The Men’s Wearhouse (NYSE:MW) tumbled more than 9% after hours despite reporting stronger-than-expected third-quarter revenue, as heavy acquisition-related costs weighed down its profit, and the company revealed a bleak forecast.
The Houston-based company post net earnings of $25.3 million, or 47 cents a share, compared with $19.3 million, or 36 cents a share, in the same quarter last year.
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Excluding onetime costs related to acquisition-related expenses, the retail chain earned 57 cents, ahead of average analyst estimates polled by Thomson Reuters of 47 cents.
In August, Men’s Wearhouse acquired Dimensions and certain assets of Alexandra, two leading suppliers of corporate clothing uniforms in the United Kingdom, for $97.8 million.
Revenue for the men’s suit retailer was $550.1 million, up about 19% from $462 million a year ago, beating the Street’s view of $519.95.
Sales were fueled by strong growth in its retail segment, particularly in Men Warehouse and Moores Canada stores, helped further by a whopping 1,400% jump in corporate apparel revenue due to its acquisitions.
For the current quarter, the retailer sees GAAP earnings in the range of 22 cents to 25 cents a share with revenue growing in the high teens to low twenties percentage range.
Earnings would be lower on an expected acquisition-related charge of $1.7 million.