Men’s Wearhouse Inc. (MW) shares plunged more than 20% this morning after the company’s miserable third-quarter earnings report.
According to management, same-store sales at the company’s Jos. A. Bank unit fell a staggering 14.6% over a year ago. Apparently shoppers didn’t appreciate the fact that Men’s Wearhouse did away with the sales and promotions that Jos. A. Banks was previously famous for. While same-store sales rose 5.3% at Men’s Wearhouse, this wasn’t enough to make up the difference.
Overall, Men’s Wearhouse reported a loss of $27.1 million, or a loss of $0.56 per share. This was a big upset, considering that Men’s Wearhouse had reported a profit of $6.8 million this quarter last year.
To avoid the next Men’s Wearhouse, I suggest running each of your holdings through Portfolio Grader. This stock grading tool runs the stock through number of screens and provides a Fundamental Grade, Quantitative Grade and Total Grade. I designed Portfolio Grader to make it very clear whether or not any particular stock is worth buying right now. You may click here to read all about the proprietary stock grading formula that powers Portfolio Grader.
When we look at Men’s Wearhouse in Portfolio Grader, it confirms that we want to sell. The Fundamental Grade is a C, which is mediocre, but the Quantitative Grade is an F, which shows that the buying pressure for the stock is all but nonexistent. These ratings combine for a Total Grade of a D–an outright sell. In fact, Portfolio Grader tells us that MW has been a sell since October, which could’ve helped us to get out long before today’s sharp decline.
This tool has helped me avoid countless headaches, and I encourage it to use it to your full advantage. Whatever way you decide to use it, Portfolio Grader can help you avoid downward-trending stocks like MW.