Tailored Brands increases expectations following earnings boost
Tailored Brands announced on Wednesday its third quarter financial results, and it updated its full year adjusted earnings per share guidance.
Doug Ewert, President and Chief Executive Officer of Tailored Brands, said, "Based on our third quarter results and our outlook for the balance of the year, we are updating full year 2016 adjusted EPS expectations to $1.70 to $1.85 per diluted share from our previous range of $1.55 to $1.85 per diluted share. Our updated full year guidance reflects our expectation for Jos. A. Bank comparable sales to be up mid-to-high-single-digits and Men's Wearhouse comparable sales to be down slightly in the fourth quarter.”
Men’s Wearhouse total net sales decreased 0.8% $461.8 million and comparable sales increased 0.1%, while Jos. A. Bank total net sales decreased to $166.0 million and comparable sales decreased 9.8%. According to Ewert, the flat comparable sales were a result of softer traffic, which began around Father’s Day, but the company plans to increase consumer interest with premium clothing, custom clothing and performance wear including the Kenneth Cole Awear-Tech label that launched in November.
K&G and Moores posted comparable sales decreases at 9.8% and 0.4%, respectively, and the Corporate Apparel segment increased 30.0%.
Total gross margin increased 1.1% to $377.2 million and retail gross margin increased 161 basis points to 45.9%. Net earnings were $28.4 million compared to $27.2 million in the prior year, and diluted EPS was $0.58 versus $0.56 in the prior year.
"Our improved profitability this quarter reflects solid progress on our cost reduction initiatives as we continue to navigate the turnaround of Jos. A. Bank and a choppy retail environment," said Ewert. “In addition, we continued to strengthen our omnichannel capabilities during the third quarter, which we believe will help drive additional traffic as we make it easy for customers to shop with us both online and in-store. “
For the nine-month period, net sales decreased 3.2% to $2,585.4 million, retail segment sales decreased 5.0% to $124.5 million, and corporate apparel sales increased 21.1% to $39.3 million. Total gross margin decreased 2.9% to $1,139.4 million due to a decrease in retail segment net sales, and total gross margin, as a percentage of net sales, increased 14 basis points.
Net earnings for the nine months were $55.0 million compared to $31.0 million in the previous year, and diluted EPS was $1.13 versus $0.64 in the prior year.
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