Men's Wearhouse Profit Falls, But Tops Estimate

(RTTNews) - Men's Wearhouse Inc (MW) on Wednesday reported a plunge in second-quarter profit as the clothing retailer incurred costs related to its purchase of Jos A. Bank. Earnings, however, surpassed Wall Street estimates on same-store sales growth at its namesake and other brands as well as strong performance at the tuxedo rental business.

In June, Men's Wearhouse closed its $1.8 billion acquisition of smaller rival Jos. A. Bank Clothiers, ending a prolonged takeover tussle between the two companies. The combined business would operate 1,700 stores and generate annual sales of $3.5 billion on a pro forma basis.

Men's Wearhouse said that same-store sales at its namesake brand rose 4.4 percent for the quarter, and climbed 10.2 percent at Moores, its Canadian brand. Same-store sales at K&G brand rose 5.6 percent and Jos A. Bank climbed 1 percent.

Men's Wearhouse, based in Houston, Texas, posted quarterly net earnings to stockholders of $12.3 million $0.25 a share, compared with $42.9 million or $0.85 a share last year.

Results for the recent quarter included acquisition and integration charges of about $35 million and other expenses of $5 million.

Excluding items, adjusted earnings for the quarter were $1.10 a share, compared with $1 a share last year.

On average, four analysts polled by Thomson Reuters expected earnings of $1.06 a share for the quarter. Analysts' estimates typically exclude one-tine items.

Men's Wearhouse's sales for the quarter increased 24 percent to $803 million from $647 million a year ago. Four analysts had a consensus sales estimate of $894 million for the quarter.

Jos A. Bank contributed $113.7 million in sales since the closing of its acquisition in June, the company said.

Gross margin for the quarter dropped to 44.65 percent from 47.71 percent last year.

Men's Wearhouse stock closed Wednesday at $53.87, down $0.19 or 0.35%, on a volume of 0.73 million shares on the NYSE. In after hours, the stock gained $1.00 or 1.86%.