Men's Wearhouse 1Q profit tops expectations

DALLAS (AP) — First-quarter profit at clothing retailer Men's Wearhouse Inc. fell 47 percent as fewer customers came in to shop, but cost-cutting measures helped results top Wall Street expectations and the company forecast a strong second-quarter performance.

Shares jumped 9 percent in after-hours trading to $19.49, having closed earlier down 10 cents at $17.87.

The Dallas-based chain retailer, which sells men's suits and other clothing and rents tuxedos, said profit totaled $5.3 million, or 10 cents a share, for the period ended May 2. That's down from year-ago profit of $9.9 million, or 19 cents a share a year ago.

Total sales fell about 6 percent to $464.1 million from $491.1 a year ago. Clothing product sales fell 7.6 percent, the company said, though tuxedo rental sales increased 1.7 percent.

Despite declining year-over-year, the results topped the average expectations of analysts surveyed by Thomson Reuters, who had forecast a loss of a penny per share on sales of $459.3 million.

Looking ahead, the company said it expects second-quarter profit in the range of 56 cents to 60 cents a share, with sales forecast to decline by 3 percent to 5 percent. Analysts are predicting quarterly profit of 56 cents per share, on average, and sales of $518.3 million.

Men's Wearhouse said same-store sales in its retail apparel business will likely decline by 4 percent to 6 percent, while tuxedo rental revenue at stores open at least a year is forecast to rise 3 percent to 5 percent.

Cost-cutting measures are expected to reduce second-quarter costs by 6 percent to 8 percent, excluding advertising costs and $7.3 million in prior-year costs associated with the closing of Golden Brand.

The company said it plans to open about eight new stores this year, although it could be more if new real estate opportunities arise. Men's Wearhouse has 1,284 stores in North America.

A conference call to discuss results was delayed until Thursday because of the company's successful bid to buy Filene's Basement chain in federal bankruptcy court.

Men's Wearhouse affiliate K&G Acquisition Corp. offered $67 million and beat out two other bidders to successfully acquire the Filene's Basement brand, up to 20 store leases, inventory and leases for the company's Burlington, Mass., headquarters and a distribution center in Massachusetts.