Tailored Brands shares plummeted as much as 27% after hours after it posted lousy fourth quarter results. Men’s Wearhouse sales were down 3.7%.
“Unfortunately, the challenging retail environment resulted in soft traffic across our retail brands,” CEO Doug Ewert said in a statement.
Like most brick-and-mortar retailers, Tailored Brands has been hit by online shopping and declining foot traffic at malls. The rise of casualwear also poses a challenge.
The company shuttered 233 stores in the past year.
The Jos. A. Bank brand, which Men’s Wearhouse bought in 2014, remained a drag. Sales at those stores were down 4.7% last quarter. They’ve taken a hit ever since it dropped its Buy-One-Get-Three suit sale.
A 2015 deal with Macy’s to rent tuxedos out of its department stores was also a bust. The agreement cost Tailored Brands $ 14 million in 2016, and the company anticipates losses could jump to $ 20 million next year.
“During 2016, our Macy’s tuxedo business did not ramp as expected,” Ewert said. “We are actively engaged in discussions with Macy’s to restructure our agreement.”
The company said it expects Men’s Wearhouse sales will continue to drop in 2017, though it’s hoping to turn around Jos. A. Bank.