Back to top

Analyst Blog

The board of directors of menswear retailer The Men's Wearhouse Inc (MW - Snapshot Report) has abruptly terminated the company’s founder and executive chairman George Zimmer. The company issued a statement, which cited no reason for the termination. The company also postponed its annual meeting of shareholders, which was scheduled on Jun 19.

Zimmer was the face of Men’s Wearhouse and appeared in many TV commercials. He had been instrumental in Men's Wearhouse’s growth from one small store in Texas to one of North America's largest men's clothing retailer with 1,143 locations.

It is being speculated that Men’s Wearhouse was looking for a new face to attract youth. Zimmer’s termination could also be due to his constant disagreements with the board over company matters. According to Zimmer’s statements, he remained concerned about the company’s operations. However, the company was performing quite well. In fact, the company has outperformed Zacks Consensus Estimate in the last seven out of ten quarters, delivering a positive surprise of 7.3%. The actual reason for his termination still remains a mystery.

In the recently concluded first quarter fiscal 2013 reported on Jun 12, Men's Wearhouse delivered solid earnings growth of 25% from the prior-year quarter, driven by a shift in the tuxedo season from the second quarter due to an early Easter. Revenues beat the Zacks Revenue Estimate and crept up 5.1% owing to strong tuxedo revenues. The early Easter pushed up the rental rates and sales of tuxedo accessories.

Men’s Wearhouse reaffirmed its earnings per share expectation for fiscal 2013 in the range of $2.70 to $2.80.  However, the company expects weak comparable store sales growth as a result of a continued decrease in average transactions per store.

Men’s Wearhouse holds a Zacks Rank #4 (Sell). Stocks in the apparel industry that are performing well and are therefore worth considering include Gap Inc (GPS - Analyst Report), The Children Retail Stores Inc (PLCE - Snapshot Report) and Lululemon Athletica Inc (LULU - Analyst Report), all of them holding a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%