• Profit declined 27.8% to US$42.9m versus $59.4m
  • Sales slipped 2.3% to $647.3m from $662.3m 
  • Gross margin down 65 basis points 

 

Men's apparel retailer Men's Wearhouse has lowered its full-year earnings guidance, after one-off charges and a shift in tuxedo rental revenues weighed on second-quarter net profit.

The company, which operates 1,137 stores, incurred $12.4m in costs related to its acquisition of designer brand Joseph Abboud last month, separation costs associated with a former executive, and an impairment charge related to K&G. 

Retail sales edged down 1.9% year-on-year, while corporate apparel sales fell 6.6%. Gross margin fell 65 basis points, primarily due to a shift in tuxedo revenues because of the timing of Easter and the deleveraging of occupancy costs.

President and CEO Doug Ewert said: "Retail clothing sales during the second quarter were below our internal plan as we experienced a decline in customer traffic compared to last year's second quarter. We believe this is primarily due to macro issues affecting the apparel retailing space."

Men's Wearhouse now expects adjusted earnings per share to be $2.40-2.50, down from its previous guidance of $2.70-2.80. It also forecasts comparable store sales growth of 2%.

"We are being cautious as we face macro-economic headwinds. However, we believe our operating and capital allocation plans, our margin enhancement strategies, including new store openings and the expansion of exclusive brands, and our new omni-channel marketing initiatives introduced in 2013 position us to grow market share as we manage through this," Ewert added.