Tailored Brands disappoints with declining sales and earnings
Tailored Brands, Inc. reported decreases in sales and earnings for the second quarter on Wednesday, and also announced that it is suspending its quarterly cash dividend in order to reallocate the funds for debt repayment.
The American menswear retailer’s total net sales for the second quarter ended August 3, 2019, decreased 4.1% to $789.5 million, compared to $823.4 million in the prior-year period.
By channel, the company’s retail sales decreased 4.1%, largely due to a fall in comparable sales of 3.6%.
Comparable sales at Tailored Brands’ Men’s Wearhouse banner, which accounts for just over half of the company’s total sales, decreased 4.3%, while comparable rental services revenue at the chain fell 3.1%.
Comparable sales also decreased across the company’s other retail banners, declining 3.3% at Jos. A. Bank, 1.3% at K&G and 2.5% at Moores.
Tailored Brands’ corporate apparel business, which the company recently announced that it is selling for a cash consideration of $62 million, suffered from the impact of a weaker British pound and posted a net sales decline of 3.9% in the quarter.
The company’s quarterly net earnings totaled $34.3 million, or $0.68 per diluted share, down from $49.2 million, or $0.97 per diluted share, in the same period in the previous year.
“On our year-end call, we indicated that we had work ahead of us to transform our customer-facing experience to one that can generate sustainable and profitable growth,” said Tailored Brands President and CEO Dinesh Lathi in a release.
“Our sale of the corporate apparel business is consistent with our commitment to focused execution and investment,” he added, before going on to explain, “The board of directors’ unanimous decision to suspend the quarterly cash dividend for reallocation to debt repayment and share repurchases is consistent with our commitment to responsible allocation of capital.”
Year to date, Tailored Brands posted net sales of $1.57 billion, down 4.3% from $1.64 billion in the first half of 2018, while net earnings totaled $41.4 million, or $0.82 per diluted share, down from $63.1 million, or $1.24 per diluted share.
Looking forward to the third quarter, the company expects to see adjusted diluted EPS in the range of $0.40 to $0.45.
Following Tailored Brands’ announcement of its second-quarter results, shares in the company fell 33% in the extended session on Wednesday.
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