Knowing The Pain Points: GE Vernova's Recipe for Profitability

We are not asking that management flag weakening gross margins or higher promotional costs or brutal competition that is causing them to lose share and miss numbers. But I think it is perfectly reasonable for a company's management to acknowledge and, indeed, shine a light on what went wrong or is going wrong when management knows that something's not up to snuff. That's right, I am not demanding a qualitative mea culpa and a begging for mercy. However, I do think that a simple acknowledgement in the text of the release and the conference call that something's wrong, and it can't be ignored, is not too much to ask.

Yet for some companies, sadly, it must be demanding too much because their relentless happy talk in the face of what they have to know is a disappointing set of facts, is, if anything, doubly disturbing. That's what I thought about after last night's entirely disappointing Tailored Brands (TLRD) quarterly conference call, the amalgam that is, among other brands, Men's Wearhouse and Jos. A. Bank. And it's what I thought about that Tuesday night, on that horrendous, tortured H&R Block (HRB) call after it tried to put a positive spin on what is at best a very uncertain future.

I know there was a lot of skepticism when Men's Wearhouse bought Jos. A. Bank back in March of 2014. Men's Wearhouse paid $1.8 billion for the rival, which was widely perceived as vastly too high a price for the prospect. Given that the combined company now has a market cap several hundred million dollars below that price, it seems like an ill-advised trade, especially given that the acquirer had about a $2.2 billion capitalization at the time of the deal.

However, if you go back in time, to when Tailored Brands stock traded down to $664 million in 2016, it's not all that bad. Even better, this stock has gone from being a real loser to a real winner having traveled from $9 last year this week to $33 as of last night. That's almost a four-bagger.