What happened

Shares of Tailored Brands (TLRD) fell more than 24% on Thursday morning after the men's apparel retailer slashed guidance and suspended its dividend. Investors knew the company, owner of the Men's Wearhouse and JoS. A. Bank chains, had problems, but appear to have underestimated how deep those problems go.

So what

After markets closed Wednesday, Tailored Brands actually reported fiscal second-quarter adjusted earnings that, at $0.82 per share, came in ahead of the consensus estimate. Comparable sales fell at all the company's brands, and results were also affected by the impact of a weaker British pound compared to a year ago.

A man in a business suit.

Image source: Getty Images.

While the quarter was fine, the outlook was grim. Tailored Brands forecasted third-quarter adjusted earnings of between $0.40 and $0.45 per share, well below the $0.88 estimate, and said it would suspend its cash dividend in favor of redeploying that capital for accelerated debt repayment and share repurchases.

CEO Dinesh Lathi said in a statement that Tailored Brands still believes in its plan to revamp operations and rejuvenate the store experience, but admitted the transformation won't happen overnight.

"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," Lathi said.

Now what

At this point shareholders seem to be worried that the transformation plan will be too little too late. Shares of Tailored Brands are now down more than 60% for the year. The company is fighting a broader downturn in retail that has hammered a long list of consumer discretionary stocks, and also faces industry-specific challenges such as the trend toward business casual in the workplace.

There was some interest in the shares last month after a report surfaced that Tailored Brands had been approached by a private equity firm about a potential acquisition. Given the size of the challenge ahead of it, one could argue Tailored Brands might benefit from being freed from the scrutiny given to quarter-by-quarter results, but investors should be warned that if there is any buyer interest, it will likely not be at a substantial premium.

There isn't much reason to go bargain shopping at Tailored Brands today.