Men's Wearhouse
by Brian Lipton

Men's WearhouseTailored Brands, Inc, owner of Men’s Wearhouse and Jos. A Bank, saw its stock plunge over 28 percent in early Wednesday morning trading, after it announced consolidated financial results for the fiscal fourth quarter and full year ended January 28, 2017. At 9:45 a.m., the stock was trading at $16.70 per share, after closing Tuesday at $23.27 per share.

Fourth quarter 2016 GAAP diluted loss per share was $0.62, compared to a loss of $21.86 in the same period a year ago.  Full year 2016 GAAP diluted earnings per share was $0.51, compared to GAAP loss per share of $21.26 last year. Net earnings for fiscal 2016 were $25.0 million compared to a net loss of $1,026.7 million last year.

Total net sales for the quarter decreased 3.9 percent to $793.3 million.  Net sales for the fourth quarter at Men’s Wearhouse decreased 3.7 percent and comparable sales decreased 2.2 percent from last year’s fourth quarter, resulting primarily from decreases in both average transactions per store and average unit retail  Comparable rental services revenue increased 9.4% in the fourth quarter of 2016.

Jos. A. Bank’s net sales for the fourth quarter decreased 4.7 percent due to significant store closures in 2016 as part of the Company’s store rationalization program, while comparable sales for the fourth quarter increased 3.6 percent primarily due to increases in both average transactions per store and units per transaction. K&G comparable sales for the fourth quarter decreased 5.2 percent, and Moores comparable sales for the fourth quarter decreased 5.4 percent.

“Fiscal 2016 was a year of significant strategic progress for Tailored Brands as we executed on our plans to right-size our store base, optimize our cost structure, and return Jos. A. Bank to a path of sustained profitable growth,” said Doug Ewert, the company’s CEO and president. “I am pleased with our delivery on our operational initiatives that we established for 2016.  We closed 233 stores under our store rationalization program, we achieved over $60 million in cost savings through our profit improvement plan, and we stabilized and began to turn around Jos. A. Bank.  With a focus on continued operational excellence, we have built a strong foundation for future growth. Unfortunately, the challenging retail environment resulted in soft traffic across our retail brands, which drove lower than anticipated fourth quarter and full year net sales and gross margins.”

For fiscal 2017, the company expects to achieve diluted earnings per share in the range of $1.45 to $1.75, and expects further comparable sales declines in some of the company’s divisions. Added Ewert: “In addition, our 2017 outlook includes an estimated operating loss of between $19 million and $20 million from the Macy’s tuxedo business.  During 2016, our Macy’s tuxedo business did not ramp as expected.  We are actively engaged in discussions with Macy’s to restructure our agreement. We remain focused on delivering long-term value to our shareholders with disciplined capital management and prudent investment in our organic growth strategies.”