Investing.com -- Shares in Men's Wearhouse Inc (N:MW) tumbled more than 15% in after-hours trading after the men's dress clothing chain posted considerable losses over the third quarter stemming from weak sales at its Jos A. Bank retailer and a $90 million tradename impairment charge.
During the company's third quarter, which ended in late-October, Men's Wearhouse reported a GAAP loss of $27.1 million or minus 0.56 per share, down from a gain of $6.8 million or 0.14 per share over the same period in 2014. Men's Wearhouse also reported non-GAAP adjusted earnings of 0.50 per diluted share.
Over the period, the company said it performed an interim valuation of the Jos A. Bank tradename, which resulted in a $90.1 million non-cash impairment charge. In October, Jos A. Bank abandoned its famous "Buy One, Get 3 Free," suit sale, amid sinking sales. Men's Wearhouse acquired the retailer in 2014 for an estimated $1.8 billion.
Jos A. Bank's comparative store sales decreased by 14.6% for the quarter, far below the company's expectations. Through the first week of December, Jos A. Bank's comparative store sales have slumped by 35.5% for the fourth quarter. By comparison, same-store sales at the company's other brands are up 5.5% on the period.
"When we acquired Joseph Bank, we knew that we needed to correct the promotional model. However, we underestimated the impact to the near-term performance as we began to execute the difficult, but necessary, corrective steps," Men's Warehouse CEO Doug Ewert said in a statement. "We remain confident that these steps will restore a long-term, sustainable, profit model and reshape the business for a healthy and growing Jos. A. Bank."
Overall, Men's Wearhouse revenues fell by 2.8% to $865.4 million for the quarter, due primarily to weaker in-store traffic. Analysts expected the company to finish with revenues of $877 million on earnings of 0.50 per share.
Shares in Men's Wearhouse plunged 3.29 or 17.75% to 18.53 in after-hours trading.