Men's Wearhouse shares tanked more than 40 percent Friday, hours after the specialty men's store pre-announced dismal third-quarter results from its Jos. A. Bank brand.
The company on Thursday said that comparable sales at its Jos A. Bank label, which it acquired for $1.8 billion last year, fell 14.6 percent during the quarter. The decline was driven by a drop in traffic as it started to move away from its ubiquitous Buy One, Get Three free promotions.
What's more, the company said same-store sales at the label are expected to decline 20 percent to 25 percent in the fourth quarter due to slower traffic and fewer items being bought in each transaction.
"While we expected top-line volatility, as we previously stated, we did not anticipate that the impact from the traffic decline would occur to this degree, primarily because the prior year comparisons got progressively easier as the quarter progressed," CEO Doug Ewert said.
"We also believed the timing of the final Buy-One-Get-Three Free event in October would do more to offset earlier traffic declines than it did."