Men’s Wearhouse Misses On Q3 Earnings & Revenues

The Men’s Wearhouse, Inc. (MW – Snapshot Report) posted its third-quarter fiscal 2014 results, wherein its adjusted earnings of 83 cents a share dropped 7.8% year over year due to higher operating expenses. Earnings also fell short of the Zacks Consensus Estimate of 87 cents.

 

The Men’s Wearhouse, Inc – Earnings Surprise | FindTheBest

Moreover, including one-time items, GAAP earnings for the reported quarter came in at 14 cents per share, down 82.3% from last year due to acquisition and integration expenses related to Jos. A. Bank.

Total net sales during the quarter advanced 37.3% year over year to $890.6 million. However, sales came below the Zacks Consensus Estimate of $909 million. The year-over-year rise was primarily driven by solid improvement witnessed in Retail segment sales, partly offset by a dip in sales at the Corporate Apparel segment.

Segment Performance

The Retail segment total revenue increased 42.3% year over year to $819.2 million, largely driven by the contribution of Jos. A. Bank, whose acquisition by Men’s Wearhouse closed in June this year. Also, the Retail segment’s sales were augmented by rising comparable store sales (comps) at all other retail brands of the company.

The Corporate Apparel segment revenues slipped 2.6% to $71.5 million.

Adjusted gross profit soared 32.9% to $390 million, while gross profit margin contracted 145 basis points (bps) year over year to 43.8%, attributable to weak retail margin on account of the initial Jos. A. Bank integration.

Further, adjusted selling, general and administrative (SG&A) expenses increased 28.9% to $262.2 million, owing to rising advertisement costs and acquisition expenses.

The increased gross profit led adjusted operating income to surge nearly 27% year over year to $85.7 million. However, adjusted operating profit margin contracted 80 bps over the same time frame.

Excluding Jos. A. Bank results, the company’s adjusted operating income showed low double-digit growth on the back of solid results delivered by Men’s Wearhouse, Moores and K&G brands, all of which posted positive comps.

Other Financial Aspects

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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