US: The Men's Warehouse Q3 earnings rise
- Q3 sales increased 0.5%
- Net income was $19.7m
- Q4 same-store sales to fal in single digit range
Despite a reduction in store traffic, The Men's Wearhouse has reported a rise in its third quarter earnings per share and outdone its guidance given in September. However, the company has warned that it expects fourth quarter store sales to be flat to lower on the same period last year.
Diluted earnings per common share were $0.37 for the third quarter. This compares to guidance given in September of $0.27 to $0.30. Prior year third quarter EPS were $0.28 and adjusted EPS was $0.30.
The company said that total company sales increased 0.5% for the quarter. Clothing product sales, representing 72.3% of fiscal third quarter 2009 total net sales, decreased 0.2% due to decreases in the company's comparable store sales primarily driven by a reduction in store traffic levels, offset by higher average ticket, the company said.
Tuxedo rental sales, representing 21.1% of fiscal third quarter 2009 total net sales, increased 1.2%.
Selling, general, and administrative expenses were $172.6m in the current year and decreased 2.6% from the prior year's adjusted SG&A of $177.1m which excludes $1.8 million in costs associated with the closing of Golden Brand. The decrease is primarily due to cost-cutting measures and operational efficiencies.
Operating income was $30.1m or 6.5% of total net sales compared to adjusted operating income of $25.6 million or 5.6% of total net sales for the same period last year, excluding $1.8 million in Golden Brand closure costs.
Net income was $19.7m or 4.3% of total net sales compared to adjusted net income of $15.7m or 3.4% of total net sales for the same period last year, which excludes $1.1 million in Golden Brand closure costs (net of tax).
The company said it anticipates comparable store sales to decrease in the low single digit range at the Men's Wearhouse in the fourth quarter. The Moores comparable store sales are expected to be flat to a low single digit increase. The K&G comparable store sales are anticipated to be flat to a low single digit decrease. Total company sales are expected to decline in low single digit range for the fourth quarter. This includes a low single digit decrease in tuxedo rental revenues.
Selling, general and administrative expenses for the fourth quarter are expected to be in the range of flat to a 1% increase from the prior year, excluding advertising costs, a prior year pretax non-cash fixed asset impairment charge of $1.8m and a prior year gain of $8.8m associated with an eminent domain sale of a distribution centre.
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Retailer Men's Wearhouse posted a fourth quarter loss of US$18.9m, impacted by a 4% sales decline....
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