On a GAAP basis, consolidated gross margin was $320.9 million, an increase of $18.8 million, primarily due to the increase in net sales. As a per cent of sales, consolidated gross margin decreased to 37.3 per cent. On an adjusted basis, consolidated gross margin decreased primarily due to a decrease in retail gross margin rate.
Advertising expense for the fourth quarter of fiscal 2017 increased $1.2-$52.6 million but as a percent of sales to 6.1 per cent. The increase in advertising expense was driven primarily by a shift in timing of marketing spend from the third quarter. On a GAAP basis, operating income was $13.3 million compared to an operating loss of $18.9 million last year. On an adjusted basis, operating income was $14.8 million compared to $9.3 million last year. As a percent of sales, adjusted operating margin increased to 1.7 per cent.
Total net sales for 2017 decreased 2.2 per cent to $3,304.3 million. Retail net sales decreased 1.5 per cent primarily due to the impact of last year's store closures partially offset by the $40.7 million benefit from the 53rd week and an increase in retail segment comparable sales of 0.1 per cent. On a GAAP basis, consolidated gross margin was $1,408.8 million, a decrease of $32.7 million, primarily due to a decrease in corporate apparel net sales.
"In 2017, we delivered significant EPS growth and finished the year strong with positive comparable sales for both Men's Wearhouse and Jos A Bank in the fourth quarter," said Tailored Brands CEO Doug Ewert. "Our performance reflects the progress we are making on our key growth strategies. We more than doubled our custom business to over $100 million in 2017. We believe Tailored Brands is the largest and fastest growing retailer of men's custom clothing in North America and we plan to further enhance and differentiate our custom offering in 2018."
"We also significantly strengthened our balance sheet, reducing debt by approximately $200 million and lowering inventories by 11 per cent. In 2018, we plan to further reduce our debt, invest behind our growth strategies and return cash to shareholders via our dividend. In 2018, we remain focused on executing three key growth strategies: expand our custom business and make buying a custom suit as easy and affordable as buying a suit off the rack, strengthen our brands and grow market share by communicating the quality selection and service we provide at a great value, and enhance our omni-channel experience by combining the high-touch service we offer in our stores with the convenience of online shopping," concluded Ewert. (RR)
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