Men’s Wearhouse (NYSE:MW) shares plunged 8.4% Thursday morning, after the clothing retailer slashed its full-year outlook and reported a significant decline in its second-quarter earnings.
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After Wednesday’s closing bell, the company said its profit in the latest period fell 28% to miss Wall Street expectations.
The Fremont, Calif.-based retailer also slashed its full-year guidance on macroeconomic concerns. It now expects adjusted per-share earnings of $2.40 to $2.50, a 30-cent cut.
“Retail clothing sales during the second quarter were below our internal plan as we experienced a decline in customer traffic compared to last year's second quarter,” Chief Executive Doug Ewert said in a statement. “We believe this is primarily due to macro issues affecting the apparel retailing space.”
Men’s Wearhouse, which operates its namesake stores in addition to Moore’s and K&G, made headlines in June when it abruptly fired co-founder and Chairman George Zimmer, the longtime face of the company’s advertisements.
The move came amid disagreements between Zimmer and the board over the direction of the company. Zimmer accused the board and Men’s Wearhouse management of failing to act in shareholders’ interests by refusing to consider strategic alternatives, such as a take-private deal.
Since Zimmer’s departure, Men’s Wearhouse has launched an accelerated buyback program and bought JA Holding, the parent of clothing brand Joseph Abboud, for $97.5 million.
For the second quarter, the company saw its profit decline to $42.9 million, or 85 cents a share, from $59.4 million, or $1.15 a share, in the year-ago period. Adjusted per-share earnings checked in at $1.01, well below estimates for $1.14.
Revenue dropped 2.3% to $647.3 million, missing calls for $670 million.
Shares were down $3.26 at $35.51 in recent trading, recovering slightly from steeper losses earlier Thursday morning. Through Wednesday’s close, the stock had climbed 24% so far this year.