Men’s Wearhouse Shares Rally as Company Seeks Strategic Alternatives for K&G Operations (MW)

Although the Men’s Wearhouse Inc.’s (NYSE: MW) fiscal fourth-quarter results fell short of Street’s estimates due to “challenging macroeconomic environment”; shares rallied in afterhours trading on Wednesday after the specialty men’s suit maker said that it has hired Jefferies & Co. to help evaluating strategic alternatives for its K&G operations. The Company is inclined focusing more on its Men’s Wearhouse and Moores clothing retailing.

However, losses contracted in the fourth quarter year-on-year, aided by strong revenue growth and cost control measures.

Men’s Wearhouse also announced that its board has approved a new $200 million worth shares repurchase program, extending its existing shares buyback authorization. The Company had earlier announced $45 million shares buyback program.

For the fiscal fourth quarter ended February 2, Men’s Wearhouse reported a net loss of $3.4 million or 7 cents a share, compared to a net loss of $3.8 million or 7 cents a share, in the same quarter of last year. In the same quarter of last fiscal, the company took a charge of 2 cents a share related to acquisition integration costs and less than penny charge linked to an asset impairment.

Analysts polled by Thomson Reuters were expecting a loss of 5 cents a share.

Sales during the period climbed 8.2% to $608.43 million from $562.17 million, in the same quarter of last year, but falling short of analysts’ consensus forecast for revenue of $610 million.

The results also missed Company’s own earlier guidance. The Company forecasted a loss of 5 cents to earnings of penny a share on revenue growth of 9.5% to 10.5%.

“The balance of the fourth quarter improved over November results; however, macro-economic conditions remained challenging for our customers throughout the period, which resulted in fourth quarter and full year results that were two cents below the low end of our guidance range provided on December 5, 2012” said Doug Ewert, Men’s Wearhouse president and chief executive officer to analysts and investors in earnings call.