Men's Wearhouse 2Q profit beats expectations
HOUSTON (AP) — The Men's Wearhouse Inc.'s shares jumped in after-hours trading Wednesday after the retailer reported improved second-quarter performance on solid sales, improved margins and a lower-than-expected tax rate.
The company, based in Houston, is one of the largest specialty retailers in North America.
Men's Wearhouse said it earned $59.4 million, or $1.15 per share, for the quarter that ended July 28. That's up from $57.1 million, or $1.09 per share, in the same quarter last year. It earned $1.11 per share in the prior year after adjusting for acquisition costs and impairment charges.
The retailer's total revenue increased 1 percent to $662.3 million.
Analysts polled by FactSet were expecting the company to earn $1.12 per share on revenue of $662.9 million.
The company said its net income per share topped forecasts mainly due to higher-than-planned retail segment gross margin and a slightly lower-than-expected tax rate.
CEO Dough Ewert said sales trends were better than expected as shoppers bought more men's clothing both at full and sale prices. Additionally, its tuxedo rental revenue improved on higher prices, more rentals and increased sales of tuxedo accessories.
Men's Wearhouse said its revenue from stores open at least a year improved 4.4 percent for the quarter at its namesake stores. That is considered a key indicator of financial performance as it strips away the impact of recently closed or opened sites. This measure fell 3.3 percent at its K&G stores and increased 2.5 percent at its Moores chain of stores.
The company said it expects to earn $2.74 to $2.80 per share for its 2012 fiscal year, with a slight boost from an extra week. Analysts were expecting the company to earn $3.05 per share for the year.
It also forecast earnings per share of 95 to 98 cents per share for its third quarter and 12 to 15 cents per share for its fourth. Analysts had forecast earnings of 97 cents per share and 9 cents per share respectively.
Shares of the company jumped more than 8 percent to $34.51 in after-hours trading. Its stock closed the day's regular trading up 32 cents at $31.84.