US: Men's Wearhouse cuts outlook despite Q3 profit hike
Clothing retailer Men's Wearhouse has booked a 31% hike in third quarter profit, but warned it expects to swing to a fourth-quarter loss.
A 19% surge in sales in the three months to 30 October helped lift net income to $25.3m or $0.47 per share, up from $19.3m or $0.36 per share, in the same period a year ago.
Excluding costs linked to its acquisition of UK corporate clothing and workwear firms Dimensions and Alexandra, and the closure of some tuxedo distribution operations, the company earned $0.57 per share in the quarter.
Revenue rose to $550.1m from $462m last time, thanks to higher retail, tuxedo rental and corporate apparel sales.
But gross margin as a percentage of total sales fell 101 basis points from 43.7% to 42.7% due to more aggressive promotions and the addition of lower margin corporate apparel business.
For the fourth quarter, Men's Wearhouse expects to post a loss per share in the range of $0.22 to $0.25.
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