Press Releases

Investors

Men's Wearhouse Reports Fiscal 2008 Fourth Quarter and Full Year Results

- Q4 2008 GAAP diluted EPS was $0.03 and adjusted loss per share was $0.06 compared with Q4 2007 GAAP diluted EPS of $0.28

- Fiscal 2008 GAAP diluted EPS was $1.13 and adjusted diluted EPS was $1.17 compared with 2007 GAAP diluted EPS of $2.73 and 2007 pro-forma diluted EPS of $2.57

- Company provides guidance for the first half of fiscal 2009
- Conference call at 5:00 pm Eastern today

HOUSTONMarch 11 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the fourth quarter and fiscal year ended January 31, 2009.

                         Fourth Quarter Sales Summary - Fiscal 2008

                         U.S. dollars,    Total Sales   Comparable Store
                          in millions       Change %     Sales Change %
                      Current     Prior               Current      Prior
                       Year       Year                 Year        Year
    Total Company     $476.4      $535.0    -11.0%
      MW              $315.8(a)   $340.3(a)  -7.2%       -9.7%(b)   -5.4%(b)
      K&G              $98.6      $109.0     -9.5%      -10.7%     -17.2%
        United
         States       $424.5      $463.9     -8.5%       -9.9%      -8.6%
      Moores           $51.9       $71.1    -27.0%      -10.5%(c)   -7.3%(c)

                          Year-To-Date Sales Summary - Fiscal 2008

                         U.S. dollars,    Total Sales   Comparable Store
                          in millions       Change %     Sales Change %
                      Current     Prior               Current      Prior
                       Year       Year                 Year        Year
    Total Company   $1,972.4    $2,112.6     -6.6%
      MW            $1,322.0(a) $1,413.3(a)  -6.5%       -9.0%(b)   -0.4%(b)
      K&G             $376.0      $407.8     -7.8%      -11.7%     -10.9%
        United
         States     $1,742.2    $1,862.9     -6.5%      -9.6 %      -3.0%
      Moores          $230.2      $249.7     -7.8%      -5.6 %(c)   +1.5%(c)


    (a)  Includes retail stores and ecommerce as well as stores resulting
         from the acquisition of After Hours on April 9, 2007.
    (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 share were $0.03 for the fourth quarter ended January 31, 2009. Adjusted loss per share was $0.06. This excludes a $5.8 million (net of tax) or $0.11 per diluted share outstanding gain from an eminent domain sale of a distribution center and a $1.2 million (net of tax) or $0.02 per diluted share outstanding non-cash fixed asset impairment charge.

Diluted earnings per share were $1.13 for fiscal year 2008. Adjusted diluted earnings per share were $1.17. This excludes a $6.6 million (net of tax) or $0.13 per diluted share outstanding cost to close the Canadian based manufacturing facility operated by the Company's subsidiary, Golden Brand, a $5.8 million (net of tax) or $0.11 per diluted share outstanding gain from an eminent domain sale of a distribution center and a$1.2 million (net of tax) or $0.02 per diluted share outstanding non-cash fixed asset impairment charge.

    FOURTH QUARTER REVIEW
    --  Total Company sales decreased 11.0% for the quarter.
        --  Clothing product sales, representing 85.4% of fiscal fourth
            quarter 2008 total net sales, decreased 12.8% due to decreases in
            the Company's comparable store sales primarily driven by a
            reduction in store traffic levels.
        --  Tuxedo rental sales, representing 7.5% of fiscal fourth quarter
            2008 total net sales, increased 3.0%.
    --  Gross margin before occupancy costs, as a percentage of total net
        sales, decreased 294 basis points from 56.68% to 53.74%.  Decreases in
        clothing product margins, as a percentage of related sales, of 396
        basis points were offset by the impact of the higher margin tuxedo
        rental revenues that increased from 6.50% to 7.52% as a percentage of
        total sales.
    --  Occupancy costs increased, as a percentage of total net sales, by 141
        basis points from 13.91% to 15.32% primarily due to the deleveraging
        effect of reduced comparable store sales.
    --  In the fourth quarter, the Company realized a pretax gain of $8.8
        million from an eminent domain sale of a distribution center and
        incurred a pretax non-cash fixed asset impairment charge in the amount
        of $1.8 million.  Selling, general, and administrative expenses,
        excluding these items, decreased 7.1% from the prior year quarter of
        $207.3 million to $192.6 million due primarily to cost-cutting
        measures implemented during the quarter.
    --  Operating loss excluding the $8.8 million gain on the distribution
        center sale and the $1.8 million impairment charge was $9.6 million or
        negative 2.0% of total net sales compared to $21.5 million or 4.0% of
        total net sales for the same period last 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.

FISCAL 2009 GUIDANCE

Due primarily to the lack of forward visibility as to macro economic conditions, the Company is implementing modifications to its forward guidance practices beginning with fiscal 2009. The Company will provide specific financial related guidance for the first half of the fiscal year and plans to update that guidance when it reports first quarter earnings. The Company has provided below additional guidance around certain elements which management believes will influence the Company's annual results. Finally, the Company will eliminate its past practice of providing mid quarter updates on earnings per share guidance.

For the first half of the fiscal year, the Company expects GAAP diluted earnings per share in a range of $0.45 to $0.65.

The Company anticipates comparable store sales of its retail apparel business to decline in a range of 6% to 10% and comparable store sales of its tuxedo rental revenues to increase in a range of 7% to 9%. Total Company sales are expected to decrease in the 4% to 7% range.

The Company expects first quarter results, on a diluted EPS basis, to be break even to a mid single digit range loss and that the second quarter will drive the majority of first half estimated earnings results which is due to the tuxedo rental business seasonality favoring the second fiscal quarter of the year.

Gross margins before occupancy costs for the first and second quarter are expected to be below the prior year as the Company continues a more aggressive posture in strengthening its value proposition for customers. Occupancy costs are expected to be flat to a modest reduction for the first half in dollar terms; however, as a percentage of revenues, these costs will deleverage from the prior year rate.

The Company has implemented a variety of cost containment and operational changes that have resulted in an immediate reduction in payroll and benefit costs in the fourth quarter of fiscal 2008. Further, the actions are expected to drive reported selling, general and administrative expenses, excluding advertising costs, for the first half of the year down by 7% to 9% from the prior year. This expected rate of reduction will enable the Company to realize expense leverage for the first half of the year.

Net interest expense is expected to decline for the first half and full year due to positive increases in free cash flow.

This guidance includes an estimated annual effective tax rate of approximately 38.0%; however, the Company expects continuing variability in quarterly tax rates.

Fully diluted shares outstanding of 52.1 million are estimated for the year. The Company's share repurchase program will be influenced by several factors including business and market conditions.

The Company anticipates opening new stores throughout the year. Currently the aggregate number of new openings is expected to be up to 10; however, the Company remains flexible to take advantage of real estate opportunities that may arise.

Capital expenditures for the full year are targeted in a range of $50 million to $55 million and depreciation and amortization is estimated at $85 million.

CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 p.m. Eastern time on Wednesday, March 11, 2009, Company management will host a conference call and real time web cast to review the fiscal fourth quarter and full year 2008 and provide its outlook for fiscal 2009.

    To access the conference call, dial 303-262-2140.  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 18, 2009 by calling 303-590-3000 and entering the access code of
11124766# or a webcast archive will be available free on the website for
approximately 90 days.

    STORE INFORMATION

                                 January 31, 2009      February 2, 2008
                                Number of    Sq. Ft.   Number of   Sq. Ft.
                                  Stores     (000's)     Stores    (000's)

    Men's Wearhouse                  580    3,263.1        563    3,152.6

    Men's Wearhouse and Tux          489      665.0        489      652.0

    Moores, Clothing for Men         117      729.3        116      719.8

    K&G (a)                          108    2,493.4        105    2,428.8

    Total                          1,294    7,150.8      1,273    6,953.2

    (a)  93 and 89 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 1,294 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 February 2, 2008 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



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

                           FOR THE THREE MONTHS ENDED
                     January 31, 2009 AND February 2, 2008
                     (In thousands, except per share data)

                                                Three Months Ended
                                                % of                 % of
                                      2008      Sales     2007      Sales
    Net sales:
      Clothing product              $406,690    85.37%  $466,221    87.15%
      Tuxedo rental services          35,806     7.52%    34,752     6.50%
      Alteration and other services   33,864     7.11%    33,985     6.35%
        Total net sales              476,360   100.00%   534,958   100.00%

    Cost of sales:
      Clothing product including
       buying and distribution
       costs                         187,871    39.44%   196,900    36.81%
      Tuxedo rental services           9,946     2.09%     9,591     1.79%
      Alteration and other services   22,557     4.74%    25,230     4.72%
      Occupancy costs                 72,996    15.32%    74,422    13.91%
        Total cost of sales          293,370    61.59%   306,143    57.23%

    Gross margin                     182,990    38.41%   228,815    42.77%

    Selling, general and
     administrative expenses         185,550    38.95%   207,266    38.74%

    Operating income (loss)           (2,560)   (0.54)%   21,549     4.03%

    Interest income                      333     0.07%     1,332     0.25%
    Interest expense                    (683)   (0.14)%   (1,533)   (0.29)%

    Earnings (loss) before income
     taxes                            (2,910)   (0.61)%   21,348     3.99%

    Provision (benefit) for income
     taxes                            (4,399)   (0.92)%    6,533     1.22%

    Net earnings                      $1,489     0.31%   $14,815     2.77%


    Net earnings per share:
      Basic                            $0.03               $0.28
      Diluted                          $0.03               $0.28

    Weighted average common shares
     outstanding:
      Basic                           51,768              52,187
      Diluted                         52,037              52,708



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

                           FOR THE TWELVE MONTHS ENDED
        January 31, 2009, February 2, 2008 AND PRO FORMA February 2, 2008
                      (In thousands, except per share data)

                                       Twelve Months Ended
                              % of                 % of   Pro Forma    % of
                      2008    Sales      2007      Sales     2007      Sales
    Net sales:
      Clothing
       product    $1,515,704  76.84% $1,656,167    78.40% $1,659,685   77.46%
      Tuxedo
       rental
       services      329,951  16.73%    325,272    15.40%    351,606   16.41%
      Alteration
       and other
       services      126,763   6.43%    131,119     6.21%    131,247    6.13%
        Total net
         sales     1,972,418 100.00%  2,112,558   100.00%  2,142,538  100.00%

    Cost of
     sales:
      Clothing
       product
       including
       buying and
       distribution
       costs         672,629  34.10%    709,260    33.57%    711,874   33.23%
      Tuxedo rental
       services       59,515   3.02%     61,663     2.92%     65,904    3.08%
      Alteration
       and other
       services       96,165   4.88%     99,577     4.71%     99,577    4.65%
      Occupancy
       costs         293,597  14.89%    272,001    12.88%    278,395   12.99%
        Total cost
         of sales  1,121,906  56.88%  1,142,501    54.08%  1,155,750   53.94%

    Gross margin     850,512  43.12%    970,057    45.92%    986,788   46.06%

    Selling,
     general and
     administrative
     expenses        760,041  38.53%    741,405    35.10%    771,184   35.99%

    Operating
     income           90,471   4.59%    228,652    10.82%    215,604   10.06%

    Interest
     income            2,592   0.13%      5,987     0.28%      5,509    0.26%
    Interest
     expense          (4,300) (0.22)%    (5,046)   (0.24)%    (5,257)  (0.25)%

    Earnings before
     income taxes     88,763   4.50%    229,593    10.87%    215,856   10.07%

    Provision for
     income taxes     29,919   1.52%     82,552     3.91%     77,411    3.61%

    Net earnings     $58,844   2.98%   $147,041     6.96%   $138,445    6.46%

    Net earnings
     per share:
      Basic            $1.14              $2.76                $2.60
      Diluted          $1.13              $2.73                $2.57

    Weighted average
     common shares
     outstanding:
      Basic           51,645             53,258               53,258
      Diluted         51,944             53,890               53,890

    Note:  The pro forma condensed consolidated statement of earnings presents
           the Company's results of operations as if the After Hours
           acquisition had occurred on January 29, 2006, after giving effect
           to certain purchase accounting adjustments.  The pro forma
           information is not necessarily indicative of actual results had the
           acquisition occurred on January 29, 2006.



    THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited)

                                               January 31,  February 2,
                                                  2009         2008

                     ASSETS
    Current assets:
      Cash and cash equivalents                  $87,412      $39,446
      Short-term investments                      17,121       59,921
      Accounts receivable, net                    16,315       18,144
      Inventories                                440,099      492,423
      Other current assets                        70,668       61,061

        Total current assets                     631,615      670,995
    Property and equipment, net                  387,472      410,167
    Tuxedo rental product, net                    96,691       84,089
    Goodwill                                      57,561       65,309
    Other assets, net                             14,391       25,907

        Total assets                          $1,187,730   $1,256,467

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                          $108,800     $146,713
      Accrued expenses and other current
       liabilities                               111,404      124,952
      Income taxes payable                            19        5,590

        Total current liabilities                220,223      277,255
    Long-term debt                                62,916       92,399
    Deferred taxes and other liabilities          62,443       70,876

        Total liabilities                        345,582      440,530

    Shareholders' equity:
      Preferred stock                                  -            -
      Common stock                                   700          696
      Capital in excess of par                   315,404      305,209
      Retained earnings                          924,288      880,084
      Accumulated other comprehensive income      14,292       43,629
        Total                                  1,254,684    1,229,618

      Treasury stock, at cost                   (412,536)    (413,681)

        Total shareholders' equity               842,148      815,937

        Total liabilities and equity          $1,187,730   $1,256,467



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

                           FOR THE TWELVE MONTHS ENDED
                      January 31, 2009 AND February 2, 2008
                                  (In thousands)

                                                   Twelve Months Ended
                                                  2008             2007

    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings                              $58,844          $147,041
      Non-cash adjustments to net earnings:
        Depreciation and amortization            90,665            80,296
        Tuxedo rental product amortization       38,180            42,067
        Other                                    12,707            15,073
      Changes in assets and liabilities         (70,906)          (79,600)

          Net cash provided by operating
           activities                           129,490           204,877

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                      (88,225)         (126,076)
      Net non-cash assets acquired                    -           (68,232)
      Proceeds from sale of distribution
       facility                                   9,588                 -
      Purchases of available-for-sale
       investments                              (17,121)         (337,401)
      Proceeds from sales of
       available-for-sale investments            59,921           277,480
      Other investing activities                    811               (40)

          Net cash used in investing
           activities                           (35,026)         (254,269)

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Cash dividends paid                       (14,600)          (12,353)
      Proceeds from revolving credit
       facility                                 150,600            30,500
      Payments on revolving credit facility    (130,975)          (25,125)
      Payments on Canadian term loan            (31,880)                -
      Proceeds from issuance of common
       stock                                      2,853             7,128
      Purchase of treasury stock                   (156)         (106,107)
      Other financing activities                 (1,261)            1,543

          Net cash used in financing
           activities                           (25,419)         (104,414)

      Effect of exchange rate changes           (21,079)           13,558

    INCREASE (DECREASE) IN CASH AND CASH
     EQUIVALENTS                                 47,966          (140,248)
      Balance at beginning of period             39,446           179,694
      Balance at end of period                  $87,412           $39,446


 

SOURCE Men's Wearhouse