EX-99.1 2 h70107exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
The Men’s Wearhouse, Inc.


News Release
  (MEN’S WEARHOUSE LOGO)
For Immediate Release
MEN’S WEARHOUSE REPORTS FISCAL 2009
FOURTH QUARTER AND FULL YEAR RESULTS
  Q4 2009 GAAP diluted loss per share was $0.36 including a $0.25 per diluted share non-cash asset impairment charge resulting in Q4 2009 adjusted loss per share of $0.11
  Fiscal 2009 GAAP diluted earnings per share were $0.86 and adjusted diluted earnings per share were $1.11
 
  Company provides guidance for first quarter of fiscal 2010
 
  Conference call at 5:00 pm Eastern today
HOUSTON – March 10, 2010 – The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the fourth quarter ended January 30, 2010.
                                         
  Fourth Quarter Sales Summary - Fiscal 2009  
    U.S. dollars, in millions     Total Sales Change %     Comparable Store Sales Change %  
    Current Year     Prior Year             Current Year     Prior Year  
 
Total Company
  $ 457.2     $ 476.4       -4.0 %                
 
MW
  $ 294.3 (a)   $ 315.8 (a)     -6.8 %     - 7.1 %(b)     - 9.7 %(b)
 
K&G
  $ 92.7     $ 98.6       -6.0 %     -5.0 %     -10.7 %
 
United States
  $ 395.5     $ 424.5       -6.8 %     -6.6 %     - 9.9 %
 
Moores
  $ 61.7     $ 51.9       19.1 %     1.9 %(c)     - 10.5 %(c)
 
                                         
  Year-To-Date Sales Summary - Fiscal 2009  
    U.S. dollars, in millions     Total Sales Change %     Comparable Store Sales Change %  
    Current Year     Prior Year             Current Year     Prior Year  
 
Total Company
  $ 1,909.6     $ 1,972.4       -3.2 %                
 
MW
  $ 1,281.8 (a)   $ 1,322.0 (a)     -3.0 %     - 4.0 %(b)     - 9.0 %(b)
 
K&G
  $ 370.1     $ 376.0       -1.6 %     - 1.9 %     -11.7 %
 
United States
  $ 1,687.5     $ 1,742.2       -3.1 %     -3.5 %     - 9.6 %
 
Moores
  $ 222.1     $ 230.2       -3.6 %     - 0.9 %(c)     - 5.6 %(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 loss per share was $0.36 for the fourth quarter ended January 30, 2010. Adjusted loss per share was $0.11. This excludes a $13.1 million (net of tax) or $0.25 per diluted share non-cash asset impairment charge. This compares to diluted loss per share guidance given December 8, 2009 of $0.15 to $0.19. Prior year fourth quarter GAAP diluted earnings per share were $0.03 and adjusted loss per share was $0.06 excluding $5.8 million (net of tax) or $0.11 per diluted share gain from an asset sale and $1.2 million (net of tax) or $0.02 per diluted share for a non-cash asset impairment charge.
Diluted earnings per share were $0.86 for fiscal year 2009. Adjusted diluted earnings per share were $1.11. This excludes a $13.1 million (net of tax) or $0.25 per diluted share non-cash asset impairment charge.
FOURTH QUARTER REVIEW
    Total Company sales decreased 4.0% for the quarter.
    Clothing product sales, representing 85.3% of fiscal fourth quarter 2009 total net sales, decreased 4.1% due to decreases in the Company’s comparable store sales primarily driven by a reduction in store traffic levels and a lower domestic average ticket.
 
    Tuxedo rental sales, representing 7.7% of fiscal fourth quarter 2009 total net sales, decreased 1.2%.
    Gross margin before occupancy costs, as a percentage of total net sales, decreased 105 basis points from 53.7% to 52.7%. Clothing product margins, as a percentage of related sales, decreased 127 basis points primarily due to increased promotional activities.
 
    Occupancy costs increased, as a percentage of total net sales, by 35 basis points from 15.3% to 15.7%. On an absolute dollar basis, occupancy costs decreased 1.9% from $73.0 million in the prior year to $71.6 million.
 
    In the fourth quarter, the Company incurred a pretax non-cash asset impairment charge related to 157 stores (145 Men’s Wearhouse and Tux stores and 12 K&G stores) in the amount of $19.5 million. Selling, general, and administrative expenses, excluding this charge, were $184.3 million in the current year and decreased 4.3% from the prior year’s adjusted SG&A of $192.6 million which excludes an $8.8 million pretax gain from an asset sale and a $1.8 million pretax non-cash asset impairment charge. As a percentage of total net sales, adjusted SG&A decreased 10 basis points from 40.4% to 40.3%. Adjusted SG&A excluding advertising decreased 3.8% from the adjusted prior year quarter.
 
    Operating loss excluding the $19.5 million pretax non-cash asset impairment charge was $15.1 million or negative 3.3% of total net sales compared to adjusted operating loss of $9.6 million or negative 2.0% of total net sales for the same period last year, which excludes an $8.8 million pretax gain from an asset sale and a $1.8 million pretax non-cash asset impairment charge.

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    Cash and cash equivalent balances as of the end of the fourth quarter of 2009 were $186.0 million, an increase of $81.5 million over the cash and cash equivalent balances plus amounts held in short-term investments as of the same period last year.
 
    Total inventories as of the end of the fourth quarter of 2009 were $431.5 million, a decrease of 2.0% from the prior year same period of $440.1 million.
 
    Long term debt as of the end of the fourth quarter of 2009 was $43.5 million, a decrease of $19.4 million from the same period last year.
 
    Fiscal 2009 total capital expenditures were $56.9 million, which consisted of $29.9 million for new stores, store remodels and store relocations and $27.0 million related to information technology and distribution centers and other corporate projects.
 
    During fiscal 2009, the Company opened 5 new Men’s Wearhouse stores and 1 Men’s Wearhouse and Tux store and closed 4 Men’s Wearhouse stores, 1 K&G store, and 36 Men’s Wearhouse and Tux stores.
FIRST QUARTER 2010 GUIDANCE
    For the first quarter of the fiscal year, the Company expects GAAP diluted earnings per share in a range of $0.12 to $0.16.
 
    The Company anticipates comparable store sales at its MW stores to be flat to a decline in the low single digit range, at K&G a decrease in the low single digit range and at Moores a flat to low single digit decrease. Included in this outlook is a low single digit increase in tuxedo rental revenues.
 
    Total gross profit for the first quarter is expected to increase in the low single digit range from the prior year. Occupancy costs are expected to decrease in a low single digit range in absolute dollar terms. Selling, general and administrative expenses are expected to increase in the low single digit range from the prior year.
 
    This guidance includes an estimated effective tax rate of 35.2% for the first quarter.
 
    Fully diluted shares outstanding of 52.5 million are estimated for the first quarter.
 
    Capital expenditures for the full year are targeted in a range of $55 million to $60 million and depreciation and amortization is estimated at $75 million.

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UPDATED CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 pm Eastern time on Wednesday, March 10, 2010, company management will host a conference call and real time web cast to review the fiscal fourth quarter and full year 2009 and provide its outlook for first quarter 2010.
To access the conference call, dial 480-629-9867. 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 March 17, 2010 by calling 303-590-3030 and entering the access code of 4248288#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
                                 
    January 30, 2010     January 31, 2009  
    Number     Sq. Ft.     Number     Sq. Ft.  
    of Stores     (000’s)     of Stores     (000’s)  
Men’s Wearhouse
    581       3,284.4       580       3,263.1  
Men’s Wearhouse and Tux
    454       623.4       489       665.0  
Moores, Clothing for Men
    117       734.6       117       729.3  
K&G (a)
    107       2,475.6       108       2,493.4  
Total
    1,259       7,118.0       1,294       7,150.8  
 
(a)   94 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 1,259 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. The Company operates websites at www.menswearhouse.com, www.mooresclothingformen.com and www.kgstores.com.
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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(MEN’S WEARHOUSE LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
FOR THE THREE MONTHS ENDED
January 30, 2010 AND January 31, 2009

(In thousands, except per share data)
                                                         
    Three Months Ended     Variance  
            % of             % of                     Basis  
    2009     Sales     2008     Sales     Dollar     %     Points  
         
Net sales:
                                                       
Clothing product
  $ 390,140       85.33 %   $ 406,690       85.37 %   $ (16,550 )     (4.07 %)     0.05  
Tuxedo rental services
    35,380       7.74 %     35,806       7.52 %     (426 )     (1.19 %)     0.22  
Alteration and other services
    31,698       6.93 %     33,864       7.11 %     (2,166 )     (6.40 %)     (0.18 )
         
 
                                                       
Total net sales
    457,218       100.00 %     476,360       100.00 %     (19,142 )     (4.02 %)     0.00  
 
                                                       
Total cost of sales
    287,943       62.98 %     293,370       61.59 %     (5,427 )     (1.85 %)     1.39  
         
 
                                                       
Gross margin (a)
    169,275       37.02 %     182,990       38.41 %     (13,715 )     (7.49 %)     (1.39 )
 
                                                       
Selling, general and administrative expenses
    203,818       44.58 %     185,550       38.95 %     18,268       9.85 %     5.63  
         
 
                                                       
Operating loss
    (34,543 )     (7.56 %)     (2,560 )     (0.54 %)     (31,983 )     (1,249.34 %)     (7.02 )
 
                                                       
Net interest
    (153 )     (0.03 %)     (350 )     (0.07 %)     197       56.29 %     0.04  
         
 
                                                       
Loss before income taxes
    (34,696 )     (7.59 %)     (2,910 )     (0.61 %)     (31,786 )     (1,092.30 %)     (6.98 )
 
                                                       
Benefit for income taxes
    (15,778 )     (3.45 %)     (4,399 )     (0.92 %)     (11,379 )     (258.67 %)     (2.53 )
         
 
                                                       
Net earnings (loss)
  $ (18,918 )     (4.14 %)   $ 1,489       0.31 %   $ (20,407 )     (1,370.52 %)     (4.45 )
         
 
                                                       
Net earnings (loss) per diluted common share
  $ (0.36 )       $ 0.03                                  
 
                                                   
 
                                                       
Weighted average diluted common shares outstanding:
    52,297               52,037                                  
 
                                                   
 
(a)   Gross margin as a percentage of related sales:
                                                         
    Three Months Ended     Variance  
            % of             % of                     Basis  
    2009     Related Sales     2008     Related Sales     Dollar     %     Points  
Clothing margin
  $ 204,967       52.54 %   $ 218,819       53.80 %   $ (13,852 )     (6.33 %)     (1.27 )
Tuxedo margin
    27,967       79.05 %     25,860       72.22 %     2,107       8.15 %     6.82  
Alteration and other services margin
    7,985       25.19 %     11,307       33.39 %     (3,322 )     (29.38 %)     (8.20 )
Occupancy costs
    (71,644 )     (15.67 %)     (72,996 )     (15.32 %)     1,352       1.85 %     (0.35 )
         
Gross margin
  $ 169,275       37.02 %   $ 182,990       38.41 %   $ (13,715 )     (7.49 %)     (1.39 )
         

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

(Unaudited)
FOR THE TWELVE MONTHS ENDED
January 30, 2010 AND January 31, 2009

(In thousands, except per share data)
                                                         
    Twelve Months Ended     Variance  
            % of             % of                     Basis  
    2009     Sales     2008     Sales     Dollar     %     Points  
Net sales:
                                                       
Clothing product
  $ 1,447,386       75.80 %   $ 1,515,704       76.84 %   $ (68,318 )     (4.51 %)     (1.05 )
Tuxedo rental services
    334,068       17.49 %     329,951       16.73 %     4,117       1.25 %     0.77  
Alteration and other services
    128,121       6.71 %     126,763       6.43 %     1,358       1.07 %     0.28  
         
Total net sales
    1,909,575       100.00 %     1,972,418       100.00 %     (62,843 )     (3.19 %)     0.00  
 
                                                       
Total cost of sales
    1,111,849       58.22 %     1,121,906       56.88 %     (10,057 )     (0.90 %)     1.35  
         
 
                                                       
Gross margin (a)
    797,726       41.78 %     850,512       43.12 %     (52,786 )     (6.21 %)     (1.35 )
 
                                                       
Selling, general and administrative expenses
    729,522       38.20 %     760,041       38.53 %     (30,519 )     (4.02 %)     (0.33 )
         
 
                                                       
Operating income
    68,204       3.57 %     90,471       4.59 %     (22,267 )     (24.61 %)     (1.02 )
 
                                                       
Net interest
    (332 )     (0.02 %)     (1,708 )     (0.09 %)     1,376       80.56 %     0.07  
         
 
                                                       
Earnings before income taxes
    67,872       3.55 %     88,763       4.50 %     (20,891 )     (23.54 %)     (0.95 )
 
                                                       
Provision for income taxes
    22,364       1.17 %     29,919       1.52 %     (7,555 )     (25.25 %)     (0.35 )
         
 
                                                       
Net earnings
  $ 45,508       2.38 %   $ 58,844       2.98 %   $ (13,336 )     (22.66 %)     (0.60 )
         
 
                                                       
Net earnings per diluted common share (b)
  $ 0.86         $ 1.13                                  
 
                                                   
 
                                                       
Weighted average diluted common shares outstanding:
    52,280               51,944                                  
 
                                                   
 
(a)   Gross margin as a percentage of related sales:
                                                         
    Twelve Months Ended     Variance  
            % of             % of                     Basis  
    2009     Related Sales     2008     Related Sales     Dollar     %     Points  
         
Clothing margin
  $ 777,215       53.70 %   $ 843,075       55.62 %   $ (65,860 )     (7.81 %)     (1.92 )
Tuxedo margin
    276,651       82.81 %     270,436       81.96 %     6,215       2.30 %     0.85  
Alteration and other services margin
    33,532       26.17 %     30,598       24.14 %     2,934       9.59 %     2.03  
Occupancy costs
    (289,672 )     (15.17 %)     (293,597 )     (14.89 %)     3,925       1.34 %     (0.28 )
         
Gross margin
  $ 797,726       41.78 %   $ 850,512       43.12 %   $ (52,786 )     (6.21 %)     (1.35 )
         
 
(b)   Calculated based on net earnings less net earnings allocated to participating securities for the twelve months ended January 30, 2010.

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

(In thousands)
(Unaudited)
                 
    January 30,     January 31,  
    2010     2009  
ASSETS
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 186,018     $ 87,412  
Short-term investments
          17,121  
Accounts receivable, net
    16,745       16,315  
Inventories
    431,492       440,099  
Other current assets
    74,075       70,668  
 
           
 
               
Total current assets
    708,330       631,615  
Property and equipment, net
    344,746       387,472  
Tuxedo rental product, net
    102,479       96,691  
Goodwill
    59,414       57,561  
Other assets, net
    17,137       14,391  
 
           
 
               
Total assets
  $ 1,232,106     $ 1,187,730  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Accounts payable
  $ 83,052     $ 108,800  
Accrued expenses and other current liabilities
    117,047       111,404  
Income taxes payable
    23,936       19  
 
           
 
               
Total current liabilities
    224,035       220,223  
Long-term debt
    43,491       62,916  
Deferred taxes and other liabilities
    62,236       62,443  
 
           
 
               
Total liabilities
    329,762       345,582  
 
           
 
               
Shareholders’ equity:
               
Preferred stock
           
Common stock
    705       700  
Capital in excess of par
    327,742       315,404  
Retained earnings
    953,986       924,288  
Accumulated other comprehensive income
    32,537       14,292  
 
           
Total
    1,314,970       1,254,684  
 
               
Treasury stock, at cost
    (412,626 )     (412,536 )
 
           
 
               
Total shareholders’ equity
    902,344       842,148  
 
           
 
               
Total liabilities and equity
  $ 1,232,106     $ 1,187,730  
 
           
Page 7

 


 

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

(Unaudited)
FOR THE TWELVE MONTHS ENDED
January 30, 2010 AND January 31, 2009
(In thousands)
                 
    Twelve Months Ended  
    2009     2008  
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net earnings
  $ 45,508     $ 58,844  
Non-cash adjustments to net earnings:
               
Depreciation and amortization
    86,090       90,665  
Tuxedo rental product amortization
    37,184       38,180  
Asset impairment charges
    19,473       1,812  
Other
    (16,379 )     10,130  
Changes in assets and liabilities
    (8,721 )     (70,141 )
 
           
 
               
Net cash provided by operating activities
    163,155       129,490  
 
           
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (56,912 )     (88,225 )
Proceeds from sale of distribution facility
          9,588  
Purchases of available-for-sale investments
          (17,121 )
Proceeds from sales of available-for-sale investments
    19,410       59,921  
Other investing activities
    797       811  
 
           
 
               
Net cash used in investing activities
    (36,705 )     (35,026 )
 
           
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from issuance of common stock
    4,106       2,853  
Proceeds from revolving credit facility
          150,600  
Payments on revolving credit facility
    (25,000 )     (130,975 )
Payments on Canadian term loan
          (31,880 )
Cash dividends paid
    (14,722 )     (14,600 )
Purchase of treasury stock
    (90 )     (156 )
Other financing activities
    (1,242 )     (1,261 )
 
           
 
               
Net cash used in financing activities
    (36,948 )     (25,419 )
 
           
 
               
Effect of exchange rate changes
    9,104       (21,079 )
 
           
 
               
INCREASE IN CASH AND CASH EQUIVALENTS
    98,606       47,966  
Balance at beginning of period
    87,412       39,446  
 
           
Balance at end of period
  $ 186,018     $ 87,412  
 
           
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