Throughout this conference call, management will be discussing results on an adjusted basis. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures and our explanation of why the non-GAAP financial measures may be useful are discussed in today's earnings release.

With me today are Doug Ewert, CEO, who will provide his perspective on Fiscal 2017 and our fourth quarter results and review our strategic initiatives; and Jack Calandra, CFO, who will provide a more in-depth review of our financial results and outlook. I would now like to turn the call over to Doug.

Doug Ewert -- Chief Executive Officer

Thank you, Julie and good afternoon everyone. Today, I'll recap our accomplishments in 2017, review our fourth quarter trends, and share with you our strategies to grow our business and to extend Tailored Brands' leadership in men's apparel.

First, I'll start with a high-level review of our 2017 results. We made significant progress on our three core growth strategies: (1) we more than doubled our custom sales to over $100 million, strengthening our position as the leader in custom and personalized apparel for men who want to look their best; (2) we launched new brand campaigns at Men's Wearhouse and Jos. A. Bank that attracted new customers to both brands, and drove more transactions; and (3) we made it easier for customers to shop with us online, with numerous enhancements to our e-commerce sites that increased traffic, average order values, and conversion rates.

The impact of these strategies built throughout the year and drove a strong finish to 2017, with positive fourth-quarter comparable sales at both Men's Wearhouse and Jos. A. Bank, and for our retail segment as a whole. Our investments in new talent and operational excellence helped us deliver a strong bottom line in 2017. We maintained healthy gross margins and managed our inventory and expenses diligently to deliver EPS growth of 23%. We plan to build on this foundation to extend our leadership in men's apparel and to grow the bottom line in 2018.

Now, I'd like to review our fourth quarter trends. In Q4, we posted positive total retail comp sales of 2.5%. Men's Wearhouse comp sales increased 2.3%. The positive momentum we saw in October carried into the fourth quarter, driven by positive transactions and more new-to-file customers, which we believe can be partially attributed to our new brand storytelling campaign since we've seen steady increases in new-to-file customers since we launched in August.

Suit sales remain strong and we doubled our customer business in Q4. Outerwear and sweaters also sold well, benefiting from the cold weather. Both our retail and rental comps were positive in Q4. We were pleased with the rental comp growth; however, we saw an even greater shift from rental to retail in the quarter, consistent with how we view the overall trend in many special occasion customers choosing to purchase suits instead of renting.

During the important January bridal show season, we presented the trifecta of tuxedo rentals, suits off the rack, and custom suiting, and we continue to see a greater preference for retail than in previous years.

Jos. A. Bank posted positive comp sales of 5.3%, marking the fifth consecutive quarter of positive comps for this brand. Comps were driven by higher transaction and higher units-per-transaction. Suit growth was strong with our Traveler business, a continued bright spot. During the quarter, we capitalized on the higher traffic selling period to clear a significant amount of older inventory in select categories such as sportswear and tailored clothing. While this lowered the selling margin rate compared to last year, it helped us achieve our goal of bringing Jos. A. Bank's inventory more in line with our smaller store fleet. We made great progress in 2017 and we plan to continue to reduce inventory at this brand in 2018.

For the full-year, Jos. A. Bank delivered positive comp sales of 5.4%, marking a strong turnaround for this brand. We estimate the transfer from closed stores accounted for just 1.5% of this growth, which shows the strong organic growth potential and Jos. A. Bank.

K&G comps were down 1.7%. Units-per-transaction and average ticket were each higher, but not enough to offset lower transactions. We know when customers come into our K&G stores, our sales associates do a great job. Our focus in 2018 will be to drive more traffic at K&G through targeted promotions and marketing activities.

Moores' comps decreased 1.4%, despite an increase in transactions. Suits and shoes posted strong comps, and winter accessories sold through well, but we moved a lot of sportswear and outerwear of lower average unit retail, which brought overall average unit retail down. In summary, we posted positive 2.5% comps for our retail brands in Q4. We like the overall direction of comp sales at Men's Wearhouse and Jos. A. Bank. Our teams are working hard to improve the comp trends at K&G and Moores.

Turning now to corporate apparel, with the anniversary of the large uniform rollout behind us, corporate apparel net sales increased 32% in the fourth quarter. This was driven primarily by new customer activity in the U.S., and further product launches for existing customers in the U.K. and Europe. We also benefited from a stronger British Pound this year. We're pleased with the recent new customer wins for our corporate apparel business.

Earlier today, we reported the sale of our retail dry cleaning business. MW Cleaners operates as an independent dry cleaning business that is separate from the vertically integrated dry cleaning operations that support our rental business. The sale of MW Cleaners is consistent with our commitment to optimize the portfolio, focus on our core businesses, and unlock cash flow. We wish the new owners the best of luck.

Turning to 2018, we plan to take our three key growth initiatives to the next level. Let me remind you what they are: (1) our ultimate goal is to make buying a custom suit a truly unique and personalized experience, while at the same time making it as easy and affordable as buying a suit off the rack; (2) strengthen our brands and grow market share -- we want to help more men experience the quality, selection, and service that we provide at a great value; and (3) enhance our omnichannel experience. Our objective is to combine the high-touch service we offer in our stores with the convenience of online shopping in one, seamless, connected experience.

First, I'd like to talk about how we plan to continue to grow our customer business. Men want the confidence that comes from looking great and custom is the ultimate way to achieve that personalized look and perfect fit. With sales more than doubling to over $100 million in 2017, we believe we are the largest and fastest growing retailer of men's custom clothing. So far this year, customer sales are now trending above $3 million per week, and we are clearly in the early innings of this opportunity. With custom suits starting at around $400, we can serve a large, addressable market of men who want a personalized look and a perfect fit at a reasonable price.

We have a multi-pronged growth opportunity with custom. First, we can significantly increase the penetration of custom as a percentage of total suits sold. Second, we can attract new customers with this excellent value proposition, and third, we can launch new custom products. We're working to leverage our scale, vertical integration, and supply chain advantages to make our custom offering even more attractive and differentiated. One of the advantages of buying a suit off the rack is the speed of delivery. During 2017, we tested expedited custom delivery and validated our hypothesis that the faster we can deliver a custom suit, the more customers will give it a try.

Just a few weeks ago, we announced standard three-week delivery for our Joseph Abboud and Jos. A. Bank Reserve custom clothing, which is crafted in our American factory. We also began rolling out Custom Express, which is a select assortment of custom suits available in just one week. Based on overwhelmingly popular demand in our pilot stores, we'll expand Custom Express into more Men's Wearhouse and Jos. A. Bank stores throughout the year.

During 2017, we also tested expanded custom shops in about 60 stores. The new custom shops create a special experience for customers, who can more easily select their fabrics and custom features in a comfortable setting. Based on favorable results from the pilot, we plan to roll these shops out to approximately 450 combined Men's Wearhouse, Jos. A. Bank and Moores stores during 2018.

Custom is a win-win for Tailored Brands and our customers. Our research and experience show that men who buy custom suits from us are happier with their purchase, shop more frequently, and have a higher annual spend than off-the-rack customers. We'll be dedicating significant marketing efforts to build awareness for custom, including promoting it to our special occasion customers and hosting nationwide custom trunk shows. We look forward to updating you on continued innovations in our customer business this year.

Now, I'd like to talk about our strategy to strengthen our brands and grow market share. We plan to continue to shift more of our messaging mix toward branding versus promotion, and more of our channel mix away from broadcast toward digital. We were pleased to see an increase in new customers at both Men's Wearhouse and Jos. A. Bank following our new branding campaigns that launched last fall. The Men's Wearhouse branding campaign reinforces our brand promise that you're going to like the way you look. The campaign features our expert style consultants and master tailors in the stores who instill customers with confidence and reinforces the importance of fit for all men, including big and tall.

In Q4, we continued to invest in this successful campaign, which helped increase transactions, new-to-file customers, and positive comps at Men's Wearhouse. For Jos. A. Bank, in September of 2017, we launched our first branding campaign called Traditions Tailored for Today. It evolved the marketing mix away from pure product and promotional advertising to more advertising focused on lifestyle and brand building.

In 2018, we plan to further distinguish Jos. A. Bank as a lifestyle brand with elevated storytelling around what makes shopping with us different. We'll emphasize a modern take on classic styling, drive awareness of custom clothing, as well as leverage the deep heritage of the Jos. A. Bank brand across all channels.

Third, I'd like to talk about our plans to strengthen and enhance our omnichannel capabilities. Our goal is to offer our customers a seamless shopping experience anytime, anywhere they want and combine the high-touch service we offer in our stores with the convenience of shopping online. I'm very proud of the progress we made in 2017 with numerous enhancements to our e‑commerce sites that made it easier for customers to shop with us online. This includes adding guided shopping, refining product recommendations, and streamlining the checkout process.

In 2017, our e-commerce sites saw 65 million visitors, an increase of 8% over the previous year, and generated higher conversion rates and average order values. In 2018, we'll create both online and in-store digital experiences to drive discovery, encourage store visits, and augment the in-store retail experience. We also plan to translate our winning in-store selling formula to the online environment and provide our customers with the guidance and assurance he needs to confidently purchase online.

Finally, we'll continuously streamline the online shopping experience to make it more easy, intuitive, and personal. We look forward to reporting on our progress throughout the year.

In summary, in 2017, we made progress on our growth strategies, which drove higher comparable sales and profitability, and established a strong foundation for future growth. In 2018, we remain focused on three strategies to drive growth: grow our customer business, tell our brand stories, and strengthen our omnichannel customer experience. Putting our customers first is at the core of everything we do. We're delivering exclusive and differentiated products, and elevating the level of personalization and service we provide our customers every day. If we do that consistently, we'll win over the long term.

With that, I'll turn it over to Jack to review the financials.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Thanks, Doug. Good afternoon, everyone. Today, I'll review the financial results for the fourth quarter and full-year 2017, and provide guidance for 2018. I will also report on the progress we are making to strengthen our balance sheet, unlock additional cash flow, and execute our capital allocation strategy.

Before I begin, I'd like to make sure everyone knows that I'll be discussing adjusted numbers today, which eliminate certain costs that are not indicative of core business results. Also, to make our results comparable to last year, we have recapped our non-GAAP presentation for full-year 2016 to add back $0.03 of EPS associated with a net gain on extinguishment of debt in last year's third quarter. This changes our prior full-year adjusted EPS to $1.79 from $1.76.

Turning now to our fourth quarter and full-year results, which include the benefit of the 53rd week. Total sales for the fourth quarter were $859.9 million, an increase of 8.4%. Retail segment sales were up 6.6%, which included a 2.5% increase in comp sales, and a $41 million benefit from the 53rd week. As Doug mentioned, we were pleased to end the year with positive fourth quarter comp sales at both Men's Wearhouse and Jos. A. Bank.

Corporate apparel sales increased about $18 million, or 32%. The increase was primarily due to the rollout of new uniform programs, a $5 million benefit from the 53rd week, and favorability from a stronger British Pound. For the full-year, net sales were $3.3 billion, a decrease of 2.2%. Retail sales decreased 1.5% due to the impact of store closures in 2016, partially offset by the 53rd week. As anticipated, corporate apparel sales decreased 10.3%, as we lapped the rollout of a major uniform program.

Moving to gross margin, fourth quarter consolidated gross margin of $320.9 million was up $18.3 million, largely due to the increase in net sales. As a percent of sales, consolidated gross margin decreased 80 basis points to 37.3%, primarily due to a decrease in retail gross margin rate. Fourth quarter retail gross margin of 38.4% was down 60 basis points. The decrease in retail gross margin rate was due mostly to deleveraging of procurement and distribution costs associated with our decision to take advantage of improved traffic to clear older inventory at Jos. A. Bank and was somewhat offset by occupancy expense leverage.

For the full-year, consolidated gross margin of $1.4 billion decreased about $30 million, largely due to a decrease in corporate apparel sales. As a percent of sales, consolidated gross margin was 42.7%, up 10 basis points. Retail gross margin was $1.3 billion, and retail gross margin rate increased 40 basis points, mostly due to occupancy expense leverage.

Fourth quarter advertising expense increased $1.2 million but decreased 40 basis points to 6.1% of sales. This was consistent with our strategy to invest in successful marketing campaigns into Q4, which we believe helped drive positive comp sales at our largest retail brands. For the full-year, advertising expense decreased $16.5 million, and was down 40 basis points to 5.2% of sales. The decrease reflected lower television spend, which was in line with our plan to shift to more digital advertising.

Fourth quarter SG&A increased by $10.9 million, primarily due to the impact of the 53rd week, and increased incentive compensation expense, which was offset somewhat by lower employee-related benefit costs. As a percent of sales, SG&A decreased 110 basis points to 29.4%. For the full-year, SG&A decreased $35.9 million. Lower store-related costs resulted from last year's store rationalization program and lower employee-related benefit costs were partially offset by increased incentive compensation expense. As a percent of sales, SG&A decreased 40 basis points to 29.8%.

Fourth quarter operating income was $14.8 million, compared to $9.3 million last year. Operating margin improved 50 basis points to 1.7%. Full-year operating income of $248.1 million grew 8.2%. Operating margin increased 70 basis points to 7.5%. Fourth-quarter net interest expense was $25 million, compared to $25.2 million last year. The 53rd week mostly offset the benefit from debt repayment this year.

In the fourth quarter, we realized a $1.1 million loss on extinguishment of debt, resulting from the write-off of deferred financing cost related to the $40 million voluntary pre-payment on our term loan and the repurchase of $39 million face value of senior notes. There was no net gain or loss on extinguishment of debt in last year's fourth quarter. For the fiscal year, interest expense was $100 million, compared to $103 million last year, reflecting our reduced debt and somewhat offset by the 53rd week. We reported a gain on extinguishment of debt of $5.4 million, or $0.08 per share, compared to $1.7 million or $0.03 per share last year.

In Q4, we benefited from an adjusted tax rate of 99.3%, compared to 42.3% last year. The adjusted effective tax rate reflects a reduction in the full-year rate to 29% from 33%. This reduction was largely driven by discrete tax items, tax credits, and reductions in state income tax. While our fourth quarter adjusted tax rate excludes the impact of the Tax Cuts and Jobs Act of 2017, our GAAP tax rate includes it. These items include the revaluation of our deferred tax liabilities at the new lower rate, the one-time transition tax on accumulated foreign earnings, and a change in our position on permanently invested foreign earnings. In addition, our GAAP rate includes a favorable tax resolution associated with the Jos. A. Bank acquisition.

Fourth quarter EPS was break-even, compared to a loss of $0.19 last year. For the full-year, EPS increased 23% to $2.20, up from $1.79 last year.

Moving on to the balance sheet and cash flow, we made significant progress in 2017 to strengthen our balance sheet and generate greater cash flow. We ended the year with $104 million of cash, an increase of $33 million versus last year, and had no draw against our revolving credit facility. Inventories were down $104 million, or 11% below last year. Retail inventories were down $111 million, or 13%, with the largest reduction at Jos. A. Bank. This was somewhat offset by a $7 million increase in corporate apparel inventory, which was entirely due to FX.

Total debt at year-end was approximately $1.4 billion, down about $200 million from year-end 2016. During the fourth quarter, we repurchased and retired $39 million of face value of senior notes at an average price of about 100% of cost. Full-year repurchases of the senior notes totaled $154 million face value, at an average price of about 95% of cost.

During the fourth quarter, we also made a voluntary pre-payment of $40 million on the term loan in addition to our two scheduled payments, totaling $3.5 million. Full-year payments on the term loan totaled $53 million.

Cash flow from operations for 2017 was $351 million, up $108 million versus last year. This was driven by higher earnings, as well as planned lower inventory and rental product purchases this year, which were partially offset by last year's income tax refund. CapEx spend for 2017 was $95 million, $5 million lower than last year. We continue to invest in delivering a superior customer experience, with the majority of spend on stores, IT, and supply chain.

Subsequent to year-end, on March 3, as part of our strategy to focus on our core business and unlock cash flow, we sold our MW Cleaners business for $18 million. With respect to real estate, during the fourth quarter, we closed two Jos. A. Bank stores and one Men's Wearhouse store for a reduction of three stores. The total number of locations at the end of 2017 was 1,477, down from 1,667 at the end of last year.

Now, I will provide our Fiscal 2018 full-year outlook. We expect to deliver earnings-per-share of $2.35 to $2.50 per share. As a reminder, our Fiscal 2017 EPS of $2.20 included several non-recurring items. Specifically, gains of $0.05 from the 53rd week and $0.08 from the extinguishment of debt, offset by losses of $0.07 from Macy's and $0.04 from the hurricanes. In addition, we expect the sale of MW Cleaners to be $0.02 dilutive to Fiscal 2018 EPS.

Our guidance for 2018 assumes the following. We expect full-year comparable sales for Men's Wearhouse and Jos. A. Bank to be positive, low single-digits, Moores to be flat to up slightly, and K&G to be flat to down slightly. With respect to net sales, as a reminder, this year we recognized a $46 million benefit from the 53rd week and $35 million from MW Cleaners. In addition, we are revising our accounting treatment for certain discounts. We expect the impact to decrease Fiscal 2018 net sales by about $16 million, with a corresponding decrease in SG&A.

With regard to tax, we estimate tax reform will lower our effective tax rate to approximately 25%. The lower rate will give us more flexibility to invest in our business, strengthen our balance sheet, and return cash to shareholders. In 2018, given that we already have a robust investment plan in place to support our growth strategies, we plan to use the excess cash flow from tax reform to further reduce our outstanding debt.

We plan to reduce inventories by high single-digit percentage. We expect capital expenditures of about $100 million. We expect depreciation and amortization expense of about $100 million. With respect to real estate, we expect to close a net 10 stores. While we don't typically provide quarterly guidance, we thought it would be helpful to provide some additional information for modeling Q1 and Q2.

Versus 2017, we are planning Q1 sales and EPS up, and Q2 sales and EPS down, due to the calendar shift from the 53rd week and the earlier Easter this year. In addition, we recorded most of the approximately $5 million operating loss from our Macy's business in Q1 of last year.

In summary, we made significant progress on our financial priorities in 2017. We delivered EPS growth of 23% and generated 45% more cash flow from operations that we invested in our business and used to reduce debt. With debt reduction of roughly $200 million, coupled with higher operating profits, we reduced our debt-to-EBITDA ratio to 3.9X from 4.7X last year. And we increased our liquidity with more cash on hand and greater availability under our upside and extended ABL. We are excited to build on this foundation in 2018.

Now, I'll turn the call back to the operator, who will open the line for your questions.

Questions and Answers:

Operator

At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * key. One moment please, while we poll for questions.

Our first question comes from Paul Trussell, Deutsche Bank. Please proceed with your question.

Damon Polistina -- Deutsche Bank -- Analyst

Hi, this is Damon Polistina on for Paul. Thanks for taking our questions. Just looking at the custom business, can you quantify your feeling for how big that opportunity is moving to the future? Then also, how does that affect margins looking at gross margins, and then does it affect SG&A with more shipping costs or anything like that?

Doug Ewert -- Chief Executive Officer

I'm not going to quantify how big the opportunity is, but I can tell you with all of the testing that we're doing and the evaluation that we do of the stores that are outperforming the averages, we see a tremendous amount of opportunity. Our top stores penetrate very highly in custom into not only their tailored clothing business but the total store. We have done enough testing around speedy delivery to know that we can get a meaningful lift in the business when we can deliver faster. We've done testing on new shops. We know we can get a meaningful lift in the custom business with the expanded exposure inside the stores.

Then, obviously, as we raise awareness with our advertising campaigns, we can drive a larger penetration of custom customers who are new to file because right now, there's a disproportionate amount of our custom business that comes from existing customers that trade up into custom. So, really, an unprecedented amount of runway, and because we are paving new territory, it's really hard to know how high is high, but we see a significant upside opportunity with custom.

As far as margins go, we're not breaking out the discreet margin on that business. But we can tell you that the margin rate is a little lower in custom than it is out of the rack, although the margin dollars are considerably higher in custom than they are out of the rack. We also get a much higher annual spend, both in total retail dollars and in margin dollars from customers who buy custom from us. The economics look really strong around custom and the upside looks really promising.

Damon Polistina -- Deutsche Bank -- Analyst

Thank you.

Doug Ewert -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Janet Kloppenburg, JJK Research. Please proceed with your question.

Janet Kloppenburg -- JJK Research -- Analyst

Hi, everybody and congrats on a good quarter.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Thanks, Janet.

Doug Ewert -- Chief Executive Officer

Thanks, Janet.

Janet Kloppenburg -- JJK Research -- Analyst

I wanted to ask just a technical question. If you could quantify how much that tax helps the fourth quarter result? I think the much higher rate that probably protected a little bit there. Can you help me with that?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Yeah, what I would say, Janet, is that we had some state income tax savings in the fourth quarter that lowered our full-year effective rate to 29% from 33%. These changes were unrelated to the Tax Reform Act. This was more about -- and it's good news -- improving profitability in our business, which allowed us to reverse some valuation allowances that we had, as well as the expiration of some thin 48 because you wanted a technical answer, so thin 48 reserves that have expired. So, that's what brought our full-year rate down to the 29%.

Janet Kloppenburg -- JJK Research -- Analyst

But can you quantify the impact on the fourth quarter break-even result? What would it have been at a normalized rate?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

What I would say, Janet is that we had guided to, for the full-year EPS of $2.03 to $2.08, and we came in at $2.20. If we had held to our original 33% tax rate that we had guided to, we would've come in right at $2.08.

Janet Kloppenburg -- JJK Research -- Analyst

Okay, good. That's exactly what my model came out to and I was at the $2.08, I just wanted to make sure I was right on that. So, OK. Thank you. Then I also wanted to ask, Jack, if you could talk a little bit about Jos. A. Bank's inventory level? I know you cleared out some and that was a great idea, and where they are compared to where you want them to be, and how much longer it'll take? Then just lastly, what are you seeing in the promotional environment and how should we be thinking about your gross margin opportunity total company in Fiscal 2018?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

As far as inventory, I'll remind you that we closed about 100 full-line Jos. A. Bank stores in 2016, and we essentially consolidated the vast majority of that inventory into the existing fleet. So, we're working our way down through that and we've taken a huge bite out of it. We see continued opportunity to get more efficient with our inventory at Jos. A. Bank and, in fact, at the total Tailored Brands level, we're guiding down high single-digits in retail inventory for this year, for 2018. That's on top of the 11% we came down last year. And, in fact, just the retail inventory last year came down 13%.

So, this is a combination of lower purchases, clearing through some slower-selling product, new technology that's helping us to be more efficient with our replenishment businesses, and essentially making room for more new products. Performance products are selling really well across the board. So, converting more of our inventory to performance products. Stretch is an important component in a very large amount of our products. So, that's the direction we're going in. Then I would also add the kicker to the whole thing is custom. The more of our business that translates into custom reduces the need to carry as much inventory in store.

Doug Ewert -- Chief Executive Officer

Yeah, and Janet, I'll jump in just on the question you had about 2018 gross margins.

Janet Kloppenburg -- JJK Research -- Analyst

Could I add just a little? Just if you could talk to us a little bit about the promotional levels at the Men's Wearhouse brands, Moores, K&G, and the Men's Wearhouse in the fourth quarter year-over-year? Thank you.

Doug Ewert -- Chief Executive Officer

Yeah, our businesses, we're in the promotional business, to begin with. We were certainly very promotional throughout the fourth quarter. We took advantage of some of the increased traffic that we were seeing in our stores to get more aggressive with some of the older inventory in our stores. We got some great results out of that. We bled off a little AUR to do that, but it generated positive margin dollars, so it was a good move. I don't see any material increase in the amount of promotional activity that we were doing during the fourth quarter, but the fourth quarter is the most promotional period of the year.

Janet Kloppenburg -- JJK Research -- Analyst

Okay, Jack, I'm sorry I interrupted you. Forgive me.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

That's OK, Janet. We don't guide to gross margin but wanted to share with you some helpful things to consider. So if we look at headwinds and tailwinds for gross margin for 2018, some of the headwinds are we are seeing some price increases in wool starting in fall of '18. Obviously, we're going to be looking to mitigate those cost increases, but that is certainly something that we're starting to see. Doug also just mentioned the custom growth, which is higher gross margin dollars, but a lower rate.

The other dynamic we have going on in the business, and this is also a good thing, but we've got a shift from the rental business to the retail business. Obviously, the rental business is a higher gross margin and also a higher SG&A business. So, those are just some headwinds that we have looking at the gross margin rate.

I think on the other side, FX, I think we believe with the stronger Pound and the stronger Canadian Dollar, will be more of a tailwind. But I will say I wouldn't be looking for gross margin rate as a big lever for operating margin expansion in 2018. I think that operating margin expansion will [inaudible] looking at our leveraging our operating expenses and with the custom growth and the custom dollar growth, that will be helpful.

Janet Kloppenburg -- JJK Research -- Analyst

And you can get the leverage on the comp guidance, right? On the SG&A expense, that would lever your expenses?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

That's right.

Janet Kloppenburg -- JJK Research -- Analyst

Okay, great. Good luck you guys, thanks.

Doug Ewert -- Chief Executive Officer

Thanks, Janet.

Operator

Our next question comes from William Reuter, Bank of America Merrill Lynch. Please proceed with your question.

William Reuter -- Bank of America Merrill Lynch -- Analyst

Good afternoon, guys.

Doug Ewert -- Chief Executive Officer

Hi, William.

William Reuter -- Bank of America Merrill Lynch -- Analyst

In your prepared remarks, you talked about whether and how you had some strong sales of sweaters. Is there any way you can quantify in any way how much weather may have helped? I guess this would just be talking about what percentage increases you saw in those categories or what comps in those categories would have been, or comps excluding those categories? Any way you could help there.

Doug Ewert -- Chief Executive Officer

Yeah, William. I'm not going to break out numerically for you but I can tell you that we had a very strong fall seasonal business this year. That's not always true every year, but this year we had a very strong fall seasonal business and we've come out of fall '17 cleaner than we ever have been from a seasonal inventory standpoint.

William Reuter -- Bank of America Merrill Lynch -- Analyst

Okay. Then with regard to the sale of the cleaners business, was that just kind of a one-off thing or should we think that you guys will be looking to opportunistically, potentially sell other banners should buyers emerge for those?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

This is Jack. I would say we're in constant dialogue with our Board about our portfolio and looking at ways to unlock shareholder value. The way I think about our current portfolio is we've got, obviously, our four branded retail businesses. We've got a corporate apparel business. So, until about a week and a half ago, we had a retail dry cleaning business. I would say among those three groups of businesses, there aren't a lot of revenue or cost synergies, and so I think part of the discussion that Doug shares was in terms of our focus and unlocking cash and creating value, that was why we proceeded with the cleaners deal. I'm not previewing anything at this time, but certainly, it is a conversation we continue to have.

William Reuter -- Bank of America Merrill Lynch -- Analyst

Okay. Then just lastly, you talked about using free cash flow this year for further debt reduction. I guess, I'm not sure whether you guys have any targets that you're laying out for leverage or alternatively, whether you could talk about whether you guys will allocate more of that toward the term loan versus your bonds.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Yeah, in terms sort of a near-term target or a medium-term target, we're looking to get to 3.5X debt-to-EBITDA. That allows us more flexibility under our current credit agreements. I would say longer term, we're looking at a 3 multiple of debt-to-EBITDA. So, that's what we're targeting.

William Reuter -- Bank of America Merrill Lynch -- Analyst

Great. Thank you.

Doug Ewert -- Chief Executive Officer

Thanks, William.

Operator

Our next question comes from Carla Casella, JP Morgan. Please proceed with your question.

Doug Ewert -- Chief Executive Officer

Carla, are you there?

Operator

Your line is now live.

Carla Casella -- JP Morgan -- Analyst

Sorry about that. Can you hear me now?

Doug Ewert -- Chief Executive Officer

Yes.

Carla Casella -- JP Morgan -- Analyst

Hello? Okay, great. Did you disclose how much of the cleaning business generated an EBITDA?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

We did not disclose how much EBITDA was generated by the cleaning business. What I would say though is that the proceeds of the sale will help us to further de-leverage.

Carla Casella -- JP Morgan -- Analyst

Okay. Then, was the cleaning business the same, about $34 million in sales broken out in some of your prior financials? Is it all of that business? Or is just a piece of that?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

It's all of that business. So, the $35 million we report separately in our Q and K. That was our 2017 revenue and all of that business was sold.

Carla Casella -- JP Morgan -- Analyst

Okay. Will that have any implications for the remaining business? You were using it originally for the tux. Will you now have to outsource and will that raise any of the cost in your other businesses?

Doug Ewert -- Chief Executive Officer

No, Carla. You're right. Years ago we used to use the retail dry cleaning business to take overflow during peak season. In more recent years, we've expanded our capacity within the tux rental distribution center, so it's all self-contained now.

Carla Casella -- JP Morgan -- Analyst

Okay, great. Thank you. All my other questions were answered.

Doug Ewert -- Chief Executive Officer

Thank you.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Thank you.

Operator

Our next question comes from Grant Jordan, Wells Fargo. Please proceed with your question.

Grant Jordan -- Wells Fargo -- Analyst

Good afternoon. First question, you talked about clearing out some old inventory at the Jos. A. Bank stores. How close are you to being where you want to be on the Jos. A. Bank inventory side?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Well, not breaking out by brand, but we're going to bring down the inventories of total Tailored Brands in the high single-digits this year. So, we see an opportunity to get more efficient.

Grant Jordan -- Wells Fargo -- Analyst

Okay. Is it just changing the [inaudible] [00:43:15] merchandise or is this old product that just wasn't moving?

Doug Ewert -- Chief Executive Officer

Well, it's both. We're obviously bringing in new receipts that the customers are responding well to and we are liquidating older inventory that's slower moving and moving in the general direction of being a much more agile organization.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Just to add to Doug's comment, as you remember, in 2016, we closed a big chunk of Jos. A. Bank stores. We absorbed that inventory into our smaller network, so we've been working through that inventory. We made really good progress on that in 2017. We've got a little bit more work to do in 2018.

Grant Jordan -- Wells Fargo -- Analyst

Okay, that's helpful. I guess one more question. You talked about you paid down over $200 million of debt this year. Obviously, going into '18 you've got the benefits of tax reform and continued earnings growth, do you think you'll be able to pay down more than $200 million of debt this year?

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

We're not guiding to a specific number, but I think given some of the metrics that I shared, obviously, starting with our EPS and working up the P&L, and if we share the CapEx and the depreciation, again we want to maintain our current dividend, I think you can probably get to a pretty healthy number there for debt reduction for 2018.

Grant Jordan -- Wells Fargo -- Analyst

Great. Thank you very much.

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Thank you.

Doug Ewert -- Chief Executive Officer

Thanks, Grant.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Doug Ewert for closing remarks.

Doug Ewert -- Chief Executive Officer

Thank you very much for your interest in our company and we look forward to updating you on our results and progress next quarter.

Operator

This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.

Duration: 46 minutes

Call participants:

Julie MacMedan -- VP, Investor Relations

Doug Ewert -- Chief Executive Officer

Jack Calandra -- EVP, Chief Financial Officer, and Treasurer

Damon Polistina -- Deutsche Bank -- Analyst

Janet Kloppenburg -- JJK Research -- Analyst

William Reuter -- Bank of America Merrill Lynch -- Analyst

Carla Casella -- JP Morgan -- Analyst

Grant Jordan -- Wells Fargo -- Analyst

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