Shares of Men's Wearhouse are ticking higher after the clothier overcame a sluggish performance from its tuxedo business in the third quarter to top profit and revenue expectations on Wall Street.
Net income fell 22 percent, largely on costs related to the acquisition for more than $97 million of JA Holdings Inc., the parent company of the brand Joseph Abboud.
The company earned $38.2 million, or 79 cents per share, in the three-month period that ended Nov. 2. That compares with $48.8 million, or 95 cents per share, in last year's quarter.
This year's third quarter included $9.7 million in costs related to the all-cash Abboud deal.
Stripping away those one-time costs, the retailer earned 90 cents per share, which was 4 cents better than Wall Street had expected, according to a poll by FactSet.
Revenue rose 3 percent to $648.9 million, breezing past the $627.1 million that analysts had projected.
The total gross margin rate did slide 84 basis points, largely due to an expected decline in tuxedo margins. The company cited lower rental revenue and higher per unit rental costs and royalty payments.
It has been a hectic year for the Houston company.
In June, Men's Wearhouse ousted its founder and chairman, George Zimmer following a dispute over the direction of the company.
It was a high-profile spat.
Zimmer, who opened his first Men's Wearhouse store 1973, became the face of the company through advertisements in which he promised, "You're going to like the way you look. I guarantee it."
Two months later, the retailer completed its acquisition of JA Holdings.
Men's Wearhouse is now embroiled in a bid and counter-bid battle with Jos. A. Bank.
It rejected a buyout offer from its smaller rival last month, and two weeks ago it counterpunched with its own bid for Jos. A Bank, worth about $1.54 billion.
Jos. A Bank said that it would evaluate the offer.
Shares rose more than 2 percent before the opening bell to $51.62 and have climbed 62 percent so far this year.