Men's Wearhouse Inc posted an increase of its earnings for the fiscal third quarter, beating analysts' estimates as its sales rose, Bloomberg reported. Men's Wearhouse earlier rejected the takeover offer of Jos A Bank Clothiers and turned the tables on the latter with its own buyout offer.

Bloomberg data showed that earnings of the Houston-based firm on an adjusted basis were $0.90 per share, which is above the average analyst estimate of only $0.86 per share. Sales for the quarter increased 2.8% to $648.9 million. On the average, analysts had projected sales of only $627.4 million. Net income for the quarter dropped to $38.2 million compared to $48.8 million from the previous year.

The report said Men's Wearhouse offered to buy out its smaller competitor Jos. A. Bank last month for $1.54 billion. Jos. A. Bank said it is still reviewing the offer. Men's Wearhouse had rejected a previous offer from its smaller rival on the grounds that it was too low and opportunistic. The offer came at a challenging time for Men's Wearhouse since it had just removed Founder George Zimmer as the Executive Chairman in June due to a disagreement over company strategy, the report said.

In a note to clients given last week, Stifel Nicolaus & Co Analyst Richard Jaffe said, "Longer term, we believe Men's Wearhouse's more focused marketing and promotional efforts, coupled with a better product assortment will fuel sales growth." Jaffe has given a hold rating on the shares.

Men's Wearhouse heeded the advice of Eminence Capital, its largest shareholder, to grow its clothing stores for men, the report said. The agreement would form a company with around 1,700 stores. It would also add to the earnings of Men's Wearhouse in the first year after completion. The retailer said its potential acquisition of Jos. A. Bank will be funded with the cash it has on hand and debt financing.