Stock to watch: Tailored Brands Inc (NYSE: TLRD)

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Tailored Brands Inc (NYSE: TLRD) stock rose 9.86% on September 13th, 2018 (as of  11:24 AM GMT-4; Source: Google finance) leading to a slight correction today by 1.9% on 14th September, 2018 (as of 11:25 AM GMT-4; Source: Google finance) post  the second quarter 2018 update. The company has increased its outlook for comparable sales and reaffirmed its guidance for other key fiscal 2018 metrics.

TLRD in the second quarter of FY 18 has reported the adjusted earnings per share of $1.07, which is in line with the analysts’ estimates for the adjusted earnings per share of $1.07, as per Zacks Consensus Estimate. The company had reported 3.2% fall in the adjusted revenue to $823.43 million in the second quarter of FY 18, missing the analysts’ estimates for revenue of $828.36. Retail net sales fell 3.2% primarily due to a $26.9 million decrease in rental services revenue due to the 53-week to 52-week calendar shift, the earlier prom season and a shift in demand for weddings to the third quarter.  This was partially offset by an increase in retail clothing sales, which drove positive 1.7% retail comparable sales.  Corporate apparel net sales have fallen 3.9%, or $2.2 million, primarily due to lower sales in the UK partially offset by the impact of a stronger British pound this year.  The Company now expects Corporate apparel net sales to decrease by a low-single-digit percentage in FY18 due to recent trends in the UK business.

Moreover, Men’s Wearhouse comparable sales rose 1.0%. Comparable sales for clothing increased primarily due to an increase in transactions and a slight increase in average unit retail, partially offset by a decrease in units per transaction. Comparable rental services revenue fell 11.5%, primarily reflecting timing impacts of the 53-week to 52-week calendar shift, an earlier prom season, and a shift in demand for weddings to the third quarter.   The Company expects to report roughly flat comparable rental services revenue in the third quarter. Jos. A. Bank comparable sales grew 2.0% primarily due to an increase in transactions, partially offset by a slight decrease in units per transaction, while average unit retail was flat. K&G comparable sales increased 3.5% primarily due to an increase in units per transaction and average unit retail partially offset by a slight decrease in transactions.  Moores comparable sales increased 3.7% primarily due to increases in both transactions and average unit retail, while units per transaction were flat.

Additionally for FY 18, TLRD expects adjusted diluted EPS in the range of $2.35 to $2.50, capital expenditures of approximately $100 million and inventories to reduce by a high-single-digit percentage. The Company continues to expect comparable sales for Men’s Wearhouse and Jos. A. Bank to be positive low-single-digits. The Company is increasing its outlook for Moores comparable sales to be positive low-single-digits, up from flat-to-up slightly, and raising its outlook for K&G comparable sales to be flat-to-up slightly, up from flat-to-down slightly.

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