Men's Wearhouse Inc.

Don't count out the retailers just yet. Men's Wearhouse Inc. (MW - Snapshot Report) still expects double digit sales growth in 2011. This Zacks #1 Rank (strong buy) is a value stock with a forward P/E of 12.9.

Men's Wearhouse is a men's apparel specialty retailer. It operates 1,178 stores under three brands: Men's Wearhouse, Moores and K&G.

The company carries brand name and private label suits, sport coats, and accessories. Tuxedo rentals are also available at some of the stores.

Men's Wearhouse also operates a global corporate apparel and workwear segment which includes TwinHill in the United States and Dimensions and Alexandra in the United Kingdom.

Men's Wearhouse Does It Again the Second Quarter

On Sep 7, Men's Wearhouse reported its fiscal second quarter 2011 results and surprised on the Zacks Consensus by 6.7%. Earnings per share were $1.11 compared with the consensus of $1.04. The company made just 83 cents in the year ago period.

It continued the company's impressive earnings surprise streak now at 9 consecutive quarters.

Net sales jumped 22.1% to $655.5 million from $537 million last year and were up in all 3 segments. Sales at Men's Wearhouse, the company's largest segment, climbed 10.8% to $407 million from $367.4 million. Sales at K&G rose 5.7% and 12.3% at Moores Canada.

Comparable store sales also showed increases of 10.9% at Men's Wearhouse, 5.4% at K&G and 4.4% at Moores Canada due mainly to higher clothing sales.

The increases at Men's Wearhouse were due to increases in average units sold per transaction and increased store traffic levels offsetting decreases in average unit retails. The tuxedo rental service also continued to be strong with a 6.2% gain in same store sales.

Fiscal 2011 Guidance Predicts Double Digit Sales Growth

Men's Wearhouse reported on Sep 7 so this is recent guidance. The company has already experienced the chaos of August. Yet, it still expects double digit sales growth for the fiscal year.

Total sales are expected to increase between 12.5% and 13.5%. Men's Wearhouse is expected to see same store sales growth of 7% to 8%. K&G is forecast to see 4% to 5% and Moores should see between 2% and 3%.

Earnings per share are forecast in the range of $2.13 to $2.20.

Analysts Raise Full Year Estimates

With yet another earnings surprise and guidance that was more bullish than expected, the analysts have been busy raising full year estimates.

Since the report, 6 analysts have revised their 2011 estimate higher which has pushed the Zacks Consensus up 9 cents to $2.20 per share. That is at the upper end of the company's range.

It is also earnings growth of 45.7%.

Valuations Look Solid

Like most other stocks, Men's Wearhouse has pulled back in the recent stock sell off. However, it's still well above its 3 year low.

But the pullback has created an attractive entry point.

Not only are estimates rising but valuations are cheap.

In addition to a P/E under 15, Men's Wearhouse has a price-to-book of 1.4. This is well under the 3.0 level that is usually used as a cut off for value stocks.

The company also has a P/S ratio of just 0.6. A P/S under 1.0 usually indicates a company is undervalued.

The consumer is still holding on which makes a value stock like Men's Wearhouse an intriguing play on the U.S. recovery.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at twitter.com/traceyryniec.

Read the full analyst report on MW