Men's Wearhouse, Inc. (MW) said Wednesday after the markets closed that it swung to a fourth quarter loss, hurt by lower sales and an asset impairment charge. However, the company's adjusted loss per share was better than what analysts predicted.
The Houston, Texas-based men's apparel retailer reported a GAAP net loss for the fourth quarter of $18.9 million or $0.36 per share, compared to GAAP net income of $1.5 million or $0.03 per share for the year-ago quarter.
The latest quarter results include a $0.25 per share non-cash asset impairment charge related to 157 stores, while the year-ago quarter results included a $0.11 per share gain from an asset sale and a $0.02 per share non-cash asset impairment charge.
Excluding items, adjusted net loss for the fourth quarter was $0.11 per share, compared to an adjusted net loss of $0.06 per share in the prior year quarter.
On average, 7 analysts polled by Thomson Reuters expected the company to report a loss of $0.16 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Fourth quarter gross margin before occupancy costs decreased to 52.7% from 53.7% a year ago. Clothing product margins decreased 127 basis points mainly due to increased promotional activities.
Total net sales for the fourth quarter fell 4% to $457.22 million from $476.36 million in the same quarter last year. Five analysts had a consensus revenue estimate of $465.94 million for the fourth quarter.
Clothing product sales for the quarter fell 4.1% year-over-year to $390.1 million due to decreases in the company's same-store sales mainly driven by a reduction in store traffic levels and a lower domestic average ticket. Tuxedo rental sales declined 1.2% to $35.4 million.
Brand wise, fourth quarter sales of Men's Wearhouse dropped 6.8% to $294.3 million, while sales of off-price retail chain K&G Superstores declined 6% to $92.7 million. Revenue from Canadian store chain Moores Clothing for Men rose 19.1% to $61.7 million.
At the end of the fourth quarter, the company operated 1,259 stores under the Men's Wearhouse, Moores and K&G brands, compared to 1,294 stores a year ago.
For the fiscal year 2009, the company reported GAAP net income of $45.5 million or $0.86 per share, compared to $58.8 million or $1.13 per share for the fiscal year 2008. Adjusted earnings for the fiscal year 2009 were $1.11 per share.
Total net sales for the fiscal year 2009 fell 3.2% to $1.91 billion from $1.97 billion in fiscal 2008.
Analysts expected the company to earn $1.02 per share on revenue of $1.92 billion for the fiscal year 2009.
Looking forward, the company said it expects first quarter GAAP earnings to be in the range of $0.12 to $0.16 per share.
Analysts currently expect the company to earn $0.09 per share for the first quarter.
Men's Wearhouse shares, which have traded in a range of $10.39 to $27.67 over the past year, closed Wednesday's regular trading session at $24.83, up 8 cents. The stock is currently losing $1.36 or 5.48% in after hours trading.
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