Tailored Brands comps up across the board; Dinesh Lathi to take over day-to-day operations

By

Robin Driver

Published
Sep 14, 2018

Menswear group Tailored Brands, Inc. reported positive comps across its brands in Q2 2019 on Wednesday but registered declines in overall net sales and earnings as the date of CEO Doug Ewert’s exit approaches.  
 

The company’s total net sales for the quarter fell 3.2% to $823.4 million. The biggest decline was posted by Tailored Brands’ corporate apparel segment, where net sales decreased by 3.9%, primarily due to falling sales in the UK.
 
Revenues in the company’s retail segment dropped 3.2% to $767.9 million, largely due to calendar shifts which negatively impacted the company’s rental services to the tune of $26.9 million, as prom season occurred earlier in the year and wedding demand moved into Q3.

Comparable rental services also decreased 11.5% during the period. Overall retail comps, however, rose 1.7%, thanks to progress across the company’s brand portfolio. Despite tumbling rental transactions, Men’s Wearhouse reported a 1.0% comps increase, while Jos. A. Bank saw a rise of 2.0%. K&G and Moores were both strong performers, registering comps increases of 3.5% and 3.7%, respectively.
 
The company’s second-quarter net earnings totaled $49.2 million, down from $58.5 million in the prior-year period.
 
In a release, Tailored Brands CEO Doug Ewert, who retires at the end of the month, said, “We are pleased to report positive comparable sales for all of our retail brands this quarter. We executed well on growing our custom business and on increasing transactions through brand marketing campaigns and enhanced omni-channel initiatives.”
 
During the company’s second-quarter earnings call on Wednesday it was revealed that executive board chairman Dinesh Lathi will lead Tailored Brands’ day-to-day operations while the company searches for Ewert’s replacement following his departure.
 
Lathi, who will not take the title of interim CEO, joined Tailored Brands’ Board in 2016 and was previously CEO of homeware website One Kings Lane. Prior to this he spent 7 years at eBay where he served in a range of executive roles, having already worked in private equity and investment banking.
 
Ewert, who has been with Tailored Brands for 23 years, 11 of as CEO, has agreed to stay on at the company in an advisory capacity until the end of the year.
 
Tailored Brands is maintaining its full-year outlook for fiscal 2018, predicting adjusted diluted earnings per share of between $2.35 and $2.50.