NEW YORK (TheStreet) -- Shares of Men's Wearhouse (MW) and Jos. A. Bank Clothiers (JOSB) popped after news that a buyout deal is not off the table. Eminence Capital, Men's Wearhouse's largest shareholder, confirmed the retailer's CEO Doug Ewert has not ruled out a merger with Jos. A. Bank Clothiers.
Sharse of Jos. A. Bank had gained 3.4% to $50.19, while Men's Wearhouse was up 3.4% to $47.52.
Sweetening the deal is the former's better-than-expected earnings guidance released on Tuesday. For the third quarter ended Nov. 2, Jos. A. Bank said it expects profit to fall between 49 cents and 51 cents a share, a 4% to 9% gain on earnings in the year-ago quarter. Analysts surveyed by Thomson Reuters had expected earnings of 43 cents a share, down 10% from the year-earlier quarter.
The men's clothing retailer expects sales growth in the mid-single digits, compared to analysts' projections of 1% growth. The company's resilience makes it an outlier, as the greater retail industry is challenged by soft consumer discretionary spending.
"Our projected performance in the third quarter, which was somewhat affected by the government shutdown, marks a continuation of the positive trends we had seen at the end of the second quarter," said CEO R. Neal Black in a statement. "We are highly focused on continuing to improve our sales trend. We feel confident that the strategies we have in place will enable us to show continued improvement and to further strengthen our brand and best position it for the future."