Specialty apparel retailer Tailored Brands (TLRD) reported a 62% dip in earnings for the third quarter due to goodwill impairment charge as well as higher operating expenses. The bottom line exceeded analysts’ expectations. The stock plunged over 22% in the after-market session following the company’s weak top-line and guidance.
Net income dropped 62% to $13.9 million and earnings plunged 64% to $0.27 per share. The results included goodwill impairment charges related to corporate apparel business, the repricing of the term loan, the retirement of former CEO, and closure of a rental product distribution center in the second quarter. Adjusted earnings grew 35% to $1.01 per share.
Total net sales inched up 0.2% to $812.7 million. Retail net sales rose 0.6% primarily due to an increase in retail clothing sales, which drove positive 2.3% retail comparable sales. This was partially offset by a $7.3 million decrease in alteration and other services primarily resulting from the MW Cleaners divestiture.
Corporate apparel net sales decreased 3.6% primarily due to lower sales in the United Kingdom associated with uncertainty surrounding Brexit, as well as the impact of a weaker British pound this year.
Looking ahead into the fourth quarter, the company expects a loss in the range of $0.29 to $0.24 per share. Corporate apparel net sales are predicted to be $55 million to $60 million. Comparable sales for Men’s Wearhouse is predicted to be down low-single-digits while that for Jos. A. Bank and Moores each is expected to be up low-single-digits. K&G comparable sales are projected to be flat-to-up slightly.
For the fiscal year 2018, Tailored Brands lowered its adjusted earnings guidance to the range of $2.30 to $2.35 per share from the prior range of $2.35 to $2.50 per share. Capital expenditures are now anticipated to be about $90 million, down from the prior estimate of about $100 million.
Comparable sales for Men’s Wearhouse is now predicted to be flat-to-up slightly while that for Jos. A. Bank and Moores is each expected to be up low-single-digits. K&G comparable sales are projected to be flat-to-up slightly for the full year.
The company now expects corporate apparel net sales to decrease by a mid-single-digit percentage in fiscal 2018, primarily due to continued soft trends in the UK business, versus previous guidance of a low-single-digit percentage decrease.
The company continues to expect about net 10 store closures in 2018 resulting from its continuous review of its real estate portfolio for opportunities to optimize its fleet as lease terms expire.
For the third quarter, Men’s Wearhouse comparable sales increased 1.7% helped by an increase in average unit retail for clothing. The company expects to report comparable rental services revenue in the fourth quarter of up low-single-digits versus last year and still expects to report a mid-single-digit decrease in rental services revenue for fiscal 2018.
Jos. A. Bank comparable sales grew 3.8% primarily due to an increase in both transactions and average unit retail. K&G comparable sales increased 4% due to rises in transactions, units per transaction and average unit retail. Moores comparable sales rose 1.2% on higher transactions.
Shares of Tailored Brands ended Wednesday’s regular session up 1.51% at $20.14 on the NYSE. The stock has fallen over 7% in the year so far and over 15% in the past three months.
Get access to timely and accurate verbatim transcripts that are published within hours of the event.
Most Popular
CVX Earnings: Chevron reports lower revenue and profit for Q3 2024
Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to
Key highlights from Exxon Mobil Corporation’s (XOM) Q3 2024 earnings results
Exxon Mobil Corporation (NYSE: XOM) reported its third quarter 2024 earnings results today. Total revenues and other income remained relatively flat at $90 billion compared to the same period a
AAPL Earnings: Apple Q4 2024 sales rise 6% YoY, beat estimates
Apple Inc. (NASDAQ: AAPL) reported an increase in revenues for the fourth quarter of 2024. The top line came in above estimates. The gadget giant generated revenues of $94.9 billion