The changes continue to come fast and furiously at Tailored Brands, with Mary Beth Blake, a longtime company executive who served most recently as president of the Jos. A. Bank Clothiers division, exiting the corporation.
In reporting lower third-quarter results Wednesday afternoon, the Fremont, Calif.-based retailer said the divisional president role has been eliminated and Carrie Ask, who had been president of the Men’s Wearhouse and Moores division, has been named to the newly created position of chief customer officer.
“We believe the new structure heightens our focus and ability to unlock value across our brand portfolio and will enable us to show up for our customers in more effective and efficient ways,” said chief executive officer Dinesh Lathi. “After more than a decade of impactful leadership at Tailored Brands, Mary Beth Blake, brand president, Jos. A. Bank, is resigning from the company. We are immensely grateful for everything Mary Beth has done to enhance our performance and we wish her the best in her future endeavors.”
Lathi took over the helm at the men’s retail chain last March after the departure of Doug Ewert as ceo. Since that time, he has parted ways with many of the company’s longtime executives and filled the company’s ranks with new faces.
But so far, improvement has been slow to come.
In the fiscal third quarter ended Nov. 2, Tailored Brands reported a net loss of $89.6 million compared to a profit of $13.9 million in the third quarter of last year. Net sales dropped to $729.5 million from $751.7 million in the third quarter of last year.
Net earnings from continuing operations were $27.8 million, down from $34.8 million in the year-ago quarter.
Third-quarter 2019 pre-tax results include $6.2 million of charges made up of $5.5 million in consulting costs, $600,000 in severance costs and $100,000 in lease termination costs, the company said.
The loss from discontinued operations, the company said, was $117.4 million as compared to a loss of $20.9 million in the 2018 third quarter.
Men’s Wearhouse reported a comparable-store sales decrease of 2.8 percent due primarily to a decline in both transactions and units and a drop in rental revenue of 2.6 percent. Moores in Canada had a 5.5 percent drop in comps while K&G’s same-store sales were down 1.5 percent. Only Jos. A Bank had positive comps in the period, with an increase of 0.5 percent.
In the company’s analyst call late Wednesday, Lathi pointed to several areas of strength in terms of merchandise. The custom business, which has been strong in recent years, “continues to perform well,” he said, with about $5.5 million per week in custom clothing sales, a figure that represents double-digit growth year-over-year. However, he did express a note of caution, saying that while the company is “still seeing healthy growth in the custom business,” the category is beginning to “moderate and track in line with overall business seasonality as we approach a healthy equilibrium in the eyes of our customers between custom and off-the-rack clothing.”
Sales of “polished casual” merchandise across multiple categories at both Joseph Abboud and Men’s Wearhouse were also a bright spot, he said. Prior to the third quarter, he said sportswear had not posted a positive comp since the second quarter of 2016.
But despite Lathi’s best efforts to put a positive spin on the results, the stock continued to fall. It closed at $4.85 Wednesday, down 8.1 percent, and continued to decline after the close, dropping 1.4 percent in after-market trading. “We are in the midst of a transformation. That transformation takes time and that we are executing our transformation in a challenging retail environment. None of that has changed, which means we’ll continue to approach our customer-facing and cost-saving execution with the same rigor and urgency that we have over the last 12 months,” he said.
The company also provided outlook for the fourth quarter, with a diluted loss per share now expected to be in the range of 50 cents to 55 cents and comparable-store sales down 1 percent to up 1 percent at Men’s Wearhouse and Jos. A. Bank, flat to up 2 percent at K&G and down 6 percent to 8 percent at Moores.