The company is selling its corporate apparel business for $62 million
Suit maker Tailored Brands Inc (NYSE:TLRD) announced today that it would be selling its corporate apparel business to a group led by the firm's U.K. executive team, in a $62 million deal. The company said some of these funds would go to debt reduction, and hiked its current-quarter earnings forecast. TLRD stock is up 7.5% at $5.44.
This pop in the shares comes just two sessions after hitting an all-time low of $4.23 on Aug. 15. In fact, TLRD has taken quite a beating on the charts, suffering multiple bear gaps over the past year and succumbing to downward pressure at its 50-day moving average. Today, the equity is attempting to topple this trendline for the first time since March.
Today's news is overshadowing B. Riley FBR's price target cut to $5 from $7, which stands at a slight discount to current levels. Despite this, the consensus 12-month price target of $7.97 still represents a roughly 57% premium to TLRD's current perch. On the other hand, only two brokerage firms follow the retail stock, both sitting on "hold" opinions.
TLRD's long-term downtrend, unsurprisingly, has short sellers paying attention. In the last two reporting periods, short interest rose 7.3%. The 20.34 million shares sold short now represent an eyebrow-raising 41.6% of the stock's available float. Plus, it would take over eight days to buy back these bearish bets, at the stock's average pace of trading.