Men's Wearhouse, Inc. (MW: Quote) said Wednesday after the markets closed that its first quarter profit declined 1.8% from last year, as higher selling, general and administrative expenses offset an 1.1% increase in sales.
The company's quarterly earnings per share, excluding items, also came in below analysts' expectations as did its quarterly sales.
At the same time, the Houston, Texas-based men's apparel retailer gave a down-beat outlook for the second quarter, but reaffirmed its full year forecast.
Men's Wearhouse shares are currently losing 17.91% in after hours trading after closing the day's regular trading session at $35.57, up 65 cents or 1.86%. The shares trade in a 52-week range of $24.50 to $40.97.
The company reported net income for the first quarter of $26.9 million or $0.52 per share, compared to $27.4 million or $0.52 per share for the year-ago quarter.
Excluding $0.4 million after tax or $0.01 per share in acquisition related integration costs, adjusted earnings for the latest quarter were $0.53 per share.
On average, 8 analysts polled by Thomson Reuters expected the company to earn $0.55 per share for the first quarter. Analysts' estimates typically exclude special items.
Total net sales for the first quarter grew 1.1% to $586.57 million from $580.38 million in the same quarter last year. Six analysts had a consensus revenue estimate of $593.90 million for the first quarter.
Total gross margin for the quarter improved to 43.31% from 42.49% a year earlier. Retail gross margin increased to 44.87% from 44.18% last year, mainly due to higher product margins driven by higher average net selling prices in the U.S. and Canada.
Selling, general and administrative expenses for the quarter rose 5% to $213.1 million, and as a result operating margin for the quarter narrowed to 6.98% from 7.52% last year.
Clothing product retail sales for the quarter increased 2.5% year-over-year to $420.5 million, while Tuxedo rental sales rose 7.4% to $78.5 million.
Brand wise, first quarter sales at the company's namesake stores increased 4.7% to $371.5 million due to an increase in average unit selling prices that more than offset fewer units sold per transaction and average number of transactions per store.
First quarter sales at off-price retail chain K&G Superstores fell 3.4% to $103.1 million due to lower average unit selling prices that offset increases in both units sold per transaction and average number of transactions per store.
Sales from Canadian store chain Moores, Clothing for Men rose 4.3% to $55.5 million due to an increase in both average unit selling prices and units sold per transaction that more than offset a decrease in the average number of transactions per store.
For the first quarter, same-store sales increased 3.8% at Men's Wearhouse and 7.1% at Moores Canada., but fell 4% at K&G Superstores.
Corporate apparel segment sales for the first quarter fell 16.4% to $49.9 million, mainly due to later launch dates for customer new uniform programs in fiscal 2012 as compared to fiscal 2011.
At the end of the first quarter, the company operated 1,162 stores under the Men's Wearhouse, Moores, K&G and Men's Wearhouse and Tux brands, compared to 1,187 stores a year ago.
During the first quarter, the company repurchased 0.9 million shares for a total of $33.9 million and ended the quarter with cash and cash equivalents of $118.7 million.
Looking forward to the second quarter, the company forecasts earnings of $1.12 to $1.13 per share and total sales growth of 0.75% to 1.25%. Analysts currently expect the company to earn $1.22 per share on sales growth of 3.2%.
The company reaffirmed its fiscal full year 2012 guidance, which calls for earnings of $2.70 to $2.78 per share and total sales growth of 4% to 5%. Analysts currently expect the company to earn $2.80 per share on sales growth of 4.3% for the fiscal year 2012.
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by RTT Staff Writer
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