Tuesday, specialty retailer The Men's Wearhouse, Inc. (MW) reported a 35% increase in third-quarter profit, helped by lower expenses due to cost cutting. However, the company revealed that it expects a fourth-quarter loss, contrary to analysts' median estimate for a one-cent profit, triggering its stock to slide over 16% in after-hours trading.
The Houston, Texas-based company's third-quarter net income increased to $19.69 million or $0.37 per share from $14.59 million or $0.28 per share a year ago.
On average, seven analysts polled by Thomson Reuters estimated earnings of $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the third quarter increased 0.51% to $462.02 million from $459.67 million for the third quarter of 2008. Analysts expected revenues of $454.54 million for the quarter.
Segment wise, revenue from clothing products decreased 0.16% to $333.88 million due to decreases in the comparable store sales, primarily driven by a reduction in store traffic levels. Tuxedo rental sales increased 1.25% to $97.70 million. Revenue from alteration and other services rose 5.8% to $30.43 million.
Brand wise, sales of Men's Wearhouse increased 0.6% to $317.6 million while sales of off-price retail chain K&G Superstores declined 1.4% to $79.3 million. Revenue from Canadian store chain Moores Clothing for Men climbed 5% to $56.0 million.
Gross margin for the quarter declined to 43.87% from 44.10% in the year-earlier quarter.
Operating income increased 26.55% to $30.08 million from $23.77 million in the comparable quarter of 2008, aided by a 3.6% decline in selling, general, and administrative expenses.
Selling, general, and administrative expenses declined to $172.56 million from $178.96 million last year. The decrease was due to cost-cutting measures and operational efficiencies, the company noted..
For the nine-month period, the company's net income increased to $64.43 million or $1.22 per share from $57.36 million or $1.10 per share in the similar period of 2008. Revenue for the period decreased 2.92% to $1.45 billion from $1.50 billion in the year-earlier period.
Looking forward to the fourth quarter, the company now expects a GAAP loss in the range of $0.15 to $0.19 per share. Total sales are expected to decline in low single digit range for the fourth quarter, including a low single digit decrease in tuxedo rental revenues. On a consensus, analysts currently estimate earnings of $0.01 per share on revenues of $472.22 million for the fourth quarter.
Brand wise, the company anticipates comparable store sales to decrease in the low single digit range at the Men's Wearhouse. Comparable store sales at Moores is expected to be flat to a low single digit increase. The K&G comparable store sales are anticipated to be flat to a low single digit decrease.
The company operated a total of 1,274 stores as of October 31, 2009, compared to 1,298 stores on November 1, 2008.
For the sequentially preceding second quarter, the company posted a 20.3% higher profit on lower expenses as a result of cost-cutting measures and operational efficiencies, even though revenues dropped over 3%. Net earnings increased to $39.5 million from $32.8 million in the prior-year quarter. Earnings per share rose to $0.75 from $0.63 in the previous year quarter. Net sales for the quarter declined 3.5% to $526.21 million from $545.29 million.
Among the peers, Buckle Inc.'s (BKE) posted a 15% higher earnings for the third quarter on higher sales and margins. Buckle's third-quarter net income was $33.3 million or $0.71 per share, compared to $29.1 million or $0.62 per share a year earlier.
Yet another competitor JoS. A. Bank Clothiers Inc. (JOSB) reported higher third-quarter profit as net sales grew more than 8% year over year. Net income for the quarter increased 26% to $11.73 million or $0.63 per share from $9.30 million or $0.50 per share in the year-ago quarter. Net sales increased 8.1% to $161.31 million from $149.27 million in the third quarter of fiscal year 2008.
MW closed Tuesday's regular trading at $21.84, down $0.34 or 1.53%, on a volume of 1.81 million shares on the New York Stock Exchange. In after hours, the stock is losing $3.55 or 16.25%, and is trading at $18.25.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.