The Men’s Wearhouse, Inc. (NYSE:MW) may be the first company to successfully convince investors that poor performance just comes down to bad luck. CEO Doug Ewert told investors at a conference call that ‘numerical anomalies’ have a tangible impact on the number of people who get married, and that women avoiding marriage for an entire year (yes, he laid the blame on the brides) had put pressure on revenues, reports Steven Russolillo for The Wall Street Journal.
Men’s Wearhouse negative result
“We are aware of widespread negative results, impacting the wedding industry this year. We believe this is mostly a timing shift. Historically, we’ve seen numeric anomalies in the calendar effect when brides choose their wedding date, and we believe that the number 13 in 2013 is causing a small, but meaningful number of brides to avoid getting married this year,” said Ewert. “It’s reassuring to see a significant increase in advance reservation for 2014 wedding though.”
It’s easy to laugh at such an idea (unless you’re trying to convince your partner it’s time to get hitched), but for a decision as subjective as choosing a wedding date, it seems reasonable that personal beliefs would come into play. And since superstition is inherently irrational, trying to predict exactly how it will impact business is a non-starter.
Drop in stock prices
Investors weren’t impressed by Ewert’s explanation and The Men’s Wearhouse, Inc. (NYSE:MW)’s stock price dropped 10 percent following the conference call. Even if 2013 has had some small effect on weddings, that doesn’t mean Men’s Wearhouse doesn’t have other weaknesses that will continue after the calendar rolls over, and if the company really was expecting a dip it should have let people know beforehand, not after the fact.
But traders who believe Ewert’s explanation actually have a great opportunity. If some people (no reason to put all the blame on brides) are pushing their weddings back a year because of the number 13, and 2014 is a return to trend (or even better as the economy improves), movement from artificially depressed performance to strong potential growth is a great value opportunity. Unless you’re worried that making new investments in 2013 will bring your portfolio seven years of bad luck.
