- Prachi Singh |
Tailored Brands has reported fiscal fourth quarter GAAP loss per share of 21.86 dollars. The fiscal year 2015 GAAP loss per share was 21.26 dollars and adjusted EPS was 1.80 dollars. As reported in the company's preliminary results released on February 16, 2016, fourth quarter comparable sales increased 4.3 percent at Men's Wearhouse with clothing comps of 4.3 percent. Jos. A. Bank comparable sales decreased 31.9 percent, K&G comparable sales increased 1.9 percent and Moores comparable sales decreased 2.7 percent.
Commenting on the results, Doug Ewert, Tailored Brands CEO stated, "While our fourth quarter and full year results were consistent with our revised guidance, we remain very disappointed by the weak Jos. A. Bank results. Our transition away from unsustainable promotions has proven significantly more difficult and expensive than we expected. We do, however, remain confident that Jos. A. Bank offers a longer-term opportunity to profitably grow market share in the menswear business.”
Detailed fourth quarter and FY results
Net sales for the fourth quarter at Men's Wearhouse were up 5.3 percent and comparable sales increased 4.3 percent from last year's fourth quarter. Comparable clothing sales increased 4.3 percent and comparable rental revenue increased 4.9 percent in the fourth quarter. Jos. A. Bank comparable sales for the fourth quarter decreased 31.9 percent, K&G comparable sales increased 1.9 percent. Net sales for Moores, Canadian retail brand, decreased 16.5 percent primarily due to unfavorable currency fluctuations. Moores had a comparable sales decrease of 2.7 percent. The Corporate Apparel segment sales decreased 7.5 percent.
Total net sales decreased 11.1 percent on GAAP basis or 102.7 million dollars, to 825.7 million dollars. Retail segment net sales decreased by 11.3 percent and corporate apparel sales decreased by 7.5 percent. Operating loss for the quarter was 1,194.3 million dollars compared to operating loss of 42 million dollars last year.
Total net sales increased 7.5 percent on GAAP basis to 3,496.3 million dollars in 2015. Retail segment net sales increased by 8.6 percent and corporate apparel sales decreased by 5.3 percent. Net loss for the full year was 1,026.7 million dollars compared to 0.4 million dollars last year. Diluted loss per share was 21.26 dollars compared to 0.01 dollar in the prior year.On an adjusted basis total net sales decreased 11.1 percent and retail segment net sales for the quarter decreased by 11.3 percent. Corporate apparel sales decreased 7.5 percent. For the full year, total net sales decreased 2.8 percent, retail segment net sales decreased by 2.6 percent on an adjusted basis. Corporate apparel sales decreased by 5.3 percent.
Cost cutting measures to drive growth
"As part of our store rationalisation program we plan to close approximately 250 stores during fiscal year 2016. The store closures fall into three categories. First, we expect to close 80 to 90 full-line Jos. A. Bank stores which we believe have limited potential for meaningful profit improvement. Second, we will close all 49 Jos. A. Bank and nine Men's Wearhouse outlet stores. Lastly, we intend to close between 100 and 110 MW Tux stores. We have refined our Tuxedo Shop @ Macy's rollout schedule and now plan to open 166 stores in 2016 with the balance of 122 stores to be opened in 2017," said Ewert.
Through its extensive profit improvement program, the company expects to reduce expenses by approximately 50 million dollars in 2016. This program includes reduced distribution costs, cost reductions in organisational structure, payroll and employee benefit reductions and savings in occupancy and goods-not-for-resale.
"Reflective of the many operational changes being made and the expectation for a slow recovery at Jos. A. Bank, we believe that fiscal year 2016 adjusted EPS will be in the range of 1.55 dollars to 1.85 dollars. This includes comparable sales of negative mid-teens and significant product margin improvement for Jos. A. Bank," Ewert concluded.