Tailored Brands: FY17 adjusted EPS rise to 2.20 dollars

For the fourth quarter ended February 3, 2018, Tailored Brands reported GAAP diluted loss per share of 0.01 dollar and adjusted diluted loss per share of 0 compared to 0.62 dollar and 0.19 dollar for the fourth quarter last year. For the fiscal year, the company reported GAAP diluted EPS of 1.95 dollars and adjusted diluted EPS of 2.20 dollars, compared to 0.51 dollar and 1.79 dollars respectively. The company has also announced the sale of its MW Cleaners business for approximately 18 million dollars, as part of the Company's strategy to focus on its core businesses and unlock cash flow.

"In 2017, we delivered significant EPS growth and finished the year strong with positive comparable sales for both Men's Wearhouse and Jos. A. Bank in the fourth quarter," said Tailored Brands CEO Doug Ewert in a statement, adding, "We also significantly strengthened our balance sheet, reducing debt by approximately 200 million dollars and lowering inventories by 11 percent. In 2018, we plan to further reduce our debt, invest behind our growth strategies and return cash to shareholders via our dividend."

Q4 net sales rise 8.4 percent at Tailored Brands

Total net sales for the fourth quarter increased 8.4 percent to 859.9 million dollars, including a 45.7 million dollars benefit from the 53rd week. Retail net sales increased 6.6 percent due to an increase in retail segment comparable sales of 2.5 percent and a 40.7 million dollars benefit from the 53rd week. Corporate apparel net sales increased 32.2 percent due to the rollout of new uniform programs in the US and UK, a 5 million dollars benefit from the 53rd week and the impact of a stronger British pound this year compared to last year.

Men's Wearhouse comparable sales increased 2.3 percent with comparable sales for clothing increasing due to an increase in transactions, partially offset by a decrease in units per transaction, while average unit retail was flat. Comparable rental services revenue increased 2.1 percent, primarily reflecting an increase in rental units. Jos. A. Bank comparable sales increased 5.3 percent, while K&G comparable sales decreased 1.7 percent, and Moores comparable sales decreased 1.4 percent.

On a GAAP basis, consolidated gross margin was 320.9 million dollars, an increase of 18.8 million dollars due to the increase in net sales. As a percent of sales, consolidated gross margin decreased 80 basis points to 37.3 percent and on an adjusted basis, consolidated gross margin decreased 80 basis points, primarily due to a decrease in retail gross margin rate.

On a GAAP basis, retail gross margin was 302.2 million dollars, an increase of 14.6 million dollars. As a percent of sales, retail gross margin decreased 60 basis points to 38.4 percent, while on an adjusted basis, retail gross margin increased 14.1 million dollars while the retail gross margin rate decreased 60 basis points.

On a GAAP basis, operating income was 13.3 million dollars compared to an operating loss of 18.9 million dollars last year and on an adjusted basis, operating income was 14.8 million dollars compared to 9.3 million dollars last year. As a percent of sales, adjusted operating margin increased 50 basis points to 1.7 percent. On a GAAP basis, net loss was 0.5 million dollars compared to a net loss of 30.1 million dollars last year. On an adjusted basis, fourth quarter net loss was 0.1 million dollars compared to 9.2 million dollars last year. The company estimates the impact of the extra week in 2017 was 0.05 dollar per diluted share.

Full year net sales down 2.2 percent at Tailored Brands

Total net sales decreased 2.2 percent to 3,304.3 million dollars with retail net sales decreasing 1.5 percent primarily due to the impact of last year's store closures partially offset by the 40.7 million dollars benefit from the 53rd week and an increase in retail segment comparable sales of 0.1 percent. Corporate apparel net sales decreased 10.3 percent.

Men's Wearhouse comparable sales decreased 1.1 percent with comparable sales for clothing decreasing due to a decrease in transactions and units per transaction, partially offset by an increase in average unit retail. Comparable rental services revenue decreased 2 percent, reflecting a consumer shift to purchase suits for special occasions.

Jos. A. Bank comparable sales increased 5.4 percent, while K&G comparable sales decreased 3.1 percent and Moores comparable sales decreased 2 percent on last year.

On a GAAP basis, consolidated gross margin was 1,408.8 million dollars, a decrease of 32.7 million dollars due to a decrease in corporate apparel net sales. As a percent of sales, consolidated gross margin decreased 10 basis points to 42.6 percent and on an adjusted basis, consolidated gross margin increased 10 basis points to 42.7 percent. On a GAAP basis, retail gross margin was 1,343 million dollars, a decrease of 10.8 million dollars. As a percent of sales, retail gross margin increased 30 basis points to 44 percent. On an adjusted basis, retail gross margin decreased 8.2 million dollars but the retail gross margin rate increased 40 basis points compared to last year.

On a GAAP basis, operating income was 229.4 million dollars compared to 132.8 million dollars last year. As a percent of sales, operating margin increased 300 basis points to 6.9 percent and on an adjusted basis, operating income was 248.1 million dollars, up 8.2 percent compared to 229.2 million dollars last year. As a percent of sales, adjusted operating margin increased 70 basis points to 7.5 percent. On a GAAP basis, net income was 96.7 million dollars compared to 25 million dollars last year, while on an adjusted basis, net income was 108.6 million dollars compared to 87.3 million dollars last year.

FY18 GAAP diluted EPS expected to range between 2.35 to 2.50 dollars

For fiscal 2018, the company expects to achieve GAAP diluted EPS in the range of 2.35 dollars to 2.50 dollars, comparable sales for Men's Wearhouse and Jos. A. Bank to be positive low-single-digits, Moores comparable sales to be flat-to-up slightly and K&G comparable sales to be flat-to-down slightly.

The company expects approximately net 10 store closures in 2018 resulting from its continuous review of its real estate portfolio for opportunities to optimize its fleet as lease terms expire.

Picture:Facebook/Men's Wearhouse

 

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