Men's Wearhouse (NYSE: MW) reported declining net income during the third quarter of fiscal 2013 even as net sales improved in the midst of an ongoing merger with rival Jos. A. Bank (Nasdaq: JOSB).
Net income for the quarter ending Nov. 2 dropped 22 percent to $38.2 million, or 79 cents a share, from $48.8 million, or 95 cents, a year earlier. While income faltered, sales in the quarter rose 2.8 percent to $648.9 million, surpassing the $627.4 million average of analysts' estimates.
Same-store sales for Men's Wearhouse rose a healthy 2.6 percent. The company said that higher margin tuxedo rental revenues also rose 0.8 percent in the quarter. On the dim side, the company reported higher employee-related expenses which contributed to the decline in net income.
"We are very pleased to report our 2.6 percent same-store sales increase during the third quarter in our Men's Wearhouse brand, which represents two-thirds of our consolidated sales," said Doug Ewert, president and CEO of Men's Wearhouse.
Ewert also shed some light on where the merger with Jos. A. Bank stands. In late November, Men's Wearhouse Inc. offered to buy Jos. A. Bank Clothiers Inc. for $1.5 billion only weeks after rejecting an acquisition offer from its smaller competitor.
"We are very pleased with the early progress in integrating our newly acquired American designer brand, Joseph Abboud, and its U.S. manufacturing operations. We already have several large markets with Joseph Abboud product in place and will continue to execute on our planned rollout to all stores into the summer of 2014," said Ewert.
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