Men's Wearhouse down, Jos. A. Bank drops 16% in Tailored Brands Q1

By

Obi Anyanwu

Published
Jun 9, 2016

Tailored Brands, Inc. on Wednesday reported its consolidated financial results for the first quarter of fiscal 2016 ended April 30, 2016.

 
Total net sales decreased 6.4% to $828.8 million with retail segment net sales decreasing 7% and corporate apparel sales increasing 2.9%.
 
Net sales for Men’s Wearhouse were down 3.2% and comparable sales were down 3.5% primarily due to a decrease in average transactions per store and units per transaction. Jos. A. Bank comparable sales decreased 16%, which was slightly better than expectations, K&G comparable sales increased 0.2% and Moores comparable sales decreased 3.9%.

Doug Ewert, Tailored Brands president and chief executive officer stated, "Our first quarter results were mixed as we navigated the difficult consumer and retail environment and cycled a strong performance in last year's first quarter. While our net sales decline of 6.4% was slightly below our expectation, our focus on lowering operating expenses brought operating income and earnings per share in-line with our plan for the quarter.”
 
Total gross margin decreased 7.8% to $351.8 million and net earnings for the quarter were $1.6 million compared to net earnings of $10.4 million last year. Diluted EPS was $0.03 compared to $0.21 in the prior year.
 
"Importantly, we are making progress on our transition plan for Tailored Brands,” said Ewert. “We are executing on our profit improvement program, organizational realignment, store base rationalization, and cost reductions. We remain committed to stabilizing, resizing, and rebuilding the foundation of the Jos. A. Bank business to a base from which we can profitably grow on a go-forward basis.”
 
Tailored Brands announced in May that Jos. A. Bank will no longer sell Joseph Abboud products despite its solid sales. The company aims to keep the Joseph Abboud brand as a private label, and it will continue to be sold at Men’s Wearhouse and online.

Since acquiring Jos. A. Bank in 2014, Tailored Brands numbers have been impacted by the brand's performance. In the fourth quarter of 2015, Jos. A. Bank comparable sales decreased by 31.9%. In March, the company announced plans to close 250 Jos. A. Bank stores during fiscal year 2016. 
 
Ewert concluded, "Lastly, I am pleased that business seems to be improving in the second quarter, as evidenced by our May comps. In May, Men's Wearhouse posted a comparable sales increase in the mid-single-digit range and Jos. A. Bank and Moores also saw improving trends. Accordingly, we continue to expect our 2016 annual adjusted EPS to be in the range of $1.55 to $1.85.”