Dividend Suspension
The board has decided to suspend the dividend payout from the fourth quarter. The company plans to deploy the cash for debt repayment and share repurchases. As a part of the suspension, the retailer expects to have $36.5 million annually, which can be used for intended purposes.
It’s worth noting that Tailored Brands has allocated $48 million for share repurchases under its previously authorized 2013 share repurchase program.
Below Par Outlook
For the third quarter, the company is guiding adjusted earnings of 40-45 cents per share as the sales is expected to be weaker across the board. The outlook is about 50% below the analyst estimates of 88 cents per share on sales of $763.7 million.
For the fiscal 2019 period, the street is anticipating top line of $3 billion and non-GAAP earnings of $1.66 per share.
Q2 Performance
Sales dropped 4.1% to $789 million while adjusted earnings decreased 23% to 82 cents. Retail comp-store sales continued its negative growth trend from the past two quarters. Same-store sales dropped 3.6% compared to a growth of 1.7% reported last year.
On the flip side, the street was expecting earnings of 74 cents per share on sales of $789 million.
In order to focus on its core business, last month Tailored Brands sold its corporate apparel division for $62 million. The retailer also raised its adjusted earnings guidance for the second quarter. For the Q2 period, non-GAAP EPS was expected in the range of 78-80 cents compared to the prior estimate of 65-70 cents per share.
In order to address the changing consumer trends, the company is focusing on offering customized offerings to its customers and improve shopping experience across all the channels.