Men’s Wearhouse, Inc. (MW) continues to trade strong in the volatile market, recently hitting a new 52-week high after on a solid 8% Q1 earnings surprise. With estimates jumping on the good quarter and a bullish growth projection, this Zacks #1 rank stock is well suited for momentum.
Company Description
Men’s Wearhouse, Inc. operates as a specialty retailer of mens suits in the United States and Canada. The company was founded in 1974 and has a market cap of $1.7 billion.
With consumers still searching for value as high unemployment continues to plague the Street, Men’s Waearhouse has been able to capitalize on the trend, That dynamic showed up in early June
First-Quarter Comes in Strong
Revenue for the period was up 22.6% from last year to $580 million. Earnings also came in strong at 53 cents, 8% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 11% over the last four quarters.
The good quarter was driven by strong same-store sales from its largest segment, Men’s Wearhouse, up 10.8% from last year to $355 million.
Buying Shares Back
The company was also busy returning value to its shareholders during the quarter, buying back 1.8 million shares for $49 million.
Financial Profile
On the financial front, Men’s Wearhouse has an awesome balance sheet, with cash and short-term investments of $146 million and no long-term debt.
Estimates
We saw some pretty bullish movement in estimates off the good quarter, with the current year adding 30 cents to $2.11 while the next-year estimate gained 31 cents to $2.39, a solid 13.5% growth projection.
Valuation
But in spite of the gains, MW still looks reasonably priced, trading with a forward P/E multiple of 15X, only a slight premium to its peer average of 14X.
12-Month Chart
On the chart, MW remains in elevated territory after hitting a new multi-year high in late May. Look for support from the trend on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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