Here's How Tailored Brands (TLRD) Looks Ahead Of Q3 Earnings

Tailored Brands, Inc. (NYSE:TLRD) is slated to release third-quarter fiscal 2019 results on Dec 11.

Notably, the company’s earnings outpaced the Zacks Consensus Estimate by 10.8% in the preceding quarter. Moreover, the bottom line surpassed the consensus estimate by 16.2%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for earnings in the fiscal third quarter is pegged at 43 cents, suggesting a decline of more than 57% from $1.01 reported in the year-ago quarter. Notably, the consensus mark has been stable in the past 30 days. For the fiscal third quarter, the company guided adjusted earnings in the band of 40-45 cents.

The Zacks Consensus Estimate for sales stands at $716 million, indicating a decrease of 11.9% from the year-earlier reported figure.

Key Factors to Note

We note that the company has been witnessing strained margins due to lower retail clothing gross margin, increased promotional activity and deleveraged occupancy costs. Also, the company’s soft retail business on account of a challenging retail landscape persists as a deterrent. In fact, it has been enduring weak comparable sales (comps), thanks to lesser transactions coupled with a fall in both average unit retail and units per transaction.

During second-quarter fiscal 2019 conference call, management issued a bleak guidance for the fiscal third quarter. Tailored Brands projected comps decline of 3-5% at Men’s Wearhouse, 4-6% at Moores and 2-4% at Jos. A. Bank and K&G each.

Nevertheless, Tailored Brands has been undertaking transformation efforts enriching customer experience and delivering personalized products and services. With respect to personalization, the company has been focusing on custom clothing and merchandising initiatives. Notably, its custom business, aided by constant innovations, continues to grow in double-digit rates. Furthermore, the company has been enhancing its e-commerce channel and digital platforms to deliver a seamless omni-channel experience.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Tailored Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Tailored Brands carries a Zacks Rank #2, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies worth considering with the right combination of elements to beat on earnings:

lululemon athletica inc. (NASDAQ:LULU) currently has an Earnings ESP of +1.32% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Mills, Inc. (NYSE:GIS) has an Earnings ESP of +1.58% and a Zacks Rank #3.

AutoZone, Inc. (NYSE:AZO) has an Earnings ESP of +0.80% and a Zacks Rank of 3.

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