Menswear giant’s Q1 earnings, sales fall
Tailored Brands, owner of Men's Wearhouse, Jos. A Bank and other brands, turned in a disappointing first quarter performance amid slow sales at its core division.
Net earnings totaled $7.1 million, or 14 cents a share, for the quarter ended May 4, compared with $13.9 million, or 27 cents a share, a year ago. (Results for the most-recent quarter included $4.4 million in restructuring charges to pay severance and terminate leases.). Adjusted earnings came to 21 cents a share. Analysts were expecting earnings of 15 cents.
Revenue fell 4.5% to $781.4 million, but beating analysts' expectations of $776 million. Same-store sales fell 3.2%. By brand, same-store sales declined 4.5% at Men’s Wearhouse, 0.7% at Jos. A. Bank, 4.6% at Moores and 0.5% at K&G. The company cited fewer transactions and units per transactions and lower sales at Men’s Wearhouse in particular.
The retailer noted that, during the quarter, it launched new brand campaigns for both Men’s Wearhouse and Jos. A. Bank that are being leveraged across channels. As a result, advertising expense increased $3.8 million to $45 million during the quarter, primarily reflecting the launch of new brand campaigns for Men’s Wearhouse and Jos. A. Bank and more expensive local (instead of more economical national) broadcast media to support planned tests.
In March, Tailored Brands named executive chairman Dinesh Lathi as president and CEO, succeeding longtime chief executive Doug Ewert, who retired. Lathi, who has served as chairman of the company since 2017 and executive chairman since 2018, sounded a positive note in a statement.
“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,” said Lathi. “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. Our e-commerce team executed a robust portfolio of user experience and personalization tests, several of which have been pushed into production to increase conversion and average order values.”
For the second quarter, Tailored Brands projected earnings of 65 to 70 cents a share. Wall Street was looking for earnings of 81 cents a share.
Tailored Brands operates over 1,400 locations in the U.S. and Canada, under such banners as Men's Wearhouse, Jos. A. Bank, Joseph Abboud, Moores Clothing for Men and K&G. It also operates an international corporate apparel and workwear group consisting of Dimensions, Alexandra and Yaffy in the United Kingdom and Twin Hill in the United States.