Tailored Brands report rise in Q1 net sales and earnings

For the first quarter ended May 5, 2018, Tailored Brands, Inc. reported GAAP diluted earnings per share of 0.27 dollars and adjusted diluted earnings per share of 0.50 dollars, compared to 0.04 dollar and 0.27 dollars respectively, reported last year. Total net sales increased 4.5 percent to 818 million dollars.

"Our improved first quarter results reflect continued execution on our growth strategies," said Tailored Brands CEO Doug Ewert in a statement, adding, "During the quarter, we refinanced our term loan on favourable terms, extending its maturity to 2025, and we reduced our total debt by 110 million dollars."

Highlights of Tailored Brands’ Q1 performance

The company’s retail net sales increased 4.1 percent due to the benefit from the 53-week to 52-week calendar shift and an earlier Easter, as well as the increase in retail segment comparable sales of 2.1 percent. Corporate apparel net sales increased 9.6 percent or 5.5 million dollars due to the impact of a stronger British pound this year compared to last year.

Men's Wearhouse comparable sales increased 3.2 percent. Comparable sales for clothing, the company said, increased primarily 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 decreased 3.9 percent.

Jos. A. Bank comparable sales increased 1.2 percent, K&G comparable sales decreased 1.7 percent and Moores comparable sales increased 1.8 percent for the quarter under review.

On a GAAP basis, consolidated gross margin was 345.2 million dollars, an increase of 12.8 million dollars, due to the increase in net sales. As a percent of sales, consolidated gross margin decreased 30 basis points to 42.2 percent. On an adjusted basis, consolidated gross margin decreased 40 basis points, primarily due to a decrease in retail gross margin rate.

On a GAAP basis, operating income was 52.9 million dollars compared to 31 million dollars last year, while on an adjusted basis, operating income was 56.5 million dollars compared to 48.2 million dollars last year. As a percent of sales, adjusted operating margin increased 70 basis points to 6.9 percent.

On a GAAP basis, net loss on extinguishment of debt was 12.7 million dollars compared to a net gain on extinguishment of debt of 0.7 million dollars last year. On a GAAP basis, net earnings were 13.9 million dollars compared to 1.8 million dollars last year. On an adjusted basis, net earnings were 25.3 million dollars compared to 13.3 million dollars last year.

Tailored Brands reaffirms FY18 outlook

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

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