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Category: Stock Market and Tailored Brands
Date: 12 September 2019 Stock Price: $7.17 We take a look at the 2nd quarter earnings release of their 2019 fiscal year of Tailored Brands, a speciality men's tailored clothing company.
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About Tailored Brands
As the leading specialty retailer of men’s tailored clothing and largest men’s formalwear provider in the U.S. and Canada, Tailored Brands helps men love the way they look for work and special occasions. We serve our customers through an expansive omni-channel network that includes over 1,400 locations in the U.S. and Canada as well as our branded e-commerce websites. Our brands include Men's Wearhouse, Jos. A. Bank, Joseph Abboud, Moores Clothing for Men and K&G.
Financial overview of Tailored Brands' latest earnings report
The numbers we are interested in (for the quarter):
- Net sales: $789.488 million (down from $823.430 million from the same quarter of the previous year)
- Cost of sales: $455.761 million (up from $454.528 million for the same quarter of the previous year)
- Net income: $34.266 million (down from $49.238 million for the same quarter of the previous year)
- Diluted earnings per share: $0.68 (down from $0.97 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 50.624 million (down from 50.851 million for the same quarter of the previous year)
- Cash and cash equivalents: $19.476 million
- Cash and cash equivalents per share: $0.38
- Cash and cash equivalents makes up 5.36% of Tailored Brands' market capital
- Cash and cash equivalents makes up 0.73 % of Tailored Brands' total assets
- Accounts receivable: $65.176 million
- Accounts receivable makes up 2.43% of the Tailored Brands' total assets.
- Inventories: $846.952 million (up from $786.510 million for the same quarter of the previous year)
- Inventories makes up 31.67% of Tailored Brands total assets
- Stockholders equity: $4.56 million
- Stockholders equity per share: $0.09
- Tailored Brands is trading at 79 times its stockholders equity per share
- Cash generated from operations (for 6 months): $41.408 million
- Cash generated from operations per share (for 6 months): $0.817
Tailored Brand's management commentary on the results and earnings guidance
FREMONT, Calif.--(BUSINESS WIRE)-- Tailored Brands, Inc. (NYSE: TLRD) today announced consolidated financial results for the fiscal second quarter ended August 3, 2019.
“We were pleased to deliver second quarter comparable sales in line with our guidance and adjusted earnings per share above our guidance,” said Tailored Brands President and CEO Dinesh Lathi. “We are also seeing early customer response to our initiatives, which gives us confidence that unleashing the potential for this business to generate healthy positive comps lies in our transformational strategies of providing i) personalized products and services, ii) inspiring and seamless experiences in and across every channel, and iii) brands that stand for more than just price.”
Lathi added, “On our year-end call, we indicated that we had work ahead of us to transform our customer-facing experience to one that can generate sustainable and profitable growth. We also said that, while we transform the experience, we would execute and invest in a focused manner with a clear goal of continuing to generate cash that we would deploy responsibly. Our sale of the corporate apparel business is consistent with our commitment to focused execution and investment. The Board of Directors’ unanimous decision to suspend the quarterly cash dividend for reallocation to debt repayment and share repurchases is consistent with our commitment to responsible allocation of capital. And while our Q2 results and Q3 guidance reflect what we’ve previously shared about the need to transform our customer experience and the fact that transformations take time, the early signs of customer response to our strategies indicate that we are making healthy progress on our journey.”
Q3 FISCAL 2019 OUTLOOK
The Company’s outlook for the third quarter of fiscal 2019 is as follows:
“We were pleased to deliver second quarter comparable sales in line with our guidance and adjusted earnings per share above our guidance,” said Tailored Brands President and CEO Dinesh Lathi. “We are also seeing early customer response to our initiatives, which gives us confidence that unleashing the potential for this business to generate healthy positive comps lies in our transformational strategies of providing i) personalized products and services, ii) inspiring and seamless experiences in and across every channel, and iii) brands that stand for more than just price.”
Lathi added, “On our year-end call, we indicated that we had work ahead of us to transform our customer-facing experience to one that can generate sustainable and profitable growth. We also said that, while we transform the experience, we would execute and invest in a focused manner with a clear goal of continuing to generate cash that we would deploy responsibly. Our sale of the corporate apparel business is consistent with our commitment to focused execution and investment. The Board of Directors’ unanimous decision to suspend the quarterly cash dividend for reallocation to debt repayment and share repurchases is consistent with our commitment to responsible allocation of capital. And while our Q2 results and Q3 guidance reflect what we’ve previously shared about the need to transform our customer experience and the fact that transformations take time, the early signs of customer response to our strategies indicate that we are making healthy progress on our journey.”
Q3 FISCAL 2019 OUTLOOK
The Company’s outlook for the third quarter of fiscal 2019 is as follows:
- Earnings per Share: The Company expects to achieve adjusted diluted EPS in the range of $0.40 to $0.45, excluding the impact of any share repurchases.
- Comparable Sales: The Company expects comparable sales for:
- Men’s Wearhouse to be down 3% to 5%
- Jos. A. Bank to be down 2% to 4%
- K&G to be down 2% to 4%
- Moores to be down 4% to 6%.
- Effective Tax Rate: The Company expects an effective tax rate of 23% to 24%.
- Real Estate: The Company expects net closures of seven stores, across Men’s Wearhouse and Jos. A. Bank.
- The Company’s outlook excludes expected costs for third party domain experts and other actions associated with its cost savings and operational excellence programs.
Tailored Brands (NYSE: TLRD) stock price history
The image below, obtained from from Google, shows thee stock price history of Tailored Brands over the last 5 years. And its been a horrific time for stockholders. 5 years ago it was trading at $50 a stock, and currently it is trading at $7.17 a share. Thats a stock price decline of 85% for Tailored Brands over the last 5 years.
And based on the reaction by the markets in after hours trade to the group's earnings results, the bad times experienced by Tailored Brands stockholders is about to get a whole lot worse. The image below shows the price action in Tailored Brands in after hours trade. And ts down -29.36%
Recent coverage of Tailored Brands
The extract below touches on the latest news regarding Tailored Brands as obtained from Marketwatch
Tailored Brands Inc. TLRD, +5.75% fell 33% in the extended session Wednesday after the stock was halted at the last hour of the regular trading following the retailer's second-quarter earnings. Tailored Brands, the owner of Men's Wearhouse and other apparel brands, reported mixed second-quarter earnings, halted its dividend, and called for lower profits in the third quarter. For the third quarter, the company said it expects adjusted EPS between 40 cents and 45 cents, compared with an analyst expectation of 88 cents a share, according to FactSet. Tailored also called for sales declines across the board in the quarter, including a fall between 3% and 5% in same-store sales at Men's Wearhouse. Tailored Brands said it expects a net closure of seven stores across Men's Wearhouse and Jos. A. Bank for the quarter. The company halted its dividend to pay down debt, it said. The stock has lost 47% this year, versus gains of 20% for the S&P 500 index. SPX, +0.72%
Read the full article here.
Tailored Brands Inc. TLRD, +5.75% fell 33% in the extended session Wednesday after the stock was halted at the last hour of the regular trading following the retailer's second-quarter earnings. Tailored Brands, the owner of Men's Wearhouse and other apparel brands, reported mixed second-quarter earnings, halted its dividend, and called for lower profits in the third quarter. For the third quarter, the company said it expects adjusted EPS between 40 cents and 45 cents, compared with an analyst expectation of 88 cents a share, according to FactSet. Tailored also called for sales declines across the board in the quarter, including a fall between 3% and 5% in same-store sales at Men's Wearhouse. Tailored Brands said it expects a net closure of seven stores across Men's Wearhouse and Jos. A. Bank for the quarter. The company halted its dividend to pay down debt, it said. The stock has lost 47% this year, versus gains of 20% for the S&P 500 index. SPX, +0.72%
Read the full article here.
Tailored Brands (NYSE: TLRD) latest stock valuation
So was the market justified in punishing Tailored Brands stock so hard after the release of their latest earnings report. The short answer is absolutely. Based on their latest earnings report and their outlook provided our valuation model sets a target (full value) price on Tailored Brands of $6.10. We therefore believe the stock will remain under pressure in the short term and we expect it to settle down at levels close to our target price in coming weeks and months.