Men's Wearhouse Inc. (NYSE:MW) is the largest specialty retailer which provide men's suits in the U.S. and Canada with 1,748 stores including tuxedo shops within Macy's (NYSE:M) stores. Shares Men's Wearhouse plunged 23.93% to $13.99 this morning. The company announced third quarter financial result yesterday. Total net sales decreased 2.83% to $865.446 million compared with last year same quarter. Operating income declined 28.8% to $61 million compared with last year same quarter. Adjusted earnings per share is $0.50 which meet the expectation.
Doug Ewert, Men's Wearhouse’s CEO said, "When we acquired Joseph Bank, we knew that we needed to correct the promotional model. However, we underestimated the impact to the near-term performance as we began to execute the difficult, but necessary, corrective steps. We remain confident that these steps will restore a long-term, sustainable, profit model and reshape the business for a healthy and growing Jos. A. Bank.”
In addition to promote changes, the company is relied on a loyalty program, data search, merchandise variety, and consulting firm AlixPartners to help turn Jos. A. Bank around.
Zacks has rated Men’s Wearhouse as of strong sell in short term from analysts at Zacks with a rank of 5. Men’s Wearhous has been rated an average of 2.5 by four Wall Street Analysts. However, one analyst has added the shares in their list of strong buys, and three broker firms have suggested hold it.
Stock price of Men’s Wearhouse plunged 53.33% during last one year. It reached the top price of $66.18 at June 22, and the bottom price of $18.09 at November 17. The average movement of 200 days is $48.35, and S&P 500 has rose back 1.85% during the last one year.
This slump shouldn’t be too much of a surprise to investors, as the company, a specialty apparel retailer operating in the U.S., Puerto Rico, and Canada, has seen 1 negative revision in the past few weeks and its current year earnings consensus has also moved lower over the last 30 days. This suggests there may be more trouble down the road. So make sure to keep an eye on this stock going forward to see if this recent slump will continue, as the earnings picture definitely suggests that this might be the case.
Today’s slump of Men’s Wearhouse should not be too much surprise to investors while the company’s current consensus earnings keep falling during last 30 days. This slump may not the end of trouble. Investors should keep their eye on the next movement of Men’s Wearhouse.