Men's Wearhouse Results Miss Estimates

(RTTNews) - Men's Wearhouse, Inc. (MW) said Wednesday Wednesday after the markets closed that its third quarter profit plunged 82% from last year, hurt mainly by costs related to the acquisition of smaller rival Jos. A. Bank Clothiers even as revenue increased 37.3%.

The company's quarterly earnings per share, excluding item, also came in below analysts' expectations as did it quarterly revenue.

Doug Ewert, Men's Wearhouse chief executive officer, said, ""We continue to be pleased with the progress we are making on the Jos. A. Bank integration. We remain confident in our 2017 guidance and our cost synergy run-rate at the end of the third quarter is well ahead of our original $15 million projection for the end of the 2014 fiscal year and our systems conversions are on target."

The company also said that it has completed its strategic review of its K&G chain and has concluded that continuing to operate the business as a part of its overall portfolio will provide the most value to its shareholders. As part of the review, it considered offers to acquire the business, none of which were acceptable, the company revealed.

Men's Wearhouse shares are currently losing 0.28% in after hours trading after closing the day's regular trading session at $42.21, down $1.48 or 3.39%. The shares trade in a 52-week range of $41.83 to $59.10.

Men's Wearhouse is a specialty retailer of men's apparel with 1,760 stores operating under The Men's Wearhouse, Jos. A. Bank, Moores and K&G brands. Men's Wearhouse closed its $1.8 billion acquisition of Jos. A. Bank Clothiers in June, ending a prolonged takeover tussle between the two companies.

Net sales at the company's largest brand, Men's Wearhouse, which represented 49% of total third quarter sales, were up 2.0% from a year earlier and comparable sales increased 2.2%.

Moores, the company's Canadian retail brand, was 8% of the total third quarter sales and had a comparable sales increase of 8.8%. K&G was 8% of the company's total third quarter sales with a comparable sales increase of 4.4%.

Jos. A. Bank represented 26% of the company's total third quarter sales, but its comparable sales for the quarter fell 8.1%. "Jos. A. Bank's comparable sales were slightly below our internal expectations but, as part of our operating strategy for the brand, we are very encouraged by the positive increase of 123 basis points in the maintained product margin rate," said Ewert.

For the third quarter ended November 1, 2014, the company reported net income of $6.8 million or $0.14 per share, compared to $38.2 million or $0.79 per share for the year-ago quarter.

Excluding items, adjusted net income for the third quarter was $40.1 million or $0.83 per share, compared to $43.1 million or $0.90 per share in the prior year quarter.

On average, 6 analysts polled by Thomson Reuters expected the company to earn $0.87 per share for the third quarter. Analysts' estimates typically exclude special items.

Total net sales for the third quarter rose 37.3% to $890.64 million from $648.89 million in the same quarter last year. Six analysts had a consensus revenue estimate of $912.42 million for the third quarter.