The woes continued at Tailored Brands in the first quarter.
On Wednesday, the Fremont, Calif.-based retailer reported net income for the quarter fell to $7.1 million, or 14 cents a diluted share, from $13.9 million, or 27 cents, a year earlier. Results for the most-recent quarter included $4.4 million in restructuring charges to pay severance and terminate leases.
Adjusted earnings per share fell to 21 cents from 50 cents a year earlier.
Sales for the three months ended May 4, decreased 4.5 percent to $781.4 million from $818 million. On a comparable-store basis, sales also declined at each division, falling 4.5 percent at the flagship Men’s Wearhouse, 0.7 percent at Jos. A. Bank, 4.6 percent at Moores in Canada and 0.5 percent at K&G. Sales at the corporate apparel division dropped the most, posting a 10.1 percent decline in the period.
The company attributed much of the soft showing to fewer transactions and units per transactions, and cited lower clothing sales at Men’s Wearhouse in particular.
Investors were already on guard and sent shares of the company down 6.1 percent in regular trading Wednesday only to go further after the results came out, pushing the stock down another 6 percent to $5.54 after hours.
Dinesh Lathi, the new president and chief executive officer, did his best to put a positive spin on the results, saying comps at Jos. A. Bank and Moores were ahead of expectations and EPS exceeded guidance. But “we still have work ahead of us,” he said on a call with analysts after the results were released.
“While we are on a journey to evolve our business to more fully meet our customers’ needs and wants, we made good progress in the first quarter against our strategic initiatives. Our custom business posted another strong quarter as we continued to respond to our customers’ demand for personalized products and services that help them look their best in the moments that matter. Our e-commerce team executed a robust portfolio of user experience and personalization tests, several of which have been pushed into production to increase conversion and average order values. Finally, as we seek an optimized creative mix between promotional and storytelling advertising and an enhanced channel mix between broadcast and digital, we launched new brand campaigns for both Men’s Wearhouse and Jos. A. Bank that are being leveraged across channels.”
He said the custom suit business, which exceeded $220 million in 2018, was running at a $6 million a week pace in the first quarter, double that of the results in the first quarter of last year. He also pointed out that the reason Jos. A. Bank performed better than Men’s Wearhouse in the period is that its sales of custom garments managed to offset declines in off-the-rack clothing. That wasn’t the case with the flagship Men’s Wearhouse division.
Lathi said the company’s ongoing work to provide more personalized product, improve its omnichannel experience and enhance its storytelling rather than merely focus on promotions is ongoing and, while he declined to provide guidance for the full year, he’s expecting an improvement as they initiatives take hold later in 2019. He pointed to an “enhanced visual merchandising package” that has been installed in 80 stores so far that include a more elevated presentation, more graphics and mannequins and a reduction of stock on the floor, “give us confidence.”
Even so, the company projected that in the second quarter, EPS are expected to be 65 cents to 70 cents with comparable sales down 3 percent to 5 percent at Men’s Wearhouse, 2 percent to 4 percent at Jos. A. Bank and Moores, and 2 percent at K&G.