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Men's Wearhouse Tops Q1 Expectations, Shares Jump

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Shares of Men's Wearhouse Inc (NYSE: MW) jumped over 8 percent in after-hours trading after the company reported stronger-than-expected results for the first quarter on Wednesday.

The Houston, Texas-based company posted quarterly profit of $10.4 million, or $0.21 per share, versus a year-ago profit of $16.5 million, or $0.34 per share. Excluding items, Men's Wearhouse earned $0.54 per share.

Its sales climbed 40.4 percent year-over-year to $885.1 million from $630.5 million. However, analysts were expecting earnings of $0.52 per share on revenue of $857.67 million.

Jos. A. Bank comparable sales slipped 1.5 percent for the quarter, while Men's Wearhouse comparable sales surged 6.8 percent. K&G comparable sales rose 7.3 percent, while Moores comparable sales gained 0.8 percent in the same quarter.

Retail segment net sales surged 43.7 percent or $250.6 million, while corporate apparel sales rose 7.0 percent or $4.0 million.

Total gross margin, as a percent of sales, shrank 184 basis points to 43.1 percent of net sales.

Advertising expense rose $21.9 million to $50.7 million in the first quarter, while selling, general and administrative expenses surged $48.3 million to $275.6 million.

At the end of the first quarter 2015, inventories rose to $986.5 million, compared to $645.8 million at the end of year-ago quarter.

Doug Ewert, Men's Wearhouse chief executive officer, said, "We are very pleased to report another strong quarter with all brands performing well…Traffic increased year over year at all of our U.S. brands and while Moores' traffic decreased, their average ticket increased. While the retail business has continued to perform well, the tuxedo business slowed this quarter with a decrease in comps of 1.2% at Men's Wearhouse. Based on recent studies, the overall wedding industry is experiencing a slow-down but we believe that our market share is holding and possibly increasing."

Men's Wearhouse also signed a 10-year deal with Macy's, Inc. (NYSE: M) to operate 300 men's tuxedo rental shops inside Macy's stores.

Men's Wearhouse shares surged 8.49 percent to $63.50 in the after-hours trading session.

Posted-In: profitEarnings News


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