The Men’s Wearhouse Inc. will expand its assortment of tailored clothing and sportswear targeted to a younger customer — but won’t be launching a women’s concept anytime soon.
Doug Ewert, president of the Houston-based retailer, said: “We’re having some great success with younger-fitting products, modern fitting, tailored clothing, fitted dress shirts, trimmer-fitting sportswear. We’re having some very nice sell-throughs in those categories, and it is our plan to expand those assortments throughout this year.”
Ewert made the comments late Wednesday during the company’s first-quarter earnings call. In the three months ended May 1, the tailored clothing giant reported net income of $13.6 million, or 26 cents a diluted share, 12 cents above analysts’ consensus estimates carried by Yahoo Finance and 158.9 percent above the $5.3 million, or 10 cents, reported in the 2009 quarter.
Net sales tallied $473.5 million, 2 percent above the $464.1 million reported in the comparable quarter last year. Clothing product sales rose 2.6 percent to $368.4 million from $359.1 million. Sales were up 2.4 percent at Men’s Wearhouse, to $318.3 million, and rose at the same rate on a comparable-store basis. Sales were off 6 percent at the firm’s K&G operation, to $98.3 million, and comps contracted 4.9 percent. Helped by the relative strength of the dollar, Moores in Canada generated a 21.3 percent sales increase, to $47.4 million, while comps, measured in Canadian dollars, were up just 0.2 percent.
The performance at K&G was below plan in the period. Ewert said: “Beginning in the first quarter, we moved too aggressively to increase our ladies presence and de-emphasize the men’s offerings at our K&G stores. Our initial expectations of those efforts have not been achieved in the first quarter, although our ladies category produced midsingle-digit positive comp-store sales, those results were much less than planned. We are making adjustments to our outlook and assume a slower rate of growth in this category.”
George Zimmer, founder and chairman, also denied published reports the company was planning to open a women’s wear chain. Zimmer said if the company were to test selling women’s, it would be “on the Web first, not in the stores.”
He also denied published reports that the company was considering opening outlet stores to combat those being rolled out by competitor Jos. A. Bank. Zimmer said: “I don’t think we’re going to go down that path. We will continue to promote at the 1,000 Men’s Wearhouse stores.”
The company projected second-quarter diluted EPS in a range of 75 to 78 cents, with the upper end just matching the consensus estimate prior to the earnings report. Comps at MW are expected to rise in the low-single digits but decline in the low- to mid-single digits at K&G. Moores is expected to be to flat to up in the low-single digits.
Shares ended the day at $18.67, up 15 cents or 0.8 percent, prior to the earnings announcement and rose 3 percent in the first hour of after-hours trading.