Low Expectations Were Still Too High For Tailored Brands In A Messy Q4

Shares of Tailored Brands Inc TLRD plunged more than 30 percent after the company reported across the board miss in its fourth quarter as the solid results around the Thanksgiving Holiday didn't occur in the Christmas period and beyond.

“The weakness was endemic, with not a single region or category meeting expectations,” Wunderlich analyst Eric Beder wrote in a note.

Weak Results

Tailored Brands Reports Q4 Adj. EPS $(0.19) vs. $(0.12) Est., Sales $793.3M vs. $811M Est.
Tailored Brands Sees FY17 EPS $1.45-$1.75 vs. $2.10 Est.

There was nothing to rave about in the quarterly results apart from Jos. A. Banks comp of +3.6 percent, which, despite positive, came in below estimates. But, the 3.6 percent comp was the first positive of the company since its shift from its deep-discounting model.

The company's joint venture with Macy's Inc M, which basically shifted Tailored's mall-based tuxedo business from standalone stores to Macy's locations, has been underperforming. Results were also weaker than-expected from Men's Wearhouse, Moore's and K&G.

“While trends have slightly improved into 1Q, management does not see enough visibility to be even mildly aggressive with its projections, which assume continued negative comps for the non-Jos. A. Bank business and limited impact from potential debt repayments,” Beder continued.

Analyst Still Positive

Despite being disappointed with the results, Beder maintained his Buy rating on the stock, saying the guidance is more or less a worst case scenario, which, if sales can improve, should drive upside.

“[W]e believe the risk/ reward still remains positive and the downturn offers value investors a potential turn still,” Beder added.

That said, the analyst cut his price target to $24 from $30.

At last check, shares of Tailored Brands plunged 30.08 percent to $16.34.

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