EX-99.1 2 h68977exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
The Men’s Wearhouse, Inc.


  (MAN'S LOGO)
News Release
   
For Immediate Release
MEN’S WEARHOUSE REPORTS
FISCAL 2009 THIRD QUARTER RESULTS
  Q3 2009 GAAP diluted EPS was $0.37 compared with Q3 2008 GAAP diluted EPS of $0.28 and adjusted diluted EPS of $0.30
  Company provides guidance for the fourth quarter of fiscal 2009
  Conference call at 5:00 pm Eastern today
HOUSTON — December 8, 2009 — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the third quarter ended October 31, 2009.
Third Quarter Sales Summary — Fiscal 2009
                                         
                    Total Sales   Comparable Store Sales
    U.S. dollars, in millions   Change %   Change %
    Current Year   Prior Year           Current Year   Prior Year
 
Total Company
  $ 462.0     $ 459.7       0.5 %                
 
MW
  $ 317.6 (a)   $ 315.6 (a)     0.6 %     - 0.2 %(b)     - 12.1 %(b)
 
K&G
  $ 79.3     $ 80.4       -1.4 %     -1.1 %     -13.0 %
 
United States
  $ 406.0     $ 406.4       -0.1 %     -0.4 %     -12.3 %
 
Moores
  $ 56.0     $ 53.3       5.0 %     1.9 %(c)     - 4.9 %(c)
 
Year-To-Date Sales Summary — Fiscal 2009
                                         
                    Total Sales   Comparable Store Sales
    U.S. dollars, in millions   Change %   Change %
    Current Year   Prior Year           Current Year   Prior Year
 
Total Company
  $ 1,452.4     $ 1,496.1       - 2.9 %                
 
MW
  $ 987.5 (a)   $ 1,006.2 (a)     - 1.9 %     - 3.0 %(b)     - 8.9 %(b)
 
K&G
  $ 277.4     $ 277.4       0.0 %     -0.8 %     -12.0 %
 
United States
  $ 1,292.1     $ 1,317.7       - 1.9 %     -2.5 %     - 9.6 %
 
Moores
  $ 160.3     $ 178.4       -10.1 %     - 1.9 %(c)     - 3.8 %(c)
 
 
(a)   Includes retail stores and ecommerce.
 
(b)   Comparable store sales do not include ecommerce. Stores from the After Hours acquisition are included beginning Q2 of fiscal 2008.
 
(c)   Comparable store sales change is based on the Canadian dollar.

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Diluted earnings per common share were $0.37 for the third quarter ended October 31, 2009. This compares to diluted earnings per common share guidance given September 9, 2009 of $0.27 to $0.30. Prior year third quarter GAAP diluted earnings per common share were $0.28 and adjusted diluted earnings per common share were $0.30 excluding $1.8 million (pre tax), or $0.02 per diluted share outstanding, in costs incurred in connection with the closure of the Canadian-based manufacturing facility operated by the Company’s subsidiary, Golden Brand.
THIRD QUARTER REVIEW
    Total Company sales increased 0.5% for the quarter.
  o   Clothing product sales, representing 72.3% of fiscal third quarter 2009 total net sales, decreased 0.2% due to decreases in the Company’s comparable store sales primarily driven by a reduction in store traffic levels offset by higher average ticket.
 
  o   Tuxedo rental sales, representing 21.1% of fiscal third quarter 2009 total net sales, increased 1.2%.
    Gross margin before occupancy costs, as a percentage of total net sales, decreased 50 basis points from 60.0% to 59.5%. Clothing product margins, as a percentage of related sales, decreased 114 basis points due to increased promotional activities and were offset by higher alteration service margins and the impact of the higher margin tuxedo rental revenues. Tuxedo rental revenue increased slightly as a mix of total sales from 21.0% to 21.1%.
 
    Occupancy costs decreased, as a percentage of total net sales, by 27 basis points from 15.9% to 15.7%. On an absolute dollar basis, occupancy costs decreased 1.2% from $73.3 million in the prior year to $72.4 million.
 
    Selling, general, and administrative expenses were $172.6 million in the current year and decreased 2.6% from the prior year’s adjusted SG&A of $177.1 million which excludes $1.8 million in costs associated with the closing of Golden Brand. The decrease is primarily due to cost-cutting measures and operational efficiencies. As a percentage of total net sales, adjusted SG&A decreased 118 basis points from 38.5% to 37.4%. SG&A excluding advertising decreased 4.8% from the adjusted prior year quarter.
 
    Operating income was $30.1 million or 6.5% of total net sales compared to adjusted operating income of $25.6 million or 5.6% of total net sales for the same period last year, excluding $1.8 million in Golden Brand closure costs. Net income was $19.7 million or 4.3% of total net sales compared to adjusted net income of $15.7 million or 3.4% of total net sales for the same period last year, which excludes $1.1 million in Golden Brand closure costs (net of tax).
 
    Cash and cash equivalent balances as of the end of the third quarter of 2009 were $198.5 million, an increase of $96.8 million over the cash and cash equivalent balances plus amounts held in short-term investments as of the same period last year.

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    Total inventories of $473.6 million declined 3.5% from the prior year third quarter of $490.8 million.
 
    Long term debt as of the end of the third quarter of 2009 was $43.0 million, a decrease of $45.6 million from the same period last year.
FOURTH QUARTER FISCAL 2009 GUIDANCE
The Company anticipates comparable store sales to decrease in the low single digit range at the Men’s Wearhouse. The Moores comparable store sales are expected to be flat to a low single digit increase. The K&G comparable store sales are anticipated to be flat to a low single digit decrease. Total Company sales are expected to decline in low single digit range for the fourth quarter. This includes a low single digit decrease in tuxedo rental revenues.
Gross profit before occupancy costs for the fourth quarter is expected to decline in the low single digit range from the prior year as the Company begins to anniversary a more aggressive posture in strengthening its value proposition for customers. Occupancy costs are expected to be in a flat to a low single digit decrease for the fourth quarter in absolute dollar terms.
Selling, general and administrative expenses for the fourth quarter are expected to be in the range of flat to a 1% increase from the prior year, excluding advertising costs, a prior year pretax non-cash fixed asset impairment charge of $1.8 million and a prior year gain of $8.8 million associated with an eminent domain sale of a distribution center.
This guidance includes an estimated effective tax rate of approximately 39.0% for the fourth quarter. In the prior year, the Company realized an income tax benefit for the quarter due to favorable developments on certain outstanding income tax matters and a true up of the tax provision for the full year.
The Company’s effective tax rate for the fiscal year is now estimated at 36.8%.
Weighted average fully diluted common shares outstanding are estimated to be 52.5 million for the fourth quarter and 52.3 million for the full year.
For the fourth quarter, the Company expects a GAAP loss per share to be in a range of $0.15 to $0.19.

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UPDATED CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 pm Eastern time on Tuesday, December 8, 2009, company management will host a conference call and real time web cast to review the fiscal third quarter and its outlook for the fourth quarter of fiscal 2009.
To access the conference call, dial 480-629-9724. To access the live webcast presentation, visit the Investor Relations section of the company’s website at www.menswearhouse.com. A telephonic replay will be available through December 15, 2009 by calling 303-590-3030 and entering the access code of 4187917#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
                                                 
    October 31, 2009   November 1, 2008   January 31, 2009
    Number   Sq. Ft.   Number   Sq. Ft.   Number   Sq. Ft.
    of Stores   (000’s)   of Stores   (000’s)   of Stores   (000’s)
 
Men’s Wearhouse
    581       3,279.8       579       3,248.7       580       3,263.1  
 
 
                                               
Men’s Wearhouse and Tux
    469       639.9       495       670.4       489       665.0  
 
 
                                               
Moores, Clothing for Men
    117       734.6       117       727.9       117       729.3  
 
 
                                               
K&G (a)
    107       2,475.6       107       2,473.0       108       2,493.4  
 
 
                                               
Total
    1,274       7,129.9       1,298       7,120.0       1,294       7,150.8  
 
(a)   94, 92 and 93 stores, respectively, offering women’s apparel.
Founded in 1973, Men’s Wearhouse is one of North America’s largest specialty retailers of men’s apparel with 1,274 stores. The Men’s Wearhouse, Moores and K&G stores carry a full selection of designer, brand name and private label suits, sport coats, furnishings and accessories and Men’s Wearhouse and Tux stores carry a limited selection. Tuxedo rentals are available in the Men’s Wearhouse, Moores and Men’s Wearhouse and Tux stores.
This press release contains forward-looking information. The forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be significantly impacted by various factors, including sensitivity to economic conditions and consumer confidence, possibility of limited ability to expand Men’s Wearhouse stores, possibility that certain of our expansion strategies may present greater risks and other factors described in the Company’s annual report on Form 10-K for the year ended January 31, 2009 and subsequent Forms 10-Q.
For additional information on Men’s Wearhouse, please visit the Company’s website at www.menswearhouse.com.
CONTACT:   Neill Davis, EVP & CFO, Men’s Wearhouse (281) 776-7000
Ken Dennard, DRG&E (713) 529-6600

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(MW LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
FOR THE THREE MONTHS ENDED
October 31, 2009 AND November 1, 2008

(In thousands, except per share data)
                                                         
    Three Months Ended     Variance  
            % of             % of                     Basis  
    2009     Sales     2008     Sales     Dollar     %     Points  
                   
Net sales:
                                                       
Clothing product
  $ 333,882       72.27 %   $ 334,415       72.75 %   $ (533 )     (0.16 %)     (0.48 )
Tuxedo rental services
    97,702       21.15 %     96,498       20.99 %     1,204       1.25 %     0.15  
Alteration and other services
    30,431       6.59 %     28,760       6.26 %     1,671       5.81 %     0.33  
                   
Total net sales
    462,015       100.00 %     459,673       100.00 %     2,342       0.51 %     0.00  
 
                                                       
Total cost of sales
    259,341       56.13 %     256,949       55.90 %     2,392       0.93 %     0.23  
                   
 
                                                       
Gross margin (a)
    202,674       43.87 %     202,724       44.10 %     (50 )     (0.02 %)     (0.23 )
 
                                                       
Selling, general and administrative expenses
    172,595       37.36 %     178,955       38.93 %     (6,360 )     (3.55 %)     (1.57 )
                   
 
                                                       
Operating income
    30,079       6.51 %     23,769       5.17 %     6,310       26.55 %     1.34  
 
                                                       
Net interest
    (19 )     0.00 %     (234 )     0.05 %     (215 )     (91.88 %)     (0.05 )
                   
 
                                                       
Earnings before income taxes
    30,060       6.51 %     23,535       5.12 %     6,525       27.72 %     1.39  
 
                                                       
Provision for income taxes
    10,375       2.25 %     8,948       1.95 %     1,427       15.95 %     0.30  
                   
 
                                                       
Net earnings
  $ 19,685       4.26 %   $ 14,587       3.17 %   $ 5,098       34.95 %     1.09  
                 
 
                                                       
Net earnings per diluted common share (b)
  $ 0.37             $ 0.28                                  
 
                                                   
 
                                                       
Weighted average diluted common shares outstanding:
    52,442               52,011                                  
 
                                                   
 
(a)   Gross margin as a percentage of related sales:
                                                         
    Three Months Ended   Variance
            % of           % of  
            Related           Related                   Basis
    2009   Sales   2008   Sales   Dollar   %   Points
         
Clothing margin
  $ 186,528       55.87 %   $ 190,622       57.00 %   $ (4,094 )     (2.15 %)     (1.14 )
Tuxedo margin
    81,205       83.11 %     80,296       83.21 %     909       1.13 %     (0.10 )
Alteration and other services margin
    7,335       24.10 %     5,087       17.69 %     2,248       44.19 %     6.42  
Occupancy costs
    (72,394 )     (15.67 %)     (73,281 )     (15.94 %)     887       1.21 %     0.27  
         
Gross margin
  $ 202,674       43.87 %   $ 202,724       44.10 %   $ (50 )     (0.02 %)     (0.23 )
                   
 
(b)   Calculated based on net earnings less net earnings allocated to participating securities of $196 thousand for the three months ended October 31, 2009.

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(MW LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
FOR THE NINE MONTHS ENDED
October 31, 2009 AND November 1, 2008

(In thousands, except per share data)
                                                         
    Nine Months Ended     Variance  
            % of             % of                     Basis  
    2009     Sales     2008     Sales     Dollar     %     Points  
                   
Net sales:
                                                       
Clothing product
  $ 1,057,246       72.80 %   $ 1,109,014       74.13 %   $ (51,768 )     (4.67 %)     (1.33 )
Tuxedo rental services
    298,688       20.57 %     294,145       19.66 %     4,543       1.54 %     0.90  
Alteration and other services
    96,423       6.64 %     92,899       6.21 %     3,524       3.79 %     0.43  
                   
Total net sales
    1,452,357       100.00 %     1,496,058       100.00 %     (43,701 )     (2.92 %)     0.00  
 
                                                       
Total cost of sales
    823,906       56.73 %     828,536       55.38 %     (4,630 )     (0.56 %)     1.35  
                   
 
                                                       
Gross margin (a)
    628,451       43.27 %     667,522       44.62 %     (39,071 )     (5.85 %)     (1.35 )
 
                                                       
Selling, general and administrative expenses
    525,704       36.20 %     574,491       38.40 %     (48,787 )     (8.49 %)     (2.20 )
                   
 
                                                       
Operating income
    102,747       7.07 %     93,031       6.22 %     9,716       10.44 %     0.86  
 
                                                       
Net interest
    (179 )     0.01 %     (1,358 )     0.09 %     (1,179 )     (86.82 %)     (0.08 )
                   
 
                                                       
Earnings before income taxes
    102,568       7.06 %     91,673       6.13 %     10,895       11.88 %     0.93  
 
                                                       
Provision for income taxes
    38,142       2.63 %     34,318       2.29 %     3,824       11.14 %     0.33  
                   
 
                                                       
Net earnings
  $ 64,426       4.44 %   $ 57,355       3.83 %   $ 7,071       12.33 %     0.60  
                   
 
                                                       
Net earnings per diluted common share (b)
  $ 1.22             $ 1.10                                  
 
                                                   
 
                                                       
Weighted average diluted common shares outstanding:
    52,218               51,913                                  
 
                                                   
 
(a)   Gross margin as a percentage of related sales:
                                                         
    Nine Months Ended   Variance
            % of           % of  
            Related           Related                   Basis
    2009   Sales   2008   Sales   Dollar   %   Points
         
Clothing margin
  $ 572,248       54.13 %   $ 624,256       56.29 %   $ (52,008 )     (8.33 %)     (2.16 )
Tuxedo margin
    248,684       83.26 %     244,576       83.15 %     4,108       1.68 %     0.11  
Alteration and other services margin
    25,547       26.49 %     19,291       20.77 %     6,256       32.43 %     5.73  
Occupancy costs
    (218,028 )     (15.01 %)     (220,601 )     (14.75 %)     2,573       1.17 %     (0.27 )
         
Gross margin
  $ 628,451       43.27 %   $ 667,522       44.62 %   $ (39,071 )     (5.85 %)     (1.35 )
         
 
(b)   Calculated based on net earnings less net earnings allocated to participating securities of $638 thousand for the nine months ended October 31, 2009.

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(MW LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
(Unaudited)
                 
    October 31,     November 1,  
    2009     2008  
ASSETS
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 198,538     $ 84,337  
Short-term investments
          17,434  
Accounts receivable, net
    17,304       17,804  
Inventories
    473,626       490,831  
Other current assets
    48,997       66,223  
 
           
 
               
Total current assets
    738,465       676,629  
Property and equipment, net
    370,191       393,391  
Tuxedo rental product, net
    100,653       84,702  
Goodwill
    59,111       58,695  
Other assets, net
    12,655       18,361  
 
           
 
               
Total assets
  $ 1,281,075     $ 1,231,778  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Accounts payable
  $ 121,374     $ 130,944  
Accrued expenses and other current liabilities
    106,082       102,347  
Income taxes payable
    24,743       468  
 
           
 
               
Total current liabilities
  $ 252,199     $ 233,759  
Long-term debt
    42,985       88,608  
Deferred taxes and other liabilities
    63,087       65,674  
 
           
 
               
Total liabilities
    358,271       388,041  
 
           
 
               
Shareholders’ equity:
               
Preferred stock
           
Common stock
    704       699  
Capital in excess of par
    323,864       312,485  
Retained earnings
    977,659       926,468  
Accumulated other comprehensive income
    33,203       16,621  
 
           
Total
    1,335,430       1,256,273  
 
               
Treasury stock, at cost
    (412,626 )     (412,536 )
 
           
 
               
Total shareholders’ equity
    922,804       843,737  
 
           
 
               
Total liabilities and equity
  $ 1,281,075     $ 1,231,778  
 
           

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(MW LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
FOR THE NINE MONTHS ENDED
October 31, 2009 AND November 1, 2008

(In thousands)
                 
    Nine Months Ended  
    2009     2008  
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net earnings
  $ 64,426     $ 57,355  
Non-cash adjustments to net earnings:
               
Depreciation and amortization
    64,879       68,699  
Tuxedo rental product amortization
    33,149       31,739  
Other
    3,125       11,691  
Changes in assets and liabilities
    (3,179 )     (81,423 )
 
           
 
               
Net cash provided by operating activities
    162,400       88,061  
 
           
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (44,466 )     (69,485 )
Purchases of available-for-sale investments
          (17,434 )
Proceeds from sales of available-for-sale investments
    19,410       59,921  
Other investing activities
          175  
 
           
 
               
Net cash used in investing activities
    (25,056 )     (26,823 )
 
           
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from issuance of common stock
    3,032       2,359  
Proceeds from revolving credit facility
          150,600  
Payments on revolving credit facility
    (25,000 )     (105,975 )
Payments on Canadian term loan
          (31,880 )
Cash dividends paid
    (11,029 )     (10,936 )
Purchase of treasury stock
    (90 )     (156 )
Other financing activities
    (1,426 )     (1,277 )
 
           
 
               
Net cash (used in) provided by financing activities
    (34,513 )     2,735  
 
           
 
               
Effect of exchange rate changes
    8,295       (19,082 )
 
           
 
               
INCREASE IN CASH AND CASH EQUIVALENTS
    111,126       44,891  
Balance at beginning of period
    87,412       39,446  
 
           
Balance at end of period
  $ 198,538     $ 84,337  
 
           

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