Why Men's Wearhouse Shares Soared


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of specialty retailer Men's Wearhouse (NYS: MW) surged 15% today after its quarterly results and guidance topped Wall Street expectations.

So what: The stock dropped over the first half of 2012 on slumping sales, but a second-quarter beat -- EPS of $1.15 versus the consensus of $1.12 -- coupled with upbeat guidance for the full year, suggests that the trend is indeed turning. In fact, the company's same-store sales increased 4.4% at its namesake stores, giving investors plenty of optimism for organic growth going forward.

Now what: Management now sees full-year 2012 EPS of $2.74 to $2.80, up from its previous view of $2.70 to $2.78. "Customers continue to respond positively to our long-standing service model and our trend-right men's apparel during both promotional and non-promotional periods," said president and CEO Doug Ewert. More important, with the stock trading at a cheapish forward P/E of 12 even after today's run-up, there might still be time to buy into that bullishness.

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The article Why Men's Wearhouse Shares Soared originally appeared on Fool.com.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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