Men’s Wearhouse Q4 loss widens, weighed down by Jos. A. Bank costs

Fremont, Calif. – Men’s Wearhouse reported a loss of $35.9 million for the fourth quarter, compared with a loss of $30.5 million in the year-ago period, weighed down by costs related to its June 2014 acquisition of Jos. A. Banks.



Net sales increased 66% to $928.4 million from $560.6 million, aided by the addition of revenue from Jos. A. Bank.



By brand, same-store sales increased 6.8% at Men’s Wearhouse stores, 8.6% at Moores and 6.8% at K&G. Sales fell 6.6% at Jos. A. Bank.



Doug Ewert, CEO of Men’s Wearhouse, said the retailer has exceeded expectations in integrating Jos. A. Bank and achieving synergies since its acquisition of its one-time rival was completed in June 2014.



“In the nine months since the acquisition, Jos. A. Bank has transitioned many of the back office functions, began store training programs, began the work to instill its employees with the Men's Wearhouse culture, and launched tuxedo rental in all its Jos. A. Bank locations,” said Ewert. “All of this progress was made while exceeding our initial synergy run-rate target of $15 million as we ended the year with run-rate synergies of $35 million.”



For the full fiscal year, Men’s Wearhouse swung to a net loss of $400,000 from net income of $83.4 million. Total net sales increased 31% to $3.25 billion from $2.47 billion.



Ewert predicted sales growth at Jos. A. Bank this year and next, particularly after the company finishes system conversions.



"Fiscal year 2015 will be the year of strategic transition for Jos. A. Bank as we work on unlocking customer facing opportunities,” he said. “Much of this work lies in systems conversions, which will be completed in the second half of 2015. As such, we are looking forward to the growth in sales and gross margins that we anticipate achieving in late 2015 and into 2016. We continue to be confident in our 2017 EPS guidance which has now been increased to include K&G. We expect profits to accelerate in 2016 with rebounding sales after three consecutive years of negative comps at Jos. A. Bank, realized cost synergies and modest growth in the legacy business.”