- 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, Dec. 8
/PRNewswire-FirstCall/ -- 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
-------------------------------------------------------------------------
U.S. dollars, Total Sales Comparable Store in millions Change %
Sales Change % ------------------- -------------------- Current
Prior Current Prior Year Year Year 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
-------------------------------------------------------------------------
U.S. dollars, Total Sales Comparable Store in millions Change %
Sales Change % ------------------- -------------------- Current
Prior Current Prior Year Year Year 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. 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. -- 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. -- 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. -- 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. 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 http://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 of Sq. Ft. Number of Sq. Ft. Number of Sq.
Ft. Stores (000's) Stores (000's) 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
http://www.menswearhouse.com/. CONTACT: Neill Davis, EVP & CFO,
Men's Wearhouse (281) 776-7000 Ken Dennard, DRG&E (713)
529-6600 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 adminis- trative 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. 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 adminis- trative 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. 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 ========== ========== 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
======== ======= DATASOURCE: Men's Wearhouse CONTACT: Neill Davis,
EVP & CFO, Men's Wearhouse, +1-281-776-7000; or Ken Dennard of
DRG&E, +1-713-529-6600, for Men's Wearhouse Web Site:
http://www.menswearhouse.com/
Copyright