Focus Points For Tailored Brands Q4 Report

With Tailored Brands Inc TLRD scheduled to report its fiscal-year 2017's fourth-quarter results after the close on March 8, Wunderlich’s Eric Beder noted, “While not an important bottom-line quarter for the company, investors will be focused on the return to positive comps at the Jos. A. Bank Clothiers Inc JOSB) chain, which is anniversarying the shift away from material discounting.”

The analyst maintained a Buy rating on Tailored Brands, with a price target of $30.

Focus Areas

Beder believes that Jos. A. Bank has the potential to generate the highest margins among all of Tailored Brands’ chains.

The analyst also expects management to continue its focus on reducing debt, while leveraging meaningful synergies that are likely to come up in FY 2018 from streamlining and store closures.

Related Link: 2017 Will Be Another Transition Year For Retail

“As such, we remain positive on TLRD and view the name as a key upside play for FY18,” Beder stated.

For Q4 FY 2017, consensus expectations are for loss of $0.12 per share, which is close to the higher end of the company’s implied guidance. The analyst believes that this forecast is achievable, although it is not highly relevant.

“The company's fourth quarter is, by far, the least important quarter in terms of its earnings,” Beder explained.

Looking Ahead

In addition, the analyst believes that Tailored Brands’ suiting business, driven by suit separates and sport coats, has performed significantly better than the overall apparel sector, which “should bode well” for the company.

In addition, Beder believes “the rollout of custom suiting, shirts and accessories has continued to grow in importance, driving further margin gains and materially positive working capital impacts.”

In fact, the analyst expects Tailored Brands’ cost cutting and debt paydowns to position the company well for upside in FY 2018.