Shares of Tailored Brands Inc. fell 27 percent to $17.10 in after-hours trading Wednesday as investors digested continuing sales declines and a disappointing outlook for the men’s wear retailer.
The company’s 2016 net earnings tallied $25 million, or 51 cents a diluted share, up from losses of $1 billion, or $21.26, a year earlier. Tailored Brand’s total operating income for the year came in at $132.8 million and compared with losses of $1.1 billion in 2015.
Sales for the year dropped by 3.4 percent to about $3.4 billion, a number that reflects what the company described as “significant store closures under the store rationalization program and decreases in comparable sales.”
“Fiscal 2016 was a year of significant strategic progress for Tailored Brands as we executed on our plans to right-size our store base, optimize our cost structure and return Jos. A. Bank to a path of sustained profitable growth,” said Doug Ewert, president and chief executive officer.
During 2016, the company closed 233 stores, recognized $60 million in cost savings and “stabilized and began to turn around” Jos. A. Bank, according to Ewert.
“Unfortunately, the challenging retail environment resulted in soft traffic across our retail brands, which drove lower than anticipated fourth quarter and full-year net sales and gross margins,” Ewert added.
Looking ahead to 2017, Ewert said the company is “striving for improved performance,” but projects earnings per share in the range of $1.45 to $1.75 on comparable-store sales declines in the low-single digits at Men’s Wearhouse and comp increases in the mid-single digits at Jos. A. Bank. Analysts were expecting profits this year to be considerably higher at $2.10 a share.