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Tailored Brands stock drops to 17-month low

Tailored Brands (TLRD) stock fell to a 17-month low of $11.37 on Thursday as the specialty apparel retailer lowered its guidance for the fourth quarter and fiscal 2018. Investors remained concerned about the retail and corporate apparel company as they were unsatisfied with the forecast and the third quarter results.

A few traders have believed the stock to be a good investment and the current levels called for a buy. However, the majority of the analysts recommended a “hold” rating while expecting the stock to reach $20.33 in the next 52 weeks. The company and the retail sector have been facing challenges such as competitive pricing, marketing deficiency, and macro uncertainty, including trade tariffs and Brexit.

On Monday, Tailored Brands lowered its fourth-quarter outlook to reflect weaker-than-expected same-store sales at its Jos. A. Bank chain. The company also widened its adjusted loss per share guidance to the range of $0.34 to $0.29 per share from a prior range of $0.29 to $0.24 per share.

For the full year 2018, adjusted earnings guidance were reduced to the range of $2.25 to $2.30 per share from the previous range of $2.30 to $2.35 per share. Same-store sales were down 1.4% across the company for the holiday season. The company remained confident in its strategic initiatives for driving growth over the long term.

Analysts expect the company to report a loss of $0.29 per share on revenue of $788.7 million for the fourth quarter, and earnings of $2.30 per share on revenue of $3.24 billion for fiscal 2018.

Tailored Brands stock dips on weak Q3 revenue, guidance

In the recent third-quarter, earnings plunged 62% due to goodwill impairment charge as well as higher operating expenses. Retail net sales inched up 0.6% on higher retail clothing sales that drove positive 2.3% retail comparable sales. Brexit and the impact of weaker British pound have hurt corporate apparel net sales. The marketing strategies and not competitive pricing from department stores hurt the sales performance.

The stock is likely to remain choppy until the progress of management’s initiatives turned clear. The diminished price of the stock could be a tempting buy but analysts recommend investors not to satiate. For certain years, Tailored Brands has been struggling to reverse its sales after closing hundreds of stores and promotions cut back. The company has piled up a lot of debt due to its purchase of Jos. A. Bank in 2014.

Tailored Brands remained disappointed with the holiday sales report and lowered its forecast. Meanwhile, analysts believe that the guidance cut could be linked to the pulling back of spending by the consumers or management factoring in trade/China uncertainty. Traders fear that the mall retailers have been struggling against online e-commerce. The road could be tough as competition invariably increases.

Shares of Tailored Brands opened lower on Thursday but changed course to the green territory. The stock has fallen over 46% in the past year and over 50% in the past three months.

 

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text.

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