EX-99.1 2 h73742exv99w1.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 2010 FIRST QUARTER RESULTS
  Q1 2010 GAAP diluted EPS was $0.26 compared with Q1 2009 GAAP diluted EPS of $0.10
 
  Company provides guidance for second quarter of fiscal 2010
 
  Conference call at 5:00 pm Eastern today
HOUSTON — June 9, 2010 — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended May 1, 2010.
First Quarter Sales Summary — Fiscal 2010
                                         
                            Comparable Store Sales
    U.S. dollars, in millions   Total Sales   Change %
    Current Year   Prior Year   Change %   Current Year   Prior Year
Total Company
  $ 473.5     $ 464.1       2.0 %                
MW
  $ 318.3 (a)   $ 310.9 (a)     2.4 %     2.4 %(b)     - 7.0 %(b)
K&G
  $ 98.3     $ 104.5       -6.0 %     - 4.9 %     2.3 %
United States
  $ 426.1     $ 425.0       0.2 %     0.5 %     - 4.7 %
Moores
  $ 47.4     $ 39.1       21.3 %     0.2 %(c)     - 4.3 %(c)
 
(a)   Total sales from retail stores and ecommerce.
 
(b)   Comparable store sales do not include ecommerce.
 
(c)   Comparable store sales change is based on the Canadian dollar.
Diluted earnings per share were $0.26 for the first quarter ended May 1, 2010. This compares to diluted earnings per share guidance given March 10, 2010 of $0.12 to $0.16. Prior year first quarter GAAP diluted earnings per share were $0.10.

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FIRST QUARTER REVIEW
    Total Company sales increased 2.0% for the quarter.
    Clothing product sales, representing 77.8% of fiscal first quarter 2010 total net sales, increased 2.6% due mainly to a favorable change in the U.S./Canadian dollar exchange rate and an increase in Men’s Wearhouse comparable store sales resulting from increased store traffic levels.
 
    Tuxedo rental sales, representing 15.2% of fiscal first quarter 2010 total net sales, increased 1.0%.
    Gross margin before occupancy costs, as a percentage of total net sales, increased 105 basis points from 56.1% to 57.2%. Clothing product margins, as a percentage of related sales, increased 122 basis points due primarily to different promotional offerings, as well as the mix of products on promotion, in 2010 compared to 2009 and lower product costs. Tuxedo rental margins, as a percentage of related sales, increased 115 basis points due primarily to lower product costs.
 
    Occupancy costs decreased, as a percentage of total net sales, by 92 basis points from 15.6% to 14.7%. On an absolute dollar basis, occupancy costs decreased 4.0% from $72.6 million in the prior year to $69.7 million due primarily to lower depreciation costs.
 
    Selling, general, and administrative expenses were $179.7 million in the current year and increased 0.2% from the prior year’s SG&A of $179.2. As a percentage of total net sales, SG&A decreased 67 basis points from 38.6% to 37.9%.
 
    Operating income was $21.4 million or 4.5% of total net sales compared to operating income of $8.8 million or 1.9% of total net sales for the same period last year.
 
    Cash and cash equivalent balances as of the end of the first quarter of 2010 were $219.6 million.
 
    Total inventories of $435.4 million declined 2.8% from the prior year first quarter of $448.0 million.
 
    Current maturities of long-term debt were $45.8 million as of the end of the first quarter of 2010.

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SECOND QUARTER 2010 GUIDANCE
    For the second quarter of the fiscal year, the Company expects GAAP diluted earnings per share in a range of $0.75 to $0.78.
 
    The Company anticipates comparable store sales at its MW stores to increase in the low single digit range, at K&G a decrease in the low to mid single digit range and at Moores a flat to low single digit increase. Included in this outlook is a low double digit increase in comparable store tuxedo rental revenues.
 
    Total gross profit for the second quarter is expected to increase in the high 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 high single digit range from the prior year excluding the $3.2 million gift card breakage income recognized in the prior year second quarter. SG&A expenses excluding marketing expenses are expected to increase in the mid single digit range over the adjusted prior year quarter.
 
    This guidance includes an estimated effective tax rate of 37.5% for the second quarter and an estimated effective tax rate of 36.0% for the full year.
 
    Fully diluted shares outstanding of 52.765 million are estimated for the second quarter.
UPDATED CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 p.m. Eastern time on Wednesday, June 9, 2010, Company management will host a conference call and real time web cast to review the fiscal first quarter and its outlook for the second quarter of fiscal 2010.
To access the conference call, dial 480-629-9770. 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 June 16, 2010 by calling 303-590-3030 and entering the access code of 4307183#, or a webcast archive will be available free on the website for approximately 90 days.

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STORE INFORMATION
                                                 
    May 1, 2010   May 2, 2009   January 30, 2010
    Number   Sq. Ft.   Number   Sq. Ft.   Number   Sq. Ft.
    of Stores   (000’s)   of Stores   (000’s)   of Stores   (000’s)
Men’s Wearhouse
    582       3,292.7       581       3,276.7       581       3,284.4  
Men’s Wearhouse and Tux
    447       614.1       478       651.9       454       623.4  
Moores, Clothing for Men
    117       735.5       117       732.7       117       734.6  
K&G (a)
    106       2,465.6       108       2,488.4       107       2,475.6  
Total
    1,252       7,107.9       1,284       7,149.7       1,259       7,118.0  
 
(a)   95, 94 and 94 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 1,252 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 fiscal year ended January 30, 2010.
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
May 1, 2010 AND May 2, 2009

(In thousands, except per share data)
                                                         
    Three Months Ended     Variance  
            % of             % of                     Basis  
    2010     Sales     2009     Sales     Dollar     %     Points  
         
 
                                                       
Net sales:
                                                       
Clothing product
  $ 368,371       77.80 %   $ 359,062       77.36 %   $ 9,309       2.59 %     0.44  
Tuxedo rental services
    72,154       15.24 %     71,419       15.39 %     735       1.03 %     (0.15 )
Alteration and other services
    32,941       6.96 %     33,653       7.25 %     (712 )     (2.12 %)     (0.29 )
         
Total net sales
    473,466       100.00 %     464,134       100.00 %     9,332       2.01 %     0.00  
 
                                                       
Total cost of sales
    272,394       57.53 %     276,145       59.50 %     (3,751 )     (1.36 %)     (1.96 )
         
 
                                                       
Gross margin (a)
    201,072       42.47 %     187,989       40.50 %     13,083       6.96 %     1.96  
 
                                                       
Selling, general and administrative expenses
    179,650       37.94 %     179,213       38.61 %     437       0.24 %     (0.67 )
         
 
                                                       
Operating income
    21,422       4.52 %     8,776       1.89 %     12,646       144.10 %     2.63  
 
                                                       
Net interest
    (225 )     (0.05 %)     (160 )     (0.03 %)     (65 )     (40.63 %)     (0.01 )
         
 
                                                       
Earnings before income taxes
    21,197       4.48 %     8,616       1.86 %     12,581       146.02 %     2.62  
 
                                                       
Provision for income taxes
    7,589       1.60 %     3,360       0.72 %     4,229       125.86 %     0.88  
         
 
                                                       
Net earnings
  $ 13,608       2.87 %   $ 5,256       1.13 %   $ 8,352       158.90 %     1.74  
         
 
                                                       
Net earnings per diluted common share (b)
  $ 0.26             $ 0.10                                  
 
                                                   
 
                                                       
Weighted average diluted common shares outstanding:
    52,628               51,955                                  
 
                                                   
 
(a)   Gross margin as a percentage of related sales:
                                                         
    Three Months Ended        
            % of             % of     Variance  
            Related             Related                     Basis  
    2010     Sales     2009     Sales     Dollar     %     Points  
         
Clothing margin
  $ 201,058       54.58 %   $ 191,605       53.36 %   $ 9,453       4.93 %     1.22  
Tuxedo margin
    60,828       84.30 %     59,387       83.15 %     1,441       2.43 %     1.15  
Alteration and other services margin
    8,877       26.95 %     9,563       28.42 %     (686 )     (7.17 %)     (1.47 )
Occupancy costs
    (69,691 )     (14.72 %)     (72,566 )     (15.63 %)     2,875       3.96 %     0.92  
         
Gross margin
  $ 201,072       42.47 %   $ 187,989       40.50 %   $ 13,083       6.96 %     1.96  
         
 
(b)   Calculated based on net earnings less net earnings allocated to participating securities.

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

(In thousands)
(Unaudited)
                 
    May 1,     May 2,  
    2010     2009  
 
               
ASSETS
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 219,562     $ 107,538  
Short-term investments
          17,707  
Accounts receivable, net
    24,640       24,858  
Inventories
    435,351       448,018  
Other current assets
    68,830       59,752  
 
           
 
               
Total current assets
    748,383       657,873  
Property and equipment, net
    336,771       378,510  
Tuxedo rental product, net
    101,731       120,083  
Goodwill
    60,780       57,622  
Other assets, net
    16,690       12,439  
 
           
 
               
Total assets
  $ 1,264,355     $ 1,226,527  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Accounts payable
  $ 99,720     $ 142,984  
Accrued expenses and other current liabilities
    136,183       127,868  
Income taxes payable
    2,826       3,461  
Current maturities of long-term debt
    45,780        
 
           
 
               
Total current liabilities
    284,509       274,313  
Long-term debt
          39,213  
Deferred taxes and other liabilities
    62,741       63,955  
 
           
 
               
Total liabilities
    347,250       377,481  
 
           
 
               
Shareholders’ equity:
               
Preferred stock
           
Common stock
    707       702  
Capital in excess of par
    329,030       316,034  
Retained earnings
    962,834       925,881  
Accumulated other comprehensive income
    37,304       19,055  
Treasury stock, at cost
    (412,770 )     (412,626 )
 
           
 
               
Total shareholders’ equity
    917,105       849,046  
 
           
 
               
Total liabilities and equity
  $ 1,264,355     $ 1,226,527  
 
           

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

(Unaudited)
FOR THE THREE MONTHS ENDED
May 1, 2010 AND May 2, 2009

(In thousands)
                 
    Three Months Ended  
    2010     2009  
 
               
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net earnings
  $ 13,608     $ 5,256  
Non-cash adjustments to net earnings:
               
Depreciation and amortization
    18,690       22,222  
Tuxedo rental product amortization
    6,978       7,644  
Other
    9,335       7,867  
Changes in assets and liabilities
    663       20,313  
 
           
 
               
Net cash provided by operating activities
    49,274       63,302  
 
           
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (11,099 )     (15,035 )
 
           
 
               
Net cash used in investing activities
    (11,099 )     (15,035 )
 
           
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from issuance of common stock
    783       506  
Payments on revolving credit facility
          (25,000 )
Cash dividends paid
    (4,756 )     (3,664 )
Other financing activities
    (2,037 )     (1,697 )
 
           
 
               
Net cash used in financing activities
    (6,010 )     (29,855 )
 
           
 
               
Effect of exchange rate changes
    1,379       1,714  
 
           
 
               
INCREASE IN CASH AND CASH EQUIVALENTS
    33,544       20,126  
Balance at beginning of period
    186,018       87,412  
 
           
Balance at end of period
  $ 219,562     $ 107,538  
 
           

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