Men’s Wearhouse is in serious discussions to sell its K&G discount division, which it put on the block last year.

In a conference call Friday morning, Jon Kimins, chief financial officer, said the company is currently “in discussions with [a] party regarding a possible transaction. This party is presently engaged in detailed due diligence. And although we’re in these discussions there can be no assurance that the transaction will ultimately be consummated.”

Kimins did not disclose the identity of the party conducting due diligence. In December, Sycamore Partners, a private equity firm based in New York, surfaced as an interested bidder for K&G, according to bankers at the time. Sources familiar with Sycamore’s plans said that is no longer the case.

In the first quarter, K&G, which represents 15 percent of the company’s sales, posted a 1.2 percent decline in comparable-store sales, “considerably better than we had planned. Sales trends continue to strengthen and we’ve turned positive for the year,” said Doug Ewert, chairman and chief executive officer. He noted that over the past several months, the company has closed unproductive stores and those that remain “are contributing, and we’re pleased with the results. If we’re not able to consummate a transaction, we’re happy to keep working with it.”

Turning to the impending acquisition of Jos. A. Bank Clothiers, Kimmins said, “We’re on track to finalize the financing and close the merger.”

Men’s Wearhouse said it plans to launch a bond offering in the aggregate principal amount of $600 million of senior notes due 2022 in a private placement. The net proceeds from the senior note offering will be used to pay a portion of the $1.8 billion purchase price for Jos. A. Bank. The acquisition is likely to close later this month.

Kimmins said that once the deal is finalized, Men’s Wearhouse will host an investor day and roadshow to provide “more color about our strategic plans for the combined company.” He said that as a result of the pending acquisition, the company could not provide earnings-per-share guidance.

Late Thursday, Men’s Wearhouse reported that costs associated with its upcoming takeover of Jos. A. Bank Clothiers Inc. cut first-quarter profits in half as sales advanced.

In the three months ended May 3, net income declined 50.2 percent to $16.5 million, or 34 cents a diluted share, from $33.1 million, or 65 cents, in the year-ago period. Excluding $26.5 million in costs associated with the purchase of Bank and other initiatives, adjusted EPS was 69 cents, 2 cents better than expected, on average, by analysts.

Revenues also exceeded expectations, advancing 2.3 percent to $630.5 million. The year-ago figure was $616.5 million and the consensus estimate for the just-concluded quarter was for revenues of $627.7 million.

Sales at Men’s Wearhouse stores rose 4.8 percent to $421 million, with comparable sales up 2.9 percent, while Moores sales grew 4.8 percent to $52.5 million on a 6 percent comp increase despite the negative impact of currency fluctuation on the Canadian dollar.

Consumer response to the rollout of the Joseph Abboud-branded collection has been positive, Ewert said. “The suits from our New Bedford, [Mass.] factory are selling better than we anticipated and are among the bestselling suits in our inventory.” The suits are in around 250 stores and the rollout is now expected to be completed by the third quarter. Ewert noted that many of the customers buying Joseph Abboud product are “shopping in our stores for the very first time.”

He noted that margins on the product are “a little lighter than normal,” but that is typical as the company works to build a new business. In addition, it has increased its marketing spend to promote the new line, spending an incremental $5 million in the first quarter, with more to come later in the year. “But we believe that we’re going to get the lift to more than cover the expense,” Ewert said. 

Separately, Jos. A. Bank on Friday posted what is likely to be its final report of quarterly earnings as a freestanding public company.

For the first quarter ended May 3, the company swung to a net loss of $37.1 million, or $1.33 a diluted share, from net income of $8.1 million, or 29 cents, a year ago. The period included $75.4 million of strategic activity fees in connection with the termination fee for Eddie Bauer and merger activity with Men’s Wearhouse. Net sales rose 10.9 percent to $217.4 million from $196.1 million.