Earnings Preview for Men's Wearhouse

Men's Wearhouse

is scheduled to report first-quarter fiscal 2011 results after the markets close on Wednesday, June 8. Investors will be watching to see whether the company lives up to its optimistic guidance, which bumped the stock up about 10% in early May. Analysts anticipate that the company will announce earnings of $0.49 per share. The consensus estimate was only $0.29 per share 60 days ago, and per-share earnings came in at $0.26 in the same period of last year. Earnings results have not fallen short of consensus expectations in the past five quarters. The net loss in the fourth quarter was in line with analyst estimates.

During the three months that ended in April, the company approved a succession plan: founder George Zimmer will step down as CEO this month and be replaced by COO Douglas Ewert. The revenue forecast for that period calls for an increase of 21.9% from the same quarter of last year to $577.3 million. And sequential and year-over-year growth of revenues is projected for the current quarter as well.

Houston, Texas-based Men's Wearhouse is primarily a retailer of men's suits in the United States and Canada. The company operates more than 1,200 retail stores under the Men's Wearhouse, K&G and Moores banners. It also operates a retail dry cleaning and laundry business. Chairman and CEO George Zimmer founded the firm in 1973.

Men's Wearhouse has a dividend yield of 0.6%. The 21.4 price-to-earnings ratio and the 1.8 price/earnings-to-growth ratio suggest overvaluation, and the long-term earnings per share growth forecast is only 8.3%. Yet analysts on average recommend buying the stock and have for more than 90 days. The share price recently reached a multi-year high of $34.78 but has pulled back about 8% in recent days. Year to date, the stock is up about 26% and has outperformed the broader markets. Men's Wearhouse has also outperformed competitor Jos. A. Bank Clothiers

, as well as the industry average, over the past year.