The Men’s Wearhouse Inc. felt the effects of poor weather in the fourth quarter but has seen the new fiscal year get off to a strong start.
Reporting financial results hours after shaking hands on the deal to acquire Jos. A. Bank Clothiers for $65 a share, or about $1.8 billion, the Fremont, Calif.-based men’s specialty retailer reported that, in the fourth quarter ended Feb. 1, its net loss widened to $30.4 million, or 64 cents a diluted share, from a loss of $3.4 million, or 7 cents, in the final quarter of 2012. Excluding $19 million in pretax special charges for items including impairment, the acquisition and integration of JA Apparel and costs associated with the closure of K&G’s e-commerce functions and “separation costs associated with former executives,” the adjusted loss was 38 cents a share, well beyond the 13-cent loss expected, on average, by analysts.
The company’s top line also came in below estimates, declining 7.9 percent to $560.6 million versus a year-ago level of $608.4 million and expectations of revenues of $611.7 million among analysts.
Even adjusting to eliminate the effect of the 14-week fourth quarter in 2012, the Men’s Wearhouse division’s comps fell 2.5 percent in the fourth quarter. Doug Ewert, president and chief executive officer, estimated that one-quarter of the decline was due to closures caused by inclement weather.
“We were not immune to the effects of weak consumer spending sentiments and severe weather disruption that impacted most retailers in December and January,” he said.
The company took steps to combat the tepid selling climate, including higher advertising expenditures last month as the first quarter of the new retail fiscal year began.
“Subsequently, we have seen business improve significantly in February, as both Men’s Wearhouse and Moores finished the month with approximately 3 percent and 9 percent comparable-sales increases, respectively, overcoming additional weather-related store closures,” Ewert added.
Shares of Men’s Wearhouse, up 4.7 percent to $57.14 during the trading day following news of the Jos. A. Bank deal, slid 1.3 percent back to $56.39 in after-hours trading following the release of results.
For the full year, net income fell 36.4 percent to $83.8 million, or $1.70 a diluted share, from $131.7 million, or $2.55. Revenues were off 0.6 percent to $2.47 billion from $2.49 billion.