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Men's Wearhouse reports first-quarter earnings that top expectations

Posted Jun 9th 2009 9:31AM by Mark Fightmaster (RSS feed)
Filed under: Earnings reports

Men's Wearhouse (NYSE: MW) reported first-quarter results after the close Monday. Earnings dropped 47% compared to a year ago. Although earnings contracted due to fewer customers, cost-cutting measures helped the company top the consensus estimate and forecast solid second-quarter earnings.

First-quarter earnings checked in at 10 cents per share for the quarter, down from 19 cents per share a year ago but far better than the Street's forecast loss of a penny per share. Quarterly sales dropped 6% to $464.1 million from $491.1 million a year ago, as clothing product sales dropped 7.6%. Nevertheless, sales topped the consensus estimate of $459.3 million.

Continue reading Men's Wearhouse reports first-quarter earnings that top expectations

Time Warner: 1 plus 1 = 1

Posted May 3rd 2006 3:29PM by Peter Cohan (RSS feed)
Filed under: Rants and raves, Competitive strategy, Time Warner (TWX)

Today's Time Warner earnings announcement shows the disappointment that results when shareholders expect a corporate strategy and instead get a conglomerate. With TWX down 1.72% in the earnings announcement's wake, the Chinese water torture continues.  How so?

When a corporate strategy is well-conceived and well-executed, there is a strong economic reason for businesses to be under the same corporate umbrella. Simply put, corporate strategy is about creating value by sharing important capabilities across business units. For example, Wal-Mart gets big volume discounts by purchasing in big quantities from its suppliers. Wal-Mart is also good at measuring what items sell in its stores and which ones don't and stocking the shelves of each store accordingly. Wal-Mart's sustained financial excellence results from its ability to share these capabilities across its discount retailing, grocery, and pharmacy businesses. This sharing gives Wal-Mart a sustainable competitive advantage, keeping its costs below its competitors.

By contrast, a conglomerate holds a diverse collection of businesses among which there is very little sharing. The ostensible reason for the businesses being under the same corporate umbrella is that the different businesses can predictably offset each other's earnings cycles. When one business is down, another one is up and vice versa. The net effect is to smooth earnings.

Continue reading Time Warner: 1 plus 1 = 1

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Last updated: November 28, 2009: 07:14 AM

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