While executives say it’s in line with expectations, Jos. A. Bank’s comparable sales declined 16.3 percent in the second quarter, compared to a 9 percent decline the brand saw in the prior-year period, the clothier’s parent company announced as part of an earnings report released Thursday.
“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,” said Tailored Brands CEO Doug Ewert.
Tailored Brands closed 45 Jos. A. Bank factory stores in the second quarter and eight Men’s Wearhouse outlet stores. The company is on track to close 250 stores by the end of January.
“We continue to execute our transition plan for Tailored Brands and are on track to achieve our targeted $50 million of cost savings in fiscal 2016,” said Ewert.
The second quarter is Tailored Brands’ biggest since it includes prom, graduation and wedding seasons, as well as Father’s Day. The company as a whole saw a slowdown in sales after Father’s Day, executives said Thursday.
While selling margins were not on par with Men’s Wearhouse, Hampstead-based Jos. A. Bank’s selling margin increased 590 basis points. Tailored Brands management said it was encouraged by customer’s response to pricing, store experience and new products.
“We believe we’re creating a healthier base to grow upon,” said Ewert.
Tailored Brands encompasses several other brands, including Joseph Abboud, Moores Clothing for Men and K&G Fashion Superstores.
Men’s Wearhouse bought Jos. A. Bank for $1.5 billion two years ago following a fierce bidding war between the companies. Tailored Brands got its name after establishing a holding company structure earlier this year.
Jos. A. Bank has been trying to turn things around after the new management ended the brand’s famous “buy one suit, get three free” promotions, a move that irked loyal shoppers and experts, especially as more competition in the menswear department increases and casual attire becomes more commonplace in many workplaces.
However, as Jos. A. Bank approaches the one-year mark since it discontinued the promotion, Tailored Brands maintains that the new approach will have better results.
“We believe we are on track to repair this business model,” said CFO Jon Kimmins.
A new ad campaign is also in the works to change people’s perception of Jos. A. Bank by using a man-on-the-street concept to market the clothier as a “lifestyle” brand.
Tailored Brands as a whole had a strong quarter, reporting net income of $25 million or 51 cents on a per share basis, beating Wall Street expectations. The brand fell short of investor expectations in the first quarter by $13.21 million and $0.16 in earnings per share.
Overall, the markets responded better to this quarter’s results, with Tailored Brands stock seeing a 2.34 point uptick – more than 16 percent — in Thursday’s trading. Last quarter, the company’s stock fell about 21 percent, or 3.19 points after the earnings call, leading some analysts to call it the company’s third-worst day on record.