Tailored Brands (TLRD) Tops Q3 EPS by 11c, Revenues Beat, Comp. Sales Down 2.2%; Offers Q4 EPS Guidance Below Consensus

Tailored Brands (NYSE: TLRD) reported Q3 EPS of $0.53, $0.11 better than the analyst estimate of $0.42. Revenue for the quarter came in at $729.5 million versus the consensus estimate of $715.45 million.

• Q3 2019 GAAP diluted EPS and adjusted diluted EPS(1) from continuing operations of $0.56 and $0.53, respectively
• Company expects FY 2019 adjusted diluted EPS(1) from continuing operations of $0.97 to $1.02
• Total net sales decreased 3.0% to $729.5 million primarily due to a decrease in comparable sales of 2.2%.
• Company repurchased $55 million face value of senior notes
• Company repurchased $10 million of common shares
• Company appoints Carrie Ask, brand president Men’s Wearhouse and Moores, to newly created chief customer officer role to oversee Men’s Wearhouse, Jos. A. Bank and Moores brands

Tailored Brands President and CEO Dinesh Lathi said, “We are pleased to report third quarter comparable sales and adjusted earnings per share above our expectations. We delivered sequential comparable sales improvement at both Men’s Wearhouse and Jos. A. Bank, with a return to positive comparable sales at Jos. A. Bank. On a sequential basis, both brands generated higher transactions and increased comparable sales across multiple merchandise categories. Our third quarter performance reflects continued progress in each of our transformational strategies, including improved sales in our polished casual categories, higher online sales driven by enhanced e-commerce experiences and online marketing, and new customer acquisition and increased traffic reflecting more effective marketing campaigns and channel strategies.”

Lathi added, “While we still have much more work in front of us, we are encouraged by the improved momentum in the business. To further accelerate our transformation, we have created a new chief customer officer role providing common leadership for our Men’s Wearhouse, Jos. A. Bank and Moores brands, and we have eliminated the brand president positions for these brands. Carrie Ask, currently brand president of Men’s Wearhouse and Moores, has been appointed chief customer officer. We believe the new structure heightens our focus and ability to unlock value across our brand portfolio and will enable us to show up for our customers in more effective and efficient ways.”

Lathi concluded, “After more than a decade of impactful leadership at Tailored Brands, Mary Beth Blake, brand president, Jos. A. Bank, is resigning from the Company. We are immensely grateful for everything Mary Beth has done to enhance our performance and we wish her the best in her future endeavors.”

GUIDANCE:

Tailored Brands sees Q4 2019 EPS of ($0.55)-($0.50), versus the consensus of ($0.36).

The Company’s outlook for the fourth quarter of fiscal 2019 related to continuing operations is as follows:

• Earnings per Share: The Company expects an adjusted diluted loss per share in the range of ($0.50) to ($0.55).
• Comparable Sales: The Company expects comparable sales for:
  • Men’s Wearhouse to be down 1% to up 1%
  • Jos. A. Bank to be down 1% to up 1%
  • K&G to be flat to up 2%
  • Moores to be down 6% to 8%.
• Effective Tax Rate: The Company expects an effective tax rate of 22% to 23%.
• Real Estate: The Company expects net closures of five stores.
• The Company’s outlook excludes expected costs for third party domain experts and other actions associated with its cost savings and operational excellence programs.

For earnings history and earnings-related data on Tailored Brands (TLRD) click here.

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