Men's Wearhouse, Inc. (MW) said Wednesday after the markets closed that its first quarter profit fell 37% from last year, hurt mainly by higher interest expenses and loss on extinguishment of debt even as sales rose 40.4%.
However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly sales.
Doug Ewert, Men's Wearhouse chief executive officer, said, "We are very pleased to report another strong quarter with all brands performing well. Comparable sales increased 6.8% at Men's Wearhouse, 0.8% at Moores and 7.3% at K&G and decreased 1.5% at Jos. A. Bank. 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.
Separately, Men's Wearhouse said it has signed a 10-year agreement with Macy's, Inc. (M) to operate men's tuxedo rental shops inside 300 Macy's stores. No other terms were disclosed.
Men's Wearhouse shares are currently gaining 5.84% in after hours trading after closing the day's regular trading session at $58.53, up 6 cents. The shares trade in a 52-week range of $39.77 to $60.67.
Men's Wearhouse is a specialty retailer of men's apparel with 1,758 stores operating under The Men's Wearhouse, Jos. A. Bank, Moores and K&G brands. Men's Wearhouse closed its $1.8 billion acquisition of Jos. A. Bank Clothiers in June last year, ending a prolonged takeover tussle between the two companies.
Net sales at the company's largest brand, Men's Wearhouse, which represented 52% of total first quarter sales, were up 8.4% from a year earlier and comparable sales increased 6.8%.
Moores, the company's Canadian retail brand, was 5% of the total first quarter sales and had a comparable sales increase of 0.8%. K&G was 11% of the company's total first quarter sales with a comparable sales increase of 7.3%.
Jos. A. Bank represented 24% of the company's total first quarter sales, but its comparable sales for the quarter fell 1.5%.
For the first quarter ended May 2, 2015, the company reported net income of $10.4 million or $0.21 per share, compared to $16.5 million or $0.34 per share for the year-ago quarter.
Excluding items, adjusted net income for the latest quarter was $26.0 million or $0.54 per share.
On average, 6 analysts polled by Thomson Reuters expected the company to earn $0.52 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales for the first quarter rose 40.4% to $885.09 million from $630.47 million in the same quarter last year. Six analysts had a consensus revenue estimate of $857.67 million for the first quarter.
CEO Ewert said, "We continue to be confident in our 2015 and 2017 EPS guidance." The company said in March that it expected adjusted earnings of $2.70 to $2.90 per share for the fiscal year 2015 and $5.75 to $6.25 per share for fiscal 2017.
Analysts currently expect the company to earn $2.87 per share for the fiscal year 2015.
The company said it continue to expect Jos. A. Bank comparable sales to be down in the second quarter with improvement in the back half of the year and gross margin increases to follow a similar pattern.
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