NEW YORK – Men’s Wearhouse Inc. blew past analysts’ earnings expectation in the second quarter.
During the three months ended July 29, the Houston-based menswear giant posted net income of $35.6 million, or 65 cents a diluted share, up 46.1% from the $24.4 million, or 43 cents, tallied in the prior-year period. The analyst consensus estimate for the most recent quarter was 58 cents.
Net sales advanced 8.7% to $460.6 million from $423.6 million in last year’s period. Same-store sales ticked up 3.7% in the US and 7.3% in Canada.
Driven by lower product costs and the growth of the tuxedo rental business, gross margin increased 350 basis points to 42.2% of sales.
Looking ahead, the company said it expects a same-store sales increase of between 2% and 4% in the US during the current third quarter and 4% to 6% increase in Canadian comps. Earnings per diluted share are expected to fall between 51 and 56 cents.
For the six months, net income gained 36.9% to $64.5 million, or $1.18 a diluted share, from $47.1 million, or 84 cents, in the 2005 period. Sales advanced 7.2% to $895.2 million from $835.2 million.
Figures for the six months include after-tax losses of $2.9 million, or 5 cents per diluted share, from the discontinued Eddie Rodriguez stores.
At the end of the second quarter, Men’s Wearhouse operated a total of 735 stores, including 534 Men’s Wearhouse units, 116 Moores, Clothing for Men stores in Canada, and 85 K&G outlets. Sixty-three of the K&G stores carried women’s apparel at quarter’s end, up from 49 a year earlier.