Men's clothing retailer Casual Male Retail Group (NASDAQ:CMRG) will report third-quarter results Thursday before the market opens, and the Fool thinks you should try this forecast on for size.

What analysts say:

  • Buy, sell, or waffle? Seven analysts have pulled the threads together on Casual Male, and generally, they find the company worthy of an investment: Two say it's a strong buy, three say buy, and two say hold.

  • Revenues. On average, the analysts are looking for the big-and-tall men's retailer to come in with sales about 13% above last year's results, $106 million vs. $93.8 million.

  • Earnings. They also expect the clothier to basically break even, reporting earnings of $0.01 per share -- a small profit, to be sure, but better than the $0.05-per-share loss it recorded in the same period a year earlier.

What management says:
Same-store sales is an important metric for retail, and the company reported at the start of the month that they were up 13% for the quarter, while revenues would be up 14% from last year. That's just about what the analysts were forecasting, so the actual release shouldn't hold too many surprises. As the company has been rebranding its image, going from the tired but familiar yellow-and-gold to a more modern and urban blue and orange, it has also been cutting back on its promotional activity. The positive PR spin it got from its transformation to Casual Male XL was enough to generate more foot traffic.

What management does:
Margins at Casual Male, at least on the operating and net lines, are anything but XL, though they continue to improve. The company has been able to keep gross margins growing by offering fewer markdowns, while also buying straight from the factory to get its product. That has saved money upfront and allowed it to improve profit margins later on.

Margins % 07/05 10/05 01/06 04/06 07/06

Gross

 42.1 42.2 43.2 43.8 44.3
Op. 3.3 3.2 4.0 4.5 5.0
Net 1.7 1.3 2.6 3.3 3.5
All data courtesy of CapitalIQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Coming out of bankruptcy in 2002, Casual Male was looking for a way to shed its struggling Dockers and Levi's outlet stores. It jumped with two large feet into the big-and-tall segment, acquiring Rochester Big & Tall in the process. It recently added Jared M. to its list, as it continues to expand the concept of selling to large guys who want to look like everyone else. To do so, it has continued to evolve and remake itself. Now it's no longer Casual Male Big & Tall, but Casual Male XL, with new colors and a new logo.

Private-label clothes, including a line by former heavyweight boxing champ George Foreman, are another big hit, and should end up being about 70% of this retailer's clothing line by the end of the year. The company has also targeted a younger crowd with its 626 Blue, which should appeal to consumers too large to shop at Abercrombie & Fitch (NYSE:ANF) or American Eagle Outfitters (NASDAQ:AEOS).

Gone are the concerns of this once-bankrupt men's retailer. It has a hip new urban feel, a line of private-label clothes that cater to a niche market overlooked by most other clothing stores, and a management team committed to keeping the company on the growth path. This looks like a nicely tailored retail operation.

Competitors:

  • Men's Warehouse (NYSE:MW)
  • Jos. A Bank (NASDAQ:JOSB)
  • J.C. Penney's (NYSE:JCP)
  • Federated (NYSE:FD)

Related Foolishness:

American Eagle Outfitters is a recommendation of Motley Fool Stock Advisor.

Fool contributor Rich Duprey owns shares of Casual Male, but does not own any of the other stocks appearing in this article. The Fool's disclosure policy is nicely tailored.