Men's Wearhouse cuts outlook; shares skid
The Men's Wearhouse said Wednesday that its net income fell 28 percent during the fiscal second quarter, hurt by one-time charges and an early Easter that pushed prom tuxedos rentals earlier than usual.
The men's clothing retailer also cut its full year guidance, sending its shares down 14 percent in after-hours trading.
Net income fell to $42.9 million, or 85 cents per share, in the three months ending July 28, from $59.4 million, or $1.15 per share, in the same period a year ago.
It reported adjusted earnings of $1.01 per share in the second quarter. Analysts, on average, expected earnings of $1.14 per share, according to FactSet.
The company, which runs its namesake chain of men's clothing stores, as well as the Moores and K&G retail chains, said that the earlier Easter pushed prom tuxedo rentals to the first quarter, hurting second-quarter earnings by about 10 cents per share. Payroll related costs and other charges hurt earnings by 16 cents per share.
Revenue fell 2.3 percent to $647.3 million from $662.3. That's below the $670.8 million analysts expected, according to FactSet.
The company now expects full-year earnings between $2.40 per share and $2.50 per share. That's down from its previous forecast of $2.70 per share to $2.80 per share.
The company said in a statement that it is "concerned" about the trends in the apparel industry. Many retailers, ranging from Wal-Mart Stores to Macy's, have cut their outlooks recently on worries that consumers are cutting their spending.
Sales at stores open at least year fell 2.1 percent at the Men's Wearhouse during the second quarter, 5.5 percent at Moores and 5.1 percent at K&G. That is a key indicator of financial performance because it excludes recently opened and closed stores.
This quarterly release is the first without company founder George Zimmer in a leadership role. Over the summer, he was ousted as Men's Wearhouse's executive chairman due to rising tensions with the board over his role within the company.
For many consumers, Zimmer was the public face of the company. He appeared prominently in TV ads, promising customers that "you'll like the way you look."