Tailored Brands Shares Jump as Retailer Reports Profit

Tailored Brands Inc., the former Men's Wearhouse, swung to a quarterly profit and gave a rosy outlook for same-store sales, sending shares sharply higher after hours.

Sales at Jos. A. Bank stores open for at least a year are now expected to increase in the mid- to high-single digits. Analysts surveyed by FactSet project a 2.4% increase.

Citing results so far this year and the expectation that a key sales metric at Jos. A. Bank returns to growth, the company said it now expects to make $1.70 to $1.85 a share for the financial year, compared with its previous view of $1.55 to $1.85 a share.

Shares, up 29% this year, rose 22% to $23.05 in after-hours trading.

Men's Wearhouse bought Jos. A. Bank, its one-time rival, in 2014 for $1.8 billion. At the time, the tie-up of the men's suit makers was seen as giving the combined company more leverage with suppliers while allowing it to save money from back-office operations and advertising. But the company has reported two consecutive annual losses as it wrote down the purchase amid struggling sales and overhauling the "Buy 1, Get 3 Free" marketing strategy that had made Jos. A. Bank famous. Company officials found the strategy unsustainable and only accelerated the sales decline.

In the latest period, sales at Jos. A. Bank stores open for at least a year fell 9.8%, compared with a projected decline of 11.8% by analysts.

Over all, Tailored Brands reported a third-quarter profit of $28.4 million, or 58 cents a share. Excluding certain charges, profit rose to 68 cents from 50 cents a year earlier.

Sales fell 2% to $846.9 million, the fifth consecutive sales decline.

The results beat projections.

The company has been closing stores as part of a cost-cutting push to revamp operations. In the most recent period, it closed 83 stores, ending the quarter with 1,710 stores.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

December 07, 2016 19:05 ET (00:05 GMT)

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