Segment Reporting

6 Months Ended

Jul. 28, 2012

Segment Reporting

Segment Reporting

12.  Segment Reporting

The Company’s operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities.

The retail segment includes the results from our four retail merchandising brands: Men’s Wearhouse, Men’s Wearhouse and Tux, K&G and Moores Clothing for Men (“Moores”).  These four brands are operating segments that have been aggregated into the retail reportable segment based on their similar economic characteristics, products, production processes, target customers and distribution methods.  MW Cleaners is also aggregated in the retail segment as these operations have not had a significant effect on the revenues or expenses of the Company.  Specialty apparel merchandise offered by our four retail merchandising concepts includes suits, suit separates, sport coats, slacks, sportswear, outerwear, dress shirts, shoes and accessories for men.  Ladies’ career apparel, sportswear, accessories and shoes and children’s apparel is offered at most of our K&G stores.  Tuxedo rentals are offered at our Men’s Wearhouse, Men’s Wearhouse and Tux and Moores retail stores.

The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Twin Hill in the United States and Dimensions and Alexandra in the UK.  The two corporate apparel and uniform concepts are operating segments that have been aggregated into the reportable corporate apparel segment based on their similar economic characteristics, products, production processes, target customers and distribution methods.  The corporate apparel segment provides corporate clothing uniforms and workwear to workforces.

Operating income is the primary measure of profit we use to make decisions on allocating resources to our operating segments and to assess the operating performance of each operating segment.  It is defined as income before interest expense, interest income, income taxes and noncontrolling interest.  Corporate expenses and assets are allocated to the retail segment.

Net sales by brand and reportable segment are as follows (in thousands):

	For the Three Months Ended				For the Six Months Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Net sales:
MW (1)	$	429,513	$	407,025	$	800,981	$	761,696
K&G	89,995		92,528		193,087		199,277
Moores	78,361		80,327		133,839		133,507
MW Cleaners	6,819		6,154		13,473		12,265
Total retail segment	604,688		586,034		1,141,380		1,106,745
Twin Hill	6,218		6,267		13,283		11,982
Dimensions and Alexandra (UK)	51,396		63,228		94,213		117,186
Total corporate apparel segment	57,614		69,495		107,496		129,168
Total net sales	$	662,302	$	655,529	$	1,248,876	$	1,235,913

(1)  MW includes Men’s Wearhouse and Men’s Wearhouse and Tux stores.

The following table sets forth supplemental products and services sales information for the Company (in thousands):

	For the Three Months Ended				For the Six Months Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Net sales:
Men’s tailored clothing product	$	227,664	$	224,533	$	457,944	$	453,736
Men’s non-tailored clothing product	165,836		158,407		332,724		316,690
Ladies’ clothing product	19,524		18,849		42,825		41,624
Total retail clothing product	413,024		401,789		833,493		812,050
Tuxedo rental services	154,124		148,267		232,613		221,408
Alteration services	30,721		29,824		61,801		61,022
Retail dry cleaning services	6,819		6,154		13,473		12,265
Total alteration and other services	37,540		35,978		75,274		73,287
Corporate apparel clothing product	57,614		69,495		107,496		129,168
Total net sales	$	662,302	$	655,529	$	1,248,876	$	1,235,913

Operating income (loss) by reportable segment and the reconciliation to earnings before income taxes is as follows (in thousands):

	For the Three Months Ended						For the Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Operating income (loss):
Retail	$	89,399		$	88,160		$	132,766		$	133,057
Corporate apparel	2,191			858			(229		)	(402		)
Operating income	91,590			89,018			132,537			132,655
Interest income	143			114			271			158
Interest expense	(508		)	(343		)	(941		)	(655		)
Earnings before income taxes	$	91,225		$	88,789		$	131,867		$	132,158