[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / September 12, 2016 / Active Wall St. announces its post-earnings coverage on Tailored Brands, Inc. (NYSE: TLRD). The company released its financial results for the second quarter fiscal 2016 (Q2 FY16). The Fremont, California-based company reported higher-than-expected second quarter earnings numbers and has maintained its full-year EPS forecast range. Register with us now for your free membership at: http://www.activewallst.com/register/.
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Earnings Reviewed
During the three months ended on July 30, 2016, Tailored Brands reported total net sales of $909.68 million compared to $920.07 million in the prior year's corresponding quarter. Total net sales topped analysts' forecasts of $886.4 million. The company's GAAP net income for Q2 FY16 came in at $24.98 million, or $0.51 per diluted share, compared to $47.78 million, or $0.98 per diluted share, in Q2 FY15.
The specialty apparel retailer's adjusted net earnings for Q2 FY16 stood at $48.14 million, or $0.99 per diluted share, below $52.18 million, or $1.07 per diluted share, reported in the year-ago period. However, adjusted net earnings for Q2 FY16 were above analysts' expectation of $0.92 per diluted share.
"Our second quarter results showed improvement compared to the first quarter yet reflected a challenging retail apparel spending environment as well as the continued transitioning of our Jos. A. Bank business," President and CEO, Doug Ewert said in a statement.
The company announced that they have shut down 104 stores in the reported quarter and would pull the shutter on 250 stores by the end of FY16.
Segment-wise
The company's total retail sales was $830.18 million, or 91.26% of total net sales, in Q2 FY16 compared to $858.91 million, or 93.35% of total net sales recorded during Q2 FY15, driven by driven by higher average unit retail.
Tailored Brands' Men's Wearhouse reported net sales of $482.9 million, or 53% of total net sales, in Q2 FY15. The brand's comparable sales improved 2.9% in the reported quarter versus a growth of 3.1% in Q2 FY15.
Furthermore, the company's Jos. A. Bank recorded net sales of $186.0 million, or 20% of total net revenues. However, the brand's comparable sales were down by 16.3% on y-o-y basis, which was consistent with the company's Q1 FY16 results and in-line with its expectations.
For the quarter ending July 30, 2016, Tailored Brands' Corporate apparel clothing product segment's net sales grew 30% on y-o-y basis to $79.50 million, or 9% of total net revenues, in Q2 FY16.
Financial Metrics
Tailored Brands' gross margin fell 40 basis points in the reported quarter to 45.10%. The company's retail segment gross margin was negatively impacted by clearance sales at Jos. A. Bank factory stores, and stood at 46.04% in Q2 FY16, down 55 basis points on y-o-y basis. However, the Corporate apparel business segment's gross margin improved over 500 basis points to stand at 35.38% at the end of reported quarter.
The company's operating income for Q2 FY16 was $59.63 million, or 6.56% of total net sales compared to operating income of $98.12 million, or 10.66% of total net sales, in Q2 FY15.
Cash Flow and Balance Sheet
During the reported quarter, the company's inventories increased by $66.6 million to $1.02 billion, primarily due to lower sales and increased corporate apparel inventory at Jos. A. Bank.
As on July 30, 2016, the company had total debt of $1.60 billion and had cash and equivalents worth $11.43 million at the close of book on July 30, 2015, compared to $73.40 million as on August 01, 2015.
Outlook
For full FY16, Tailored Brand's maintained its previous non-GAAP adjusted earnings guidance of $1.55 per share to $1.85 per share. The company also informed Wall Street that its total comparable sale is likely to be flat to slightly up for FY17, lower than the previously announced guidance of low single-digit growth.
Peer Performance
On August 24, 2016, Guess', Inc. reported a 0.2% y-o-y fall in its Q2 FY17 total revenue to $545.0 million. However, the company's GAAP net earnings surged 76.4% y-o-y to $18.3 million during the second quarter ended July 30, 2016.
Gap Inc., in its earnings release on August 18, 2016, had reported net sales of $3.85 billion in Q2 FY16, compared to $3.90 billion in Q2 FY15. The company's Q2 FY16 net income was $125 million, or $0.31 per diluted share, compared to $219 million, or $0.52 per diluted share, in Q3 FY15.
Stock Performance
Tailored Brands' stock is trading slightly down 0.60%, closing last Friday's session at $16.47. A total volume of 2.6 million shares were traded during the day, which was above the 3 months average volume of 1.41 million shares. The company's shares gained 15.02% since the beginning of the year. Additionally, the stock has advanced 22.18% in the last one month and 41.98% in the past three months. The company's shares have a dividend yield of 4.37%.
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