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Tailored Brands Q1 GAAP diluted earnings per share $0.14

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Christian Fernsby |
Tailored Brands
Tailored Brands   Retail net sales decreased 4.0% primarily due to the decrease in retail segment

Tailored Brands announced consolidated financial results for the fiscal first quarter ended May 4, 2019.

For the first quarter ended May 4, 2019, the company reported GAAP diluted earnings per share of $0.14 and adjusted diluted earnings per share of $0.21, compared to GAAP diluted earnings per share of $0.27 and adjusted diluted earnings per share of $0.50 last year.

First quarter 2019 results include $4.4 million of charges related to company's multi-year cost savings and operational excellence programs consisting of $3.1 million in consulting costs, $1.1 million in severance costs and $0.2 million in lease termination costs.

Total net sales decreased 4.5% to $781.4 million.

Retail net sales decreased 4.0% primarily due to the decrease in retail segment comparable sales of 3.2%.

Corporate apparel net sales decreased 10.1%, or $6.4 million, primarily due to lower replenishment demand in the U.S. as well as the impact of a weaker British pound this year compared to last year.

Men’s Wearhouse comparable sales decreased 4.5%.

Comparable sales for clothing decreased primarily due to lower transactions and units per transaction, partially offset by an increase in average unit retail.

Comparable rental services revenue decreased 6.0%, primarily reflecting the Easter shift and continuing trend to purchase suits for special occasions.

Jos. A. Bank comparable sales decreased 0.7% primarily from a decrease in both units per transaction and transactions partially offset by an increase in average unit retail.

K&G comparable sales decreased 0.5% primarily due to a decrease in transactions and units per transaction partially offset by an increase in average unit retail.

Moores comparable sales decreased 4.6% primarily due to a decrease in transactions and units per transaction partially offset by an increase in average unit retail.

On a GAAP basis, consolidated gross margin was $320.6 million, a decrease of $24.7 million, primarily due to the decrease in net sales.

As a percent of sales, consolidated gross margin decreased 120 basis points to 41.0%.

On an adjusted basis, consolidated gross margin decreased 120 basis points to 41.1% primarily due to deleveraging of occupancy costs and the greater mix of clothing product sales versus rental services revenue.

On a GAAP basis, retail gross margin was $305.4 million, a decrease of $23.3 million.

As a percent of sales, retail gross margin decreased 140 basis points to 42.1%.

On an adjusted basis, retail gross margin decreased $23.1 million and the retail gross margin rate decreased 140 basis points to 42.2%, primarily due to deleveraging of occupancy costs and the greater mix of clothing product sales versus rental services revenue due to the Easter shift.

Advertising expense increased $3.8 million to $45.0 million primarily reflecting the launch of new brand campaigns for Men’s Wearhouse and Jos.

A. Bank, and more expensive local instead of more economical national broadcast media to support planned tests.

As a percent of sales, advertising expense increased 70 basis points to 5.8%.

On a GAAP basis, operating income was $30.3 million compared to $52.9 million last year and operating margin decreased 260 basis points.

On an adjusted basis, operating income was $34.7 million compared to $56.5 million last year.

As a percent of sales, adjusted operating margin decreased 250 basis points to 4.4%.

Net interest expense was $18.6 million compared to $21.9 million last year.

The decrease in interest expense was due to reducing company's outstanding debt.

On a GAAP basis, there was no net loss on extinguishment of debt this year compared to a $12.7 million loss on extinguishment of debt last year.

Last year’s net loss on extinguishment of debt includes $11.9 million related to the write-off of deferred financing costs and original issue discount resulting from the company’s refinancing of its Term Loan.

On an adjusted basis, there was no net loss on extinguishment of debt this year compared to a net loss on extinguishment of debt of $0.9 million last year.


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