Why Men's Wearhouse Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of men's clothing retailer Men's Wearhouse (NYSE: MW  ) were looking out of fashion today as investors undressed shares as much as 19% in intraday trading after the company reported first-quarter results.

So what: You don't have to look far to figure out why investors are so upset with the quarterly report. For the first time in over two years, the company's per-share profit fell short of analysts' estimates, clocking in at $0.52 versus the $0.55 expectation. Even worse, the company's outlook was softer than expected, as it said second-quarter earnings per share will likely be between $1.12 and $1.13 rather than the $1.22 that Wall Street was hoping for.

Now what: The company placed the blame for the lackluster quarterly performance and the upcoming quarter's soft guidance in part on slower corporate uniform sales in the U.K. as compared to 2011. It expects that part of its business will look better in the back half of the year.

It really wasn't a great quarter for Men's Wearhouse overall as sales grew a sluggish 1.1% and earnings dropped 3.5% from a year ago. However, the company is still projecting 13%-17% full-year growth in EPS -- to between $2.70 and $2.78 -- and the stock is currently trading at around 10.5 times the midpoint of that forecast. With that in mind, this may be a stock to at least have on your radar.

Want to keep up to date on Men's Wearhouse? Add it to your watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1906352, ~/Articles/ArticleHandler.aspx, 9/2/2014 6:18:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement