Men's Wearhouse Misses, Guides Low - Analyst Blog
06 Dicembre 2012 - 9:50AM
Zacks
The Men's
Wearhouse Inc. (MW) – one of the largest specialty
retailers of menswear in the United States and Canada – recently
reported its fiscal third-quarter 2012 (ended October 27, 2012)
earnings of 95 cents a share that came below the Zacks Consensus
Estimate of 97 cents. However, earnings soared 20.3% from 79 cents
reported in the comparable prior-year quarter. Moreover, including
one-time items, earnings surged 23.4% year over year.
Total net sales increased 7.9% year
over year to $631 million and came in line with the Zacks Revenue
Estimate. Retail Segment’s total revenue (representing
89.4% of total sales) increased 7.7% year over year to $564
million, reflecting a 6.5% increase in Retail Clothing Product to
$401.7 million, coupled with 11.3% increase in Tuxedo Rental
Services to $124.6 million. Alteration and other services
division’s sales increased 9.3% to $37.7 million.
Corporate Apparel
Segment’s (representing 10.6% of total sales) revenue improved
10.1% to $66.9 million compared with $60.8 million in the year-ago
quarter.
Gross profit increased 8.4% to
$290.7 million from $268.2 million, while gross profit margin
expanded 20 basis points year over year to 46.1%, reflecting a
decrease in cost of sales as a percentage of total revenue.
Operating income augmented 20.8% to
$72.5 million, while operating margin expanded 122 basis points to
11.5% on the back of lower SG&A expenses as a percentage of
sales.
Other Financial
Aspects
As of October 27, 2012, Men’s
Wearhouse has a debt-free balance sheet with cash and cash
equivalents of $138 million and shareholders’ equity of $1,119.6
million. Capital expenditure, during the first nine months of
fiscal 2012, stood at $90.1 million.
Guidance
Lowered
Following the negative comparable
store sales results in November 2012 and lingering macro concerns,
Men’s Wearhouse lowered its fiscal 2012 and fourth-quarter earnings
guidance. The company now expects GAAP earnings per share in the
range of $2.57–$2.63 for fiscal 2012, down from its earlier
guidance range of $2.74–$2.80.
For the fourth quarter 2012, the
company expects GAAP earnings to range within loss of 5 cents to
one cent earnings, significantly down from its earlier guidance of
12–15 cents earnings.
At the end of the quarter, the
company had 1,144 stores with 7,062.6 sq ft area compared with
1,175 stores with 7,020.6 sq ft area in the prior-year quarter.
Currently, Men's Wearhouse – a peer
of Jos. A Bank Clothiers Inc. (JOSB) – retains a
Zacks #2 Rank, which translates into a short-term Buy rating.
JOS A BANK CLTH (JOSB): Free Stock Analysis Report
MENS WEARHOUSE (MW): Free Stock Analysis Report
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