Tailored Brands, Inc. (NYSE:TLRD) Q3 2018 Earnings Conference Call Transcript
Dec 12, 2018 • 05:00 pm ET
Greetings, and welcome to Tailored Brands' Third Quarter 2018 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Julie MacMedan, VP of IR. Thank you. You may begin.
Thank you, and good afternoon, everyone. Welcome to Tailored Brands third quarter 2018 results conference call. This call is being webcast and a replay will be available on the company's Investor Relations website, ir.tailoredbrands.com.
(Forward-Looking Cautionary Statements)
Throughout this conference call, management will be discussing results on an adjusted basis. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures and our explanation of why the non-GAAP financial measures may be useful are discussed in today's earnings release.
With me today are our Executive Chairman, Dinesh Lathi; and our CFO, Jack Calandra.
I would now like to turn the call over to Dinesh.
Thank you, Julie; and good afternoon, everyone. It is my pleasure to announce our strong third quarter results. We reported 2.3% comp growth with all brands positive and we delivered adjusted EPS of $1.01, driven by gross margin expansion and SG&A leverage.
While, we were pleased with our third quarter performance, as the quarter progressed we saw deceleration of comp sales at our largest brand Men's Wearhouse due to lower transactions, and this trend continued into November. While we are taking steps to turn the business around, based on what we are seeing in the business as of today, we have adjusted our full year adjusted EPS guidance range to $2.30 to $2.35 to reflect our lower comp expectations for Men's Wearhouse. We are maintaining our comp outlook for our other retail brands.
While we are seeing some softness at Men's Wearhouse in Q4, we believe the growth strategies that have fueled four consecutive quarters of positive comps at this brand will continue to drive future growth.
Before I review the Q3 trends and Q4 outlook in more detail, I'll discuss our strategic initiatives that are foundational to our long-term success. As a reminder, our three strategic initiatives are two: one, grow the custom business to meet our customer's desire for a personalized look; two, build awareness and elevate the way people think about our brands; and, three, deliver a seamless omni experience that makes shopping easier for our customers.
First, I'd like to talk about our custom business. Consumers are increasingly seeking a more personalized look and fit, and we believe they see a custom suit as a great way to achieve that. Our goal is to make buying a custom suit accessible for anyone who is in the market for a suit. We believe we have a sustainable competitive advantage in meeting our customer's needs with custom, given our expansive store footprint, highly trained wardrobe consultants, and our at-scale supply chain.
For the third quarter of 2018, custom sales averaged