EX-99.1 2 h44357exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
     
The Men’s Wearhouse, Inc.   (MEN’S WEARHOUSE LOGO)
     
News Release   For Immediate Release
MEN’S WEARHOUSE REPORTS FISCAL 2006
FOURTH QUARTER AND YEAR END RESULTS
BOARD OF DIRECTORS APPROVES
INCREASED QUARTERLY DIVIDEND
  Q4 2006 GAAP diluted EPS was $0.95 versus $0.60 in 2005
  Fiscal 2006 GAAP diluted EPS was $2.71 versus $1.88 in 2005
  Company estimates fiscal 2007 GAAP diluted EPS in a range of $2.80 to $2.91
  Conference call at 5:00 pm eastern today
HOUSTON – March 7, 2007 – The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the fourth quarter and 53-week year ended February 3, 2007. The results include an extra week in fiscal 2006 as well as other significant items, which are outlined in the attached reconciliation table. In addition, the company’s board of directors approved a quarterly dividend of $0.06 per share payable on July 6, 2007 to shareholders of record on June 27, 2007. The previous quarterly dividend amount was $0.05 per share.
George Zimmer, founder, chairman, and chief executive officer, stated, “Fiscal 2006 represented yet another year of outstanding results for all of our stakeholders. In November 2006, we announced entering into an agreement to acquire After Hours Formalwear, a $250 million tuxedo rental revenue company which is currently expected to close in the first half of fiscal 2007. Also in November 2006, we elected to redeem and retire our $130 million convertible bond indebtedness thereby strengthening our balance sheet. In January 2007, we were named once again by FORTUNE® magazine as one of the 100 Best Companies to Work for In America. Lastly, the Board of Directors has approved a 20% increase in the company’s quarterly cash dividend from $0.05 per share to $0.06 per share.”

Page 1


 

FOURTH QUARTER RESULTS
                                         
    Fourth Quarter Sales Summary – Fiscal 2006        
                    Total Sales     Comparable Store Sales  
    U.S. dollars, in millions     Change %     Change %  
    Current Year                     Current Year        
    (A)     Prior Year             (A)     Prior Year  
 
Total Company
  $ 556.8     $ 497.0       + 12.0 %                
 
TMW
  $ 351.5     $ 319.3       + 10.1 %     0.0 %     + 5.1 %
 
K&G
  $ 130.1     $ 113.9       + 14.2 %     - 6.1 %     + 9.3 %
 
United States
  $ 486.7     $ 437.4       + 11.3 %     - 1.5 %     + 6.1 %
 
Moores (C$)
  $ 80.8     $ 69.6       + 16.1 %     + 9.8 %     + 0.9 %
 
(A)   The company follows the retail 4-5-4 reporting calendar which includes an extra week in the fourth quarter of fiscal 2006. Total Company sales on a 13-week basis increased 5.7% from $497.0 to $525.1.
Fourth quarter 2006 operating income was $73.2 million compared to $55.6 million last year, and net income was $52.3 million compared to $32.7 million last year. GAAP diluted earnings per share were $0.95 for the fourth quarter ended February 3, 2007 compared to $0.60 last year. Adjusted diluted earnings per share for the 2006 fiscal fourth quarter was $0.81 per share compared to adjusted diluted earnings per share of $0.67 last year. For additional information regarding adjusted diluted earnings per share, please see the table included below as well as the non-GAAP reconciliations provided at the end of this release.
Fourth Quarter Highlights
  Total company sales increased 12.0% for the quarter, including this year’s 53rd week and 5.7% on a 13-week basis. Apparel sales, representing 90.8% of total sales, increased 10.6%. Tuxedo rental revenues, representing 2.7% of total sales, increased 26.1%.
  Comparable store sales declined 1.5% for the company’s United States based stores, below the initial guidance of +1% to +2%. This under plan performance stems from soft traffic levels which are reflected in soft tailored clothing sales. On a two year basis, comparable store sales increased 4.6%.
  Comparable store sales increased 9.8% for the company’s Canadian based stores, ahead of initial guidance in the +2% to +4% range. This above plan performance is a reflection of strong increases in both traffic levels and average ticket. On a two year basis, comparable store sales increased 10.7%.
  Gross profit, as a percentage of sales, increased 331 basis points from 41.29% to 44.60%. Above plan comparable sales in Canada, generally better maintained merchandise margins in both the U.S. and Canada, and a stronger than expected 53rd week of the year more than offset the impact of under plan comparable store sales results in the U.S.
  Selling, general, and administrative expenses as a percentage of sales increased 135 basis points from 30.11% to 31.46%; however this increase was lower than plan, primarily as a result of lower advertising, payroll, and employee healthcare expenses.

Page 2


 

  The effective tax rate for the quarter of 28.7% was substantially lower than the previously anticipated level of 36.0%. This was due to favorable developments on certain outstanding income tax matters.
  During the quarter the company repurchased 764,600 shares for a total of $28.8 million.
YEAR-TO-DATE RESULTS
                                         
    Sales Summary – Fiscal 2006        
                    Total Sales     Comparable Store Sales  
    U.S. dollars, in millions     Change %     Change %  
    Current Year                     Current Year        
    (B)     Prior Year             (B)     Prior Year  
 
Total Company
  $ 1,882.1     $ 1,724.9       + 9.1 %                
 
TMW
  $ 1,216.2     $ 1,129.0       + 7.7 %     + 3.1 %     + 6.2 %
 
K&G
  $ 418.3     $ 384.2       + 8.9 %     - 1.8 %     + 16.4 %
 
United States
  $ 1,653.5     $ 1,531.4       + 8.0 %     + 1.9 %     + 8.4 %
 
Moores (C$)
  $ 259.3     $ 232.9       + 11.3 %     + 8.7 %     + 2.7 %
 
(B)   The company follows the retail 4-5-4 reporting calendar which includes an extra week in fiscal 2006. Total Company sales on a 52-week basis increased 7.3% from $1,724.9 to $1,850.3.
2006 operating income was $223.9 million compared to $165.3 million last year, and net income was $148.6 million compared to $103.9 million last year. GAAP diluted earnings per share were $2.71 for the year ended February 3, 2007 compared to $1.88 last year. Adjusted diluted earnings per share for fiscal 2006 were $2.63 per share compared to adjusted diluted earnings per share of $2.04 last year. For additional information regarding adjusted diluted earnings per share, please see the table included below as well as the non-GAAP reconciliations provided at the end of this release.
2007 GUIDANCE AND HIGHLIGHTS
For the fiscal year ending February 2, 2008, the company expects GAAP diluted earnings per share in a range of $2.80 to $2.91 based on a +1% to +2% same store sales increase in the U.S. and +3% to +4% in Canada, an effective tax rate of approximately 37.55% and fully diluted shares outstanding of 54.6 million. The 2007 guidance and highlights do not give effect to the After Hours acquisition.
Forecasted operating highlights for the full year include the following:
  New store growth includes up to 15 net new K&G stores and 19 net new Men’s Wearhouse stores. Total square footage growth is expected in the mid to high single digit range.
  Total sales for fiscal 2007 on a comparable 52 week basis are expected to increase in a range of 5% to 7% over the prior fiscal year.
  Gross margins are planned to continue to increase and stem largely from the company’s ongoing strategy of increasing the penetration of its private label apparel product offerings and growth in tuxedo rentals.

Page 3


 

  Selling, general, and administrative expenses, as a percentage of sales, are expected to be flat year over year. Expense leverage is expected in advertising and payroll; however it is being offset by increases in stock based compensation and general corporate overhead expenses.
  Operating income margins, on a comparable 52 week year basis, are anticipated to increase in the range of 50 to 90 basis points over the prior year.
For the first quarter of 2007, the company expects +1% to +2% same store sales growth in the U.S. and +5% to +6% in Canada and GAAP diluted earnings per share to be in the range of $0.63 to $0.67. In 2007, the start of the company’s fiscal calendar is later than in the past because of last year’s 53rd week. This late start means that the seasonal peak period (fiscal month of May) for the company’s tuxedo rentals business will shift one week earlier in the fiscal calendar and therefore is expected to benefit the company’s first quarter at the expense of the second quarter.
IMPACT OF SIGNIFICANT ITEMS
In order to aid investors’ understanding of the company’s results and to improve comparability of financial information from period to period, explanatory non-GAAP reconciliation tables are included at the end of this press release. Summarized earnings per share information from these tables follows:
Summary Reconciliation of GAAP diluted EPS to Adjusted diluted EPS
                                                                                                       
    UNAUDITED HISTORICAL RESULTS (1)     GUIDANCE  
    Fiscal 2005     Fiscal 2006     Fiscal 2007  
    1Q     2Q     3Q     4Q       YR     1Q     2Q     3Q     4Q       YR     1Q       YR  
GAAP Diluted EPS
    0.41       0.43       0.44       0.60         1.88       0.53       0.65       0.58       0.95         2.71       0.63 - 0.67         2.80 - 2.91  
 
                                                                                                     
Adjustments (2)
                                                                                                     
Eddie Rodriguez Costs (3)
    0.05       0.06                         0.11                                                              
Stock Based Compensation (4)
                                                                                                     
Reported in Earnings
            0.01       0.01       0.01         0.03       0.02       0.02       0.02       0.02         0.08       0.02         0.09  
53rd Week Impact (5)
                                                                      (0.08 )       (0.08 )                  
Foreign Earnings Repatriation (6)
                            0.07         0.07                                                              
Discrete Tax Items (7)
                    (0.04 )     (0.02 )       (0.05 )                             (0.09 )       (0.09 )                  
 
                                                                             
Net Adjustments
    0.05       0.07       (0.02 )     0.07         0.17       0.02       0.02       0.02       (0.14 )       (0.08 )     0.02         0.09  
 
                                                                             
 
                                                                                                     
Adjusted Diluted EPS
    0.46       0.50       0.41       0.67         2.04       0.55       0.67       0.60       0.81         2.63       0.65 - 0.69         2.89 - 3.00  
 
                                                                             
 
(1)   Due to the effect of rounding, the sum of the per share amounts may not equal the effect of the adjustments.
 
(2)   Net of tax.
 
(3)   The company ceased operating its test of the new retail concept “Eddie Rodriguez” in the second quarter of fiscal 2005.
 
(4)   In fiscal 2005 and 2006, the company did not grant non-qualified stock options (NQO’s) to key employees, opting instead to issue primarily deferred stock units (DSU’s). In 2006, the company began recognizing stock option expense as it adopted FASB No. 123R. Amounts reported in earnings for 2005 include primarily DSU’s and for 2006 and later periods include DSU’s and NQO’s.
 
(5)   Fiscal 2006 includes one additional week (for a total of 53 weeks) as the company reports its fiscal operations on a retail calendar.
 
(6)   The company incurred a one-time tax expense of $3.9 million ($0.07 per share) related to the repatriation of foreign earnings under the provisions of the American Jobs Creation Act.
 
(7)   Adjustments to tax reserves associated with favorable developments on certain outstanding income tax matters.

Page 4


 

CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 p.m. Eastern time today, company management will host a conference call and real time web cast to review the results for the fiscal fourth quarter and full year 2006 and provide an outlook for fiscal 2007.
To access the conference call, dial 303-262-2142. To access the live webcast presentation, visit the Investor Relations section of the company’s website at www.tmw.com. A telephonic replay will be available through March 22nd by calling 303-590-3000 and entering the access code of 11082837#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
                                 
    February 3, 2007 January 28, 2006  
    Number     Sq. Ft.     Number     Sq. Ft.  
    of Stores     (000’s)     of Stores     (000’s)  
 
Men’s Wearhouse
    543       3,014.8       526       2,898.4  
 
 
                               
Moores, Clothing for Men
    116       722.7       116       719.8  
 
 
                               
K&G (C)
    93       2,201.6       77       1,835.2  
 
 
                               
Total
    752       5,939.1       719       5,453.4  
 
(C)   73 and 52 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 752 stores. The stores carry a full selection of designer, brand name and private label suits, sport coats, furnishings and accessories, including tuxedo rentals available in the Men’s Wearhouse and Moores 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 unfavorable local, regional and national economic developments, disruption in retail buying trends due to homeland security concerns, severe weather conditions, aggressive advertising or marketing activities of competitors, governmental actions and other factors described herein and in the company’s annual report on Form 10-K for the year ended January 28, 2006 and subsequent Forms 10-Q.
For additional information on Men’s Wearhouse, please visit the company’s website at www.tmw.com.
CONTACT: Neill Davis, EVP & CFO, Men’s Wearhouse (713) 592-7200
Ken Dennard, DRG&E (713) 529-6600

Page 5


 

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

(Unaudited)
FOR THE THREE MONTHS ENDED
February 3, 2007 AND January 28, 2006

(In thousands, except per share data)
                                 
    Three Months Ended  
            % of             % of  
    2006     Sales     2005     Sales  
     
Net sales
  $ 556,845       100.00 %   $ 496,978       100.00 %
Cost of goods sold, including buying, distribution and occupancy costs
    308,470       55.40 %     291,751       58.71 %
     
Gross margin
    248,375       44.60 %     205,227       41.29 %
 
                               
Selling, general and administrative expenses
    175,187       31.46 %     149,658       30.11 %
     
 
                               
Operating income
    73,188       13.14 %     55,569       11.18 %
 
                               
Interest income
    (2,537 )     (0.46 %)     (1,158 )     (0.23 %)
Interest expense
    2,390       0.43 %     1,461       0.29 %
     
 
Earnings before income taxes
    73,335       13.17 %     55,266       11.12 %
 
                               
Provision for income taxes
    21,011       3.77 %     22,532       4.53 %
     
 
                               
Net earnings
  $ 52,324       9.40 %   $ 32,734       6.59 %
     
 
                               
Net earnings per share:
                               
Basic
  $ 0.99             $ 0.62          
 
                           
Diluted
  $ 0.95             $ 0.60          
 
                           
 
                               
Weighted average common shares outstanding:
                               
Basic
    52,965               52,862          
 
                           
Diluted
    54,843               54,166          
 
                           

Page 6


 

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

(Unaudited)
FOR THE TWELVE MONTHS ENDED
February 3, 2007 AND January 28, 2006

(In thousands, except per share data)
                                 
    Twelve Months Ended  
            % of             % of  
    2006     Sales     2005     Sales  
     
Net sales
  $ 1,882,064       100.00 %   $ 1,724,898       100.00 %
Cost of goods sold, including buying, distribution and occupancy costs
    1,066,359       56.66 %     1,027,763       59.58 %
     
Gross margin
    815,705       43.34 %     697,135       40.42 %
 
                               
Selling, general and administrative expenses
    591,767       31.44 %     531,839       30.83 %
     
 
Operating income
    223,938       11.90 %     165,296       9.58 %
 
                               
Interest income
    (9,786 )     (0.52 %)     (3,280 )     (0.19 %)
Interest expense
    9,216       0.49 %     5,888       0.34 %
     
 
Earnings before income taxes
    224,508       11.93 %     162,688       9.43 %
 
                               
Provision for income taxes
    75,933       4.03 %     58,785       3.41 %
     
 
                               
Net earnings
  $ 148,575       7.89 %   $ 103,903       6.02 %
     
 
                               
Net earnings per share:
                               
Basic
  $ 2.80             $ 1.93          
 
                           
Diluted
  $ 2.71             $ 1.88          
 
                           
 
                               
Weighted average common shares outstanding:
                               
Basic
    53,111               53,753          
 
                           
Diluted
    54,749               55,365          
 
                           

Page 7


 

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

(In thousands)
(Unaudited)
                 
    February 3,     January 28,  
    2007     2006  
                          ASSETS
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 179,694     $ 200,226  
Short-term investments
          62,775  
Inventories
    448,586       416,603  
Other current assets
    52,549       50,008  
 
           
 
               
Total current assets
    680,829       729,612  
Property and equipment, net
    289,640       269,586  
Goodwill
    56,867       57,601  
Other assets, net
    69,616       66,475  
 
           
 
               
Total assets
  $ 1,096,952     $ 1,123,274  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities
  $ 226,138     $ 238,085  
Long-term debt
    72,967       205,251  
Deferred taxes and other liabilities
    44,075       52,405  
Shareholders’ equity
    753,772       627,533  
 
           
 
               
Total liabilities and equity
  $ 1,096,952     $ 1,123,274  
 
           

Page 8


 

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

(Unaudited)
FOR THE TWELVE MONTHS ENDED
February 3, 2007 AND January 28, 2006

(In thousands)
                 
    Twelve Months Ended  
    2006     2005  
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net earnings
  $ 148,575     $ 103,903  
Non-cash adjustments to net earnings:
               
Depreciation and amortization
    61,387       61,874  
Other
    27,002       18,558  
Changes in assets and liabilities
    (76,170 )     (29,774 )
 
           
 
               
Net cash provided by operating activities
    160,794       154,561  
 
           
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (72,904 )     (66,499 )
Purchases of available-for-sale investments
    (279,120 )     (106,850 )
Proceeds from sales of available-for-sale investments
    341,895       44,075  
Other
    (1,506 )     (141 )
 
           
 
               
Net cash used in investing activities
    (11,635 )     (129,415 )
 
           
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Cash dividends paid
    (10,830 )      
Bank borrowings
          71,695  
Principal payments on debt
    (130,000 )      
Proceeds from issuance of common stock
    10,823       24,262  
Purchase of treasury stock
    (40,289 )     (90,280 )
Other
    2,052       (556 )
 
           
 
               
Net cash provided by (used in) financing activities
    (168,244 )     5,121  
 
           
 
               
Effect of exchange rate changes
    (1,447 )     4,951  
 
           
 
               
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    (20,532 )     35,218  
Balance at beginning of period
    200,226       165,008  
 
           
Balance at end of period
  $ 179,694     $ 200,226  
 
           

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(A Non-GAAP Financial Measure)

(In thousands, except per share amounts)
Use of Non-GAAP Financial Measures
We have provided non-GAAP adjusted earnings per share information. This non-GAAP financial information is provided to enhance the user’s overall understanding of the company’s current financial performance. Specifically, we believe the non-GAAP adjusted results provide useful information to both management and investors by excluding certain expense items that we believe are not indicative of our core operating results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. The following are the reconciliations of this non-GAAP information. Due to the effect of rounding, the sum of the individual per share amounts may not equal the total shown.
Non-GAAP Financial Measures (in thousands, except per share information)
                         
    Three Months Ended April 30, 2005  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 411,649     $ (1,006 )   $ 410,643  
Cost of goods sold, including buying, distribution and occupancy costs
    245,866       (1,631 )     244,235  
 
                 
Gross margin
    165,783       625       166,408  
Selling, general and administrative expenses
    128,909       (4,036 )     124,873  
 
                 
Operating Income
    36,874       4,661       41,535  
Interest income
    (794 )           (794 )
Interest expense
    1,487             1,487  
 
                 
Earnings before income taxes
    36,181       4,661       40,842  
Provision for income taxes
    13,477       1,736       15,213  
 
                 
Net earnings
  $ 22,704     $ 2,925     $ 25,629  
 
                 
Net earnings per diluted share
  $ 0.41     $ 0.05     $ 0.46  
 
                 
Weighted average diluted common shares outstanding
    55,834               55,834  
 
                   
 
(1)   The net earnings adjustments are as follows:
  a.   $2.886 million, net of tax, or $.05 diluted earnings per share in net losses from the Eddie Rodriguez stores and
 
  b.   $39 thousand, net of tax, related to stock based compensation.

Page 10


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended June 30, 2005  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 423,576     $ (785 )   $ 422,791  
Cost of goods sold, including buying, distribution and occupancy costs
    255,280       (3,485 )     251,795  
 
                 
Gross margin
    168,296       2,700       170,996  
Selling, general and administrative expenses
    129,892       (3,495 )     126,397  
 
                 
Operating Income
    38,404       6,195       44,599  
Interest income
    (771 )           (771 )
Interest expense
    1,512             1,512  
 
                 
Earnings before income taxes
    37,663       6,195       43,858  
Provision for income taxes
    13,277       2,183       15,460  
 
                 
Net earnings
  $ 24,386     $ 4,012     $ 28,398  
 
                 
Net earnings per diluted share
  $ 0.43     $ 0.07     $ 0.50  
 
                 
Weighted average diluted common shares outstanding
    56,490               56,490  
 
                   
                         
    Three Months Ended October 29, 2005  
            (2)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 392,695     $     $ 392,695  
Cost of goods sold, including buying, distribution and occupancy costs
    234,866             234,866  
 
                 
Gross margin
    157,829             157,829  
Selling, general and administrative expenses
    123,380       (928 )     122,452  
 
                 
Operating Income
    34,449       928       35,377  
Interest income
    (557 )           (557 )
Interest expense
    1,428             1,428  
 
                 
Earnings before income taxes
    33,578       928       34,506  
Provision for income taxes
    9,499       2,278       11,777  
 
                 
Net earnings
  $ 24,079     $ (1,350 )   $ 22,729  
 
                 
Net earnings per diluted share
  $ 0.44     $ (0.02 )   $ 0.41  
 
                 
Weighted average diluted common shares outstanding
    54,971               54,971  
 
                   
 
(1)   The net earnings adjustments are as follows:
  a.   $3.379 million, net of tax, or $0.06 diluted earnings per share in net losses from the Eddie Rodriguez stores and
 
  b.   $633 thousand, net of tax, or $0.01 diluted earnings per share related to stock based compensation.
(2)   The net earnings adjustments are as follows:
  a.   $666 thousand, net of tax, or $0.01 diluted earnings per share related to stock based compensation and
 
  b.   ($2.016) million or ($0.04) diluted earnings per share in discrete tax items.

Page 11


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended January 28, 2006  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 496,978     $     $ 496,978  
Cost of goods sold, including buying, distribution and occupancy costs
    291,751             291,751  
 
                 
Gross margin
    205,227             205,227  
Selling, general and administrative expenses
    149,658       (939 )     148,719  
 
                 
Operating Income
    55,569       939       56,508  
Interest income
    (1,158 )           (1,158 )
Interest expense
    1,461             1,461  
 
                 
Earnings before income taxes
    55,266       939       56,205  
Provision for income taxes
    22,532       (2,631 )     19,901  
 
                 
Net earnings
  $ 32,734     $ 3,570     $ 36,304  
 
                 
Net earnings per diluted share
  $ 0.60     $ 0.07     $ 0.67  
 
                 
Weighted average diluted common shares outstanding
    54,166               54,166  
 
                   
                         
    Twelve Months Ended January 28, 2006  
            (2)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 1,724,898     $ (1,791 )   $ 1,723,107  
Cost of goods sold, including buying, distribution and occupancy costs
    1,027,763       (5,116 )     1,022,647  
 
                 
Gross margin
    697,135       3,325       700,460  
Selling, general and administrative expenses
    531,839       (9,398 )     522,441  
 
                 
Operating Income
    165,296       12,723       178,019  
Interest income
    (3,280 )           (3,280 )
Interest expense
    5,888             5,888  
 
                 
Earnings before income taxes
    162,688       12,723       175,411  
Provision for income taxes
    58,785       3,566       62,351  
 
                 
Net earnings
  $ 103,903     $ 9,157     $ 113,060  
 
                 
Net earnings per diluted share
  $ 1.88     $ 0.17     $ 2.04  
 
                 
Weighted average diluted common shares outstanding
    55,365               55,365  
 
                   
 
(1)   The net earnings adjustments are as follows:
  a.   $556 thousand, net of tax, or $0.01 diluted earnings per share related to stock based compensation
 
  b.   ($898) thousand or ($0.02) diluted earnings per share in discrete tax items and
 
  c.   $3.912 million or $0.07 diluted earnings per share in foreign earnings repatriation tax expense.
(2)   The net earnings adjustments are as follows:
  a.   $6.265 million, net of tax, or $0.11 diluted earnings per share in net losses from the Eddie Rodriguez stores
 
  b.   $1.894 million, net of tax, or $0.03 diluted earnings per share related to stock based compensation
 
  c.   ($2.914) million or ($0.05) diluted earnings per share in discrete tax items and
 
  d.   $3.912 million or $0.07 diluted earnings per share in foreign earnings repatriation tax expense.

Page 12


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended April 29, 2006  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 434,564     $     $ 434,564  
Cost of goods sold, including buying, distribution and occupancy costs
    251,735       (143 )     251,592  
 
                 
Gross margin
    182,829       143       182,972  
Selling, general and administrative expenses
    136,441       (1,485 )     134,956  
 
                 
Operating Income
    46,388       1,628       48,016  
Interest income
    (1,995 )           (1,995 )
Interest expense
    2,191             2,191  
 
                 
Earnings before income taxes
    46,192       1,628       47,820  
Provision for income taxes
    17,336       611       17,947  
 
                 
Net earnings
  $ 28,856     $ 1,017     $ 29,873  
 
                 
Net earnings per diluted share
  $ 0.53     $ 0.02     $ 0.55  
 
                 
Weighted average diluted common shares outstanding
    54,719               54,719  
 
                   
 
(1)   The adjustments are related to stock based compensation.
                         
    Three Months Ended July 29, 2006  
            (2)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 460,587     $     $ 460,587  
Cost of goods sold, including buying, distribution and occupancy costs
    261,464       (178 )     261,286  
 
                 
Gross margin
    199,123       178       199,301  
Selling, general and administrative expenses
    143,529       (1,542 )     141,987  
 
                 
Operating Income
    55,594       1,720       57,314  
Interest income
    (2,793 )           (2,793 )
Interest expense
    2,289             2,289  
 
                 
Earnings before income taxes
    56,098       1,720       57,818  
Provision for income taxes
    20,477       628       21,105  
 
                 
Net earnings
  $ 35,621     $ 1,092     $ 36,713  
 
                 
Net earnings per diluted share
  $ 0.65     $ 0.02     $ 0.67  
 
                 
Weighted average diluted common shares outstanding
    54,524               54,524  
 
                   
 
(2)   The adjustments are related to stock based compensation.

Page 13


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended October 28, 2006  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 430,068     $     $ 430,068  
Cost of goods sold, including buying, distribution and occupancy costs
    244,690       (178 )     244,512  
 
                 
Gross margin
    185,378       178       185,556  
Selling, general and administrative expenses
    136,610       (1,613 )     134,997  
 
                 
Operating Income
    48,768       1,791       50,559  
Interest income
    (2,461 )           (2,461 )
Interest expense
    2,346             2,346  
 
                 
Earnings before income taxes
    48,883       1,791       50,674  
Provision for income taxes
    17,109       627       17,736  
 
                 
Net earnings
  $ 31,774     $ 1,164     $ 32,938  
 
                 
Net earnings per diluted share
  $ 0.58     $ 0.02     $ 0.60  
 
                 
Weighted average diluted common shares outstanding
    54,903               54,903  
 
                   
 
(1)   The adjustments are related to stock based compensation.
                         
    Three Months Ended February 3, 2007  
            (2)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 556,845     $ (31,742 )   $ 525,103  
Cost of goods sold, including buying, distribution and occupancy costs
    308,470       (14,560 )     293,910  
 
                 
Gross margin
    248,375       (17,182 )     231,193  
Selling, general and administrative expenses
    175,187       (12,365 )     162,822  
 
                 
Operating Income
    73,188       (4,817 )     68,371  
Interest income
    (2,537 )     152       (2,385 )
Interest expense
    2,390             2,390  
 
                 
Earnings before income taxes
    73,335       (4,969 )     68,366  
Provision for income taxes
    21,011       2,885       23,896  
 
                 
Net earnings
  $ 52,324     $ (7,854 )   $ 44,470  
 
                 
Net earnings per diluted share
  $ 0.95     $ (0.14 )   $ 0.81  
 
                 
Weighted average diluted common shares outstanding
    54,843               54,843  
 
                   
 
(2)   The net earnings adjustments are as follows:
  a.   $1.303 million, net of tax, or $0.02 diluted earnings per share related to stock based compensation
 
  b.   ($4.473) million or ($0.08) diluted earnings per share related to the 53rd week and
 
  c.   ($4.684) million or ($0.09) diluted earnings per share in discrete tax items.

Page 14


 

Non-GAAP Financial Measures (continued)
                         
    Twelve Months Ended February 3, 2007  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 1,882,064     $ (31,742 )   $ 1,850,322  
Cost of goods sold, including buying, distribution and occupancy costs
    1,066,359       (15,059 )     1,051,300  
 
                 
Gross margin
    815,705       (16,683 )     799,022  
Selling, general and administrative expenses
    591,767       (17,005 )     574,762  
 
                 
Operating Income
    223,938       322       224,260  
Interest income
    (9,786 )     152       (9,634 )
Interest expense
    9,216             9,216  
 
                 
Earnings before income taxes
    224,508       170       224,678  
Provision for income taxes
    75,933       4,751       80,684  
 
                 
Net earnings
  $ 148,575     $ (4,581 )   $ 143,994  
 
                 
Net earnings per diluted share
  $ 2.71     $ (0.08 )   $ 2.63  
 
                 
Weighted average diluted common shares outstanding
    54,749               54,749  
 
                   
 
(1)   The net earnings adjustments are as follows:
  a.   $4.576 million, net of tax, or $0.08 diluted earnings per share related to stock based compensation
 
  b.   ($4.473) million or ($0.08) diluted earnings per share related to the 53rd week and
 
  c.   ($4.684) million or ($0.09) diluted earnings per share in discrete tax items.

Page 15