JOS. A. BANK SHINES BRIGHT IN ANOTHER TOUGH QUARTER FOR TAILORED BRANDS
Menswear retailer Tailored Brands, which owns such brands as Men’s Wearhouse and Jos A. Bank, has reported yet another tough quarter going into the holiday season.
For the third quarter of 2017, total net sales decreased 4.3 percent to $810.8 million. Retail net sales decreased 2.1 percent primarily due to the impact of last year’s store closures, with retail segment comparable sales up 0.1 percent. Corporate apparel net sales decreased 24 percent, in line with expectations, primarily due to “anniversarying” last year’s rollout of a large new uniform program.
Comparable sales at Men’s Wearhouse decreased 1 percent. Comparable sales for clothing increased slightly primarily due to an increase in transactions and units per transaction partially offset by a decrease in average unit retail. Comparable rental services revenue decreased 4.3 percent, primarily reflecting a consumer shift to purchasing suits for special occasions.
Jos. A. Bank comparable sales increased 4.9 percent primarily due to an increase in transactions and average unit retail that more than offset a decrease in units per transaction. K&G comparable sales decreased 0.6 percent primarily due to lower transactions partially offset by increases in average unit retail and units per transaction. Further, Moores comparable sales decreased 2.6 percent primarily due to decreases in both units per transaction and transactions that more than offset an increase in average unit retail.
During the third quarter, the company also repurchased and retired $65 million face value of senior notes, resulting in year-to-date repurchases of $115 million. This action was motivated by the company remaining committed to a balanced capital allocation strategy, investing to support its growth initiatives, returning cash to shareholders via its dividend and using excess free cash flow to reduce debt.
“While we still have more work to do, we are pleased with the progress in our business in the third quarter,” said Doug Ewert, CEO of Tailored Brands. “We posted positive comparable sales at Jos. A. Bank and sequential comparable sales improvement at Men’s Wearhouse and K&G, resulting in our second consecutive quarter of positive comparable sales for our retail segment. Based on solid third quarter results and a good start to the fourth quarter, we have increased our EPS outlook for the year.”
“Our new marketing campaigns are building awareness about the solutions we provide to men of all shapes and sizes,” continued Ewert. “We’re bringing new customers into our stores where we win with superior service and selection, including custom suiting at a disruptive price. We are encouraged by the progress we are making on our strategic initiatives to grow our custom business and enhance our online and in-store omnichannel capabilities. These initiatives are part of our strategy to deliver a superior customer experience in order to increase market share and drive long-term sustainable growth.”
Moving into the holidays, the company continues to expect comparable sales for Men’s Wearhouse, Moores, and K&G to be down low-single digits and comparable sales for Jos. A. Bank to increase mid-single digits.
In addition to closing all 170 tuxedo shops at Macy’s, the company continues to expect approximately 20 additional store closures in 2017 resulting from its continuous review of its real estate portfolio for opportunities to optimize its fleet as lease terms expire.
