Men's Wearhouse cuts guidance, shares fall
Shares of retailer Men's Wearhouse fall after cutting 2013 guidance
FREMONT, Calif. (AP) -- The Men's Wearhouse Inc. said Wednesday that its net income fell 28 percent during the fiscal second quarter, hurt by one-time charges and an early Easter that pushed prom tuxedos rentals earlier than usual.
The men's clothing retailer also cut its full year guidance, sending its shares down 14 percent in after-hours trading.
Net income fell to $42.9 million, or 85 cents per share, in the three months ending July 28, from $59.4 million, or $1.15 per share, in the same period a year ago.
It reported adjusted earnings of $1.01 per share in the second quarter. Analysts, on average, expected earnings of $1.14 per share, according to FactSet.
The company, which runs its namesake chain of men's clothing stores, as well as the Moores and K&G retail chains, said that the earlier Easter pushed prom tuxedo rentals to the first quarter, hurting second-quarter earnings by about 10 cents per share. Payroll related costs and other charges hurt earnings by 16 cents per share.
Revenue fell 2.3 percent to $647.3 million from $662.3. That's below the $670.8 million analysts expected, according to FactSet.
The company now expects full-year earnings between $2.40 per share and $2.50 per share. That's down from its previous forecast of $2.70 per share to $2.80 per share.
The company said in a statement that it is "concerned" about the trends in the apparel industry. Many retailers, ranging from Wal-Mart Stores Inc. to Macy's Inc., have cut their outlooks recently on worries that consumers are cutting their spending.
Sales at stores open at least year fell 2.1 percent at the Men's Wearhouse during the second quarter, 5.5 percent at Moores and 5.1 percent at K&G. That is a key indicator of financial performance because it excludes recently opened and closed stores.
In June, the company fired George Zimmer, its chairman and face of the company. Zimmer, who founded the company in 1973, used to appear in many of its TV commercials with the slogan, "You're going to like the way you look. I guarantee it."
Shares of the company fell $5.57 to $33.15 in after-hours trading Wednesday following the release of the earnings report. Its shares fell 24 cents to close at $38.77 during regular trading hours Wednesday.
