. 3, net income fell 27.7 percent to $42.9 million, or 85 cents a diluted share, from $59.4 million, or $1.15, in the prior-year quarter. Sales eroded 2.3 percent to $647.3 million from $662.3 million in the comparable 2012 period, with all four categories — retail clothing product; tuxedo rental services; alterations and other services, and corporate apparel — down at least 1 percent and tuxedo rentals down 4.2 percent.
Excluding special charges, earnings per share were $1.01, 13 cents below the consensus estimate of $1.14. Sales were expected to hit $669.7 million, $22.4 million higher than those tallied.
“Retail clothing sales during the second quarter were below our internal plan as we experienced a decline in customer traffic compared to last year’s second quarter,” said Doug Ewert, president and chief executive officer. “We believe this is primarily due to macro issues affecting the apparel retailing space.”
He said recent actions, including the acquisition of the parent company of Joseph Abboud for about $97.5 million and an accelerated share repurchase program, will, along with initiatives to expand margins and stores, “continue to unlock value for our shareholders into 2014 and beyond.”
The quarter was marked not only by the purchase of JA Apparel but also by a bruising battle with its founder, former ceo and longtime advertising spokesperson, George Zimmer, resulting in Zimmer’s resignation as a director of the company.
Abboud was named chief creative director of the company in December. Zimmer’s spot on the company’s board has been filled by Allen Questrom, former ceo of J.C. Penney Co. Inc., Federated Department Stores, Barneys New York and Neiman Marcus.
Sales were down on a net basis at all three nameplates — Men’s Wearhouse, K&G and Moores — and off on a same-store basis 2.1, 5.1 and 5.5 percent, respectively. Some of the declines were attributable to a shift in tuxedo rentals to the first quarter from the second quarter of 2012, the company said.
Full-year guidance for EPS was lower to $2.40 to $2.50, 30 cents lower than the prior projection. Projections for same-store sales were lowered 2 percent for Men’s Wearhouse and Moores. The company continues to seek strategic alternatives for the K&G unit.
Shares were down 24 cents, or 0.6 percent, to $38.77 in regular trading Wednesday, but fell an additional $5.45, or 14.1 percent, to $33.32 in the first hour after the results were released at 5:30 p.m.
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With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
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Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)