Men's Wearhouse Inc. reported strong sales in the fiscal first
quarter even as its Jos. A. Bank chain continued to struggle.
Sales at Jos. A. Bank stores open for at least a year, including
online sales, declined 1.5% in the latest period, compared with a
8.4% increase for the year-ago period. The decline was offset by
increases of 6.8% at the namesake Men's Wearhouse stores, 0.8% at
Moores and 7.3% at K&G stores, the company said.
Shares, up nearly 7% over the past 12 months, rose 6.4% to
$62.25 in late trading, topping the 52-week-high of $60.67 set on
June 2 during regular trading.
Sales at Jos. A. Bank— which Men's Wearhouse bought last year
for $1.8 billion, ending a drawn-out takeover battle between the
suit makers—have been hurt by outdated and slow-moving inventory,
the retailer has said.
Inventories increased $340.7 million to $986.5 million at the
end of the quarter, largely due to Jos. A. Bank, the Houston-based
company said.
Men's Wearhouse projects Jos. A Bank sales and gross margin to
rebound in 2016, when the company expects to accelerate its debt
payments.
Men's Wearhouse traces its roots to 1973, when founder and
longtime top executive George Zimmer opened the first store in
Houston with some college roommates. As of May 2, the company had
1,758 stores, up from 1,128 a year earlier.
Mr. Zimmer, who defined the company's image with his signature
line on television commercials—"You're going to like the way you
look. I guarantee it"—was ousted in 2013. This month, he launched
ZTailors, a company that sends tailors to homes or offices.
Overall, Men's Wearhouse reported a profit of $10.4 million, or
21 cents a share, down from $16.5 million, or 34 cents a share, a
year earlier. Excluding acquisition- and integration-related
charges and other items, the profit was 54 cents a share.
Net sales were $885.1 million.
Analysts surveyed by Thomson Reuters projected profit of 52
cents a share on $857.7 million in net sales.
Men's Wearhouse, which on Wednesday reported a slowdown in its
tuxedo business, said it had signed a 10-year agreement with Macy's
Inc. to operate tuxedo rental shops inside 300 Macy's stores. No
other terms were disclosed.
It affirmed its projections for 2015 and 2017.
Write to Maria Armental at maria.armental@wsj.com
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