Men's Wearhouse Cuts Outlook On Jos. A. Bank Traffic Decline; Stock Plunges

(RTTNews) - The Men's Wearhouse (MW) lowered its third quarter adjusted earnings per share outlook to be in the range of $0.46 to $0.51 from its previous expectation of $0.87. Analysts polled by Thomson Reuters expect the company to earn $0.99 per share for the quarter. The company's stock plunged 28 percent to $28.86 in the after-hours trading.

The company's third quarter comparable sales decreased 14.6% at Jos. A. Bank, far below its earlier expectations, primarily driven by a decline in traffic as it began the transition away from the Buy-One-Get-Three promotional events.

Looking ahead, the company currently forecast fourth quarter comparable sales at Jos. A. Bank to decrease between 20% and 25% resulting from both a decline in traffic continuing from the third quarter trend and a previously expected decline in units per transaction as customers adapt to the shift in the promotional strategy.

The company also slashed its fiscal 2015 adjusted EPS outlook to the range of $1.75 to $2.00, versus previous guidance of $2.70 to $2.90, while analysts estimate $2.78 per share.

Doug Ewert, Men's Wearhouse chief executive officer, stated, "We are obviously disappointed by the third quarter results at Jos. A. Bank. Toward the end of the quarter, we reduced the number of Buy-One-Get-Two Free and Buy-One-Get-Three Free days in anticipation of our final Buy-One-Get-Three Free event. While we expected top-line volatility, as we previously stated, we did not anticipate that the impact from the traffic decline would occur to this degree, primarily because the prior year comparisons got progressively easier as the quarter progressed. We also believed the timing of the final Buy-One-Get-Three Free event in October would do more to offset earlier traffic declines than it did,"