What's In Store for Men's Wearhouse Earnings
Men's Wearhouse will release its quarterly report on Wednesday, and shareholders have continued to enjoy a stock price that's near levels not seen since before the financial crisis. Yet at least this quarter, Men's Wearhouse earnings aren't likely to produce the growth that could help sustain those share-price advances.
Men's Wearhouse is a well-known retailer of suits, sportcoats, and other business-oriented clothing for men. Yet the company has also been looking to update its image, seeking to woo millennials with more of an eye toward fashion than their Generation X counterparts. To that end, Men's Wearhouse has made some huge changes that will affect its perception among consumers and investors alike. Let's take an early look at what's been happening with Men's Wearhouse over the past quarter and what we're likely to see in its report.
Stats on Men's Wearhouse
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Can Men's Wearhouse earnings grow this quarter?
Analysts have had mixed views on Men's Wearhouse earnings in recent months, cutting their July-quarter estimates by almost a dime per share but raising their full-year estimates for this year and next by more modest amounts. The stock has done reasonably well, climbing 8% since early June.
The key event that grabbed attention among those who follow Men's Wearhouse was the company's decision to remove founder George Zimmer as executive chairman of the board. Despite the heated exchanges that followed, one could argue that fundamental considerations drove the decision. In its first-quarter results, the company posted a 5% jump in revenue based on 1.6% higher same-store sales. But outside the namesake Men's Wearhouse business in divisions like its K&G unit and the Canadian retail brand Moores Clothing, comps were sharply negative. Downgraded guidance for the full year in expectations for slightly lower same-store sales also disappointed investors.
The big question facing Men's Wearhouse is whether its move to dismiss Zimmer will make it more popular among millennial shoppers. So far, competitors Jos. A Bank , Nordstrom , and Macy's are doing a better job of earning favorable opinions from those under age 35 than Men's Wearhouse is. Those 35 and up still prefer Men's Wearhouse to its competitors, but they're also arguably more likely to have related to Zimmer as an appealing asset of the business.
High unemployment levels have also hurt Men's Wearhouse and its peers. With millions unemployed and many more underemployed in jobs that don't necessarily require business attire, formal wear retailers don't have as much demand as they'd ordinarily have during better times.
Still, the company is seeking to make smart strategic moves. Last month, it completed the purchase of the parent company of the Joseph Abboud apparel and accessories line. The move cost Men's Wearhouse $97.5 million in cash but adds a new dimension to the company.
In the Men's Wearhouse earnings report, watch to see how new CEO Doug Ewert handles discussion of the retailer's future. With so much strife in the wake of its founder's departure, Ewert will have to work hard to make investors confident that Men's Wearhouse will keep moving in the right direction.
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The article What's In Store for Men's Wearhouse Earnings originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned, either. 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 Motley Fool has a disclosure policy.
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