Specialty apparel retailer Tailored Brands (NYSE: TLRD) reported lower sales and earnings for the first quarter of 2019, reflecting the continued slump in demand amid stiff competition. The results came in above Wall Street’s forecast. Meanwhile, the company’s stock fell sharply Wednesday evening after its guidance missed estimates.
First-quarter profit, adjusted for one-off items, decreased to $0.21 per share from $0.50 per share last year but surpassed analysts’ estimates and the company’s own guidance. On a reported basis, the company posted net income of $7.1 million or $0.14 per share, compared to $13.9 million or $0.27 per share in the first quarter of 2018.
There was a 3.2% decrease in retail comparable store sales during the three-month period. Consequently, net sales declined 4.5% annually to $781.4 million but exceeded the estimates. Corporate apparel net sales slipped 10%, hurt by lower replenishment demand in the local market and unfavorable exchange rate of the British pound compared to last year.
Adjusted profit decreased to $0.21 per share from $0.50 per share last year but surpassed analysts’ estimates
Tailored Brands CEO Dinesh Lathi said, “While we are on a journey to evolve our business to more fully meet our customers’ needs and wants, we made good progress in the first quarter against our strategic initiatives. Our custom business posted another strong quarter as we continued to respond to our customers’ demand for personalized products and services that help them look their best in the moments that matter.”
Looking ahead, the company expects adjusted earnings to be in the range of $0.65 per share to $0.70 per share in the second quarter, which is below the consensus estimate. Corporate apparel net sales are expected to drop between 4% and 6%.
Comparable sales at Men’s Wearhouse are seen falling 3%-5% and those of Jos. A. Bank by 2%-4%. K&G same-store sales are expected to be down 2% to flat. Moores comparable sales are projected to decline in the 2%-4% range. The company expects to close down seven stores during the July quarter, primarily at Jos. A. Bank.
Shares of Tailored Brands fell about 60% since the beginning of the year and 78% in the past twelve months. The stock closed Wednesday’s regular session sharply lower and lost further after the earnings report.