UPDATE: Men's Wearhouse (MW) Misses Q3 EPS by 4c, Revenue Falls Short

(Updated - December 10, 2014 5:36 PM EST)

Men's Wearhouse (NYSE: MW) reported Q3 EPS of $0.83, $0.04 worse than the analyst estimate of $0.87. Revenue for the quarter came in at $890.6 million versus the consensus estimate of $912.4 million. Men's Wearhouse, Moores and K&G, posted comparable sales increases of 2.2%, 8.8% and 4.4%, respectively. Jos. A Bank comps declined 8.1%.

Doug Ewert, Men's Wearhouse chief executive officer, commented, "We continue to be pleased with the progress we are making on the Jos. A. Bank integration. In addition, we are pleased with the overwhelmingly positive reaction of the Jos. A. Bank employees to our culture and are very optimistic about our opportunities to expand consolidated sales and margins as we complete the integration. We remain confident in our 2017 guidance and our cost synergy run-rate at the end of the third quarter is well ahead of our original $15 million projection for the end of the 2014 fiscal year and our systems conversions are on target.

"During the quarter, Jos. A. Bank's comparable sales were slightly below our internal expectations but, as part of our operating strategy for the brand, we are very encouraged by the positive increase of 123 basis points in the maintained product margin rate," added Ewert. "We also completed our review of Jos. A. Bank's inventory and concluded we will dispose of approximately $50 million of product which will be recorded as a reduction in the inventory value at the date of acquisition; a purchase price accounting adjustment. This product will be pulled from the stores as part of our regular physical inventory process in January. Additionally, we wrote off approximately $10 million of slower renting tuxedo inventory to make room for more productive inventory in anticipation of the tuxedo rollout. As a reminder, we will begin renting tuxedos from our existing rental inventory in Jos. A. Bank beginning in January 2015. The in-store training has begun and we are excited about this revenue synergy opportunity.

"Excluding Jos. A. Bank results, the third quarter adjusted operating income increased low double digits driven by strong performances at Men's Wearhouse, Moores and K&G, posting comparable sales increases of 2.2%, 8.8% and 4.4%, respectively. We are also excited about our recent announcements of in-home wedding consultations beginning early next year, the premiere of the Joseph Abboud website and the future Joseph Abboud flagship store in New York City.

"We have completed our strategic review of K&G. As part of the review, we considered offers to acquire the business, none of which were acceptable. We concluded that continuing to operate K&G as a part of the Company's overall portfolio will provide the most value to our shareholders. We would like to thank K&G's management and employees for continuing to work diligently, which has led to the strong results that have been posted this year," concluded Ewert.

For earnings history and earnings-related data on Men's Wearhouse (MW) click here.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• O'Reilly Automotive (ORLY) Misses Q1 EPS by 7c, Offers Guidance
• Meritage Homes Corporation (MTH) Tops Q1 EPS by 151c; offers guidance
• Plexus Corp (PLXS) Tops Q2 EPS by 7c