Press Releases

Investors

Men's Wearhouse Reports Fiscal 2009 Second Quarter Results

- Q2 2009 GAAP diluted EPS was $0.75 compared with Q2 2008 GAAP diluted EPS of $0.63 and adjusted diluted EPS of $0.72

- Company provides guidance for the third quarter of fiscal 2009

- Conference call at 5:00 pm Eastern today

HOUSTON, Sept. 9 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the second quarter ended August 1, 2009.


                       Second Quarter Sales Summary - Fiscal 2009
                       ------------------------------------------

                                               Total        Comparable
                                               Sales        Store Sales
                   U.S. dollars, in millions  Change %       Change %
                   -------------------------                -----------
                    Current Year  Prior Year          Current Year  Prior Year
                    ------------  ----------          ------------  ----------
    Total Company      $526.2       $545.3     -3.5%
      MW               $359.0(a)    $362.7(a)  -1.0%    -2.0%(b)    -7.8%(b)
      K&G               $93.6        $96.4     -2.9%    -3.6%       -8.9%
        United States  $461.0       $470.0     -1.9%    -2.4%       -8.0%
      Moores            $65.2        $75.3    -13.3%    -3.4%(c)    -2.8%(c)


                         Year-To-Date Sales Summary - Fiscal 2009
                         ----------------------------------------
                                               Total        Comparable
                                               Sales        Store Sales
                   U.S. dollars, in millions  Change %       Change %
                   -------------------------                -----------
                    Current Year  Prior Year          Current Year  Prior Year
                    ------------  ----------          ------------  ----------

    Total Company      $990.3     $1,036.4     -4.4%
      MW               $670.0(a)    $690.6(a)  -3.0%    -4.4%(b)    -7.2%(b)
      K&G              $198.1       $197.0     +0.6%    -0.6%      -11.6%
        United States  $886.0       $911.3     -2.8%    -3.5%       -8.2%
      Moores           $104.3       $125.1    -16.6%    -3.7%(c)    -3.3%(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 $0.75 for the second quarter ended August 1, 2009. This compares to diluted earnings per common share guidance given June 8, 2009 of $0.56 to $0.60. Prior year second quarter GAAP diluted earnings per common share were $0.63 and adjusted diluted earnings per common share were $0.72 excluding $7.3 million (pre tax) or $0.09 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.

SECOND Quarter REVIEW

    --  Total Company sales decreased 3.5% for the quarter.
        --  Clothing product sales, representing 69.2% of fiscal second quarter
            2009 total net sales, decreased 5.6% due to decreases in the
            Company's comparable store sales primarily driven by a
            reduction in store traffic levels.

        --  Tuxedo rental sales, representing 24.6% of fiscal second quarter
            2009 total net sales, increased 1.7%.
    --  Gross margin before occupancy costs, as a percentage of total net sales,
        decreased 86 basis points from 59.9% to 59.1%.  Clothing product
        margins, as a percentage of related sales, decreased 205 basis points
        due to increased promotional activities and were modestly offset by
        higher alteration service margins and the impact of the higher margin
        tuxedo rental revenues that increased as a mix of total sales from 23.4%
        to 24.6%.
    --  Occupancy costs increased, as a percentage of total net sales, by 36
        basis points from 13.5% to 13.9% due to the deleveraging effect of
        reduced comparable store sales.  On an absolute dollar basis, occupancy
        costs decreased 0.9% from $73.8 million in the prior year to $73.1
        million.
    --  Selling, general, and administrative expenses were $173.9 million in the
        current year and $198.9 million in the prior year.  During the quarter,
        the Company entered into an agreement with a third party vendor who
        assumed our unredeemed gift card liability, which resulted in the
        recognition of other income from gift card breakage of $3.2 million
        ($2.0 million after tax or $0.04 per diluted share outstanding). 
        Excluding other income from gift card breakage, adjusted SG&A
        expenses of $177.1 million decreased 7.6% from the prior year's
        adjusted SG&A of $191.6 million which excludes $7.3 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 148 basis
        points from 35.1% to 33.7%.  Adjusted SG&A excluding advertising
        decreased 9.5% from the prior year quarter.
    --  Operating income was $63.9 million or 12.1% of total net sales compared
        to adjusted operating income of $61.5 million or 11.3% of total net
        sales for the same period last year which excludes $7.3 million in
        Golden Brand closure costs.  Net income was $39.5 million or 7.5% of
        total net sales compared to adjusted net income of $37.3 million or 6.8%
        of total net sales for the same period last year which excludes $4.5
        million in Golden Brand closure costs (net of tax).
    --  Cash and cash equivalent balances plus amounts held in short-term
        investments as of the end of the second quarter of 2009 were $163.9
        million, an increase of $44.7 million over the same period last year.
    --  Total inventories of $430.8 million declined 5.8% from the prior year
        second quarter of $457.2 million.

    --  Long term debt as of the end of the second quarter of 2009 was $43.2
        million, a decrease of $41.1 million from the same period last year.

THIRD QUARTER FISCAL 2009 GUIDANCE

For the third quarter, the Company expects GAAP diluted earnings per common share to be in a range of $0.27 to $0.30.

The Company anticipates comparable store sales of its retail apparel business to decline in a range of 2% to 3% and comparable store sales of its tuxedo rental revenues to increase in a range of 1% to 2% for the third quarter. Total Company sales are expected to be flat to a decrease of 2% for the third quarter.

Gross profit before occupancy costs for the third quarter is expected to decline in the low single digit range from 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 for the third quarter in absolute dollar terms.

Selling, general and administrative expenses for the third quarter are expected to decline by 4% to 5% from the prior year, excluding advertising costs and $1.8 million in prior year costs associated with the closing of Golden Brand.

This guidance includes an estimated effective tax rate of approximately 33.0% for the third quarter. The Company's effective tax rate for the fiscal year is now estimated at 36.1%.

Weighted average fully diluted common shares outstanding are estimated to be 52.285 million for the third quarter and 52.195 million for the full year.

UPDATED CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 pm Eastern time on Wednesday, September 9, 2009, company management will host a conference call and real time web cast to review the fiscal second quarter and its outlook for the third quarter of fiscal 2009.

To access the conference call, dial 480-629-9772. 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 September 16, 2009 by calling 303-590-3030 and entering the access code of 4143979#, or a webcast archive will be available free on the website for approximately 90 days.


    STORE INFORMATION

                          August 1, 2009   August 2, 2008    January 31, 2009
                          --------------   --------------    ----------------
                          Number           Number            Number
                            of    Sq. Ft.    of    Sq. Ft.     of     Sq. Ft.
                          Stores  (000's)  Stores  (000's)   Stores   (000's)
                          ------  -------  ------  -------   ------   -------
    Men's Wearhouse        580    3,274.1    572   3,213.9     580    3,263.1
    Men's Wearhouse
     and Tux               473      644.4    493     668.6     489      665.0
    Moores, Clothing
     for Men               117      732.7    116     721.2     117      729.3
    K&G (a)                108    2,488.4    106   2,442.6     108    2,493.4
    Total                1,278    7,139.6  1,287   7,046.3   1,294    7,150.8

    (a)  94, 90 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 1,278 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 Form 10-Q for the quarter ended May 2, 2009.

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
                        August 1, 2009 AND August 2, 2008
                      (In thousands, except per share data)

                          Three Months Ended                  Variance
                          ------------------                  --------
                            % of             % of                        Basis
                  2009     Sales    2008     Sales    Dollar      %     Points
                  ----     -----    ----     -----    ------     ---    ------
    Net sales:
      Clothing
       product  $364,302   69.23% $386,108   70.81% $(21,806)   (5.65%) (1.58)
      Tuxedo
       rental
       services  129,567   24.62%  127,453   23.37%    2,114     1.66%   1.25
      Alteration
       and other
       services   32,339    6.15%   31,728    5.82%      611     1.93%   0.33
                  ------    ----    ------    ----       ---     ----    ----
        Total
         net
         sales   526,208  100.00%  545,289  100.00%  (19,081)   (3.50%)  0.00

    Total cost
     of sales    288,420   54.81%  292,246   53.59%   (3,826)   (1.31%)  1.22
                 -------   -----   -------   -----    ------    ------   ----

    Gross
     margin(a)   237,788   45.19%  253,043   46.41%  (15,255)   (6.03%) (1.22)

    Selling,
     general
     and
     adminis-
     trative
     expenses    173,896   33.05%  198,886   36.47%  (24,990)  (12.56%) (3.43)
                 -------   -----   -------   -----   -------   -------  -----

    Operating
     income       63,892   12.14%   54,157    9.93%    9,735    17.98%   2.21

    Net interest       -    0.00%     (346)   0.06%     (346) (100.00%) (0.06)
                     ---    ----      ----    ----      ----  -------  ------

    Earnings
     before
     income
     taxes        63,892   12.14%   53,811    9.87%   10,081    18.73%   2.27

    Provision
     for income
     taxes        24,407    4.64%   20,986    3.85%    3,421    16.30%   0.79
                  ------    ----    ------    ----     -----    -----    ----

    Net earnings $39,485    7.50%  $32,825    6.02%   $6,660    20.29%   1.48
                 =======    ====   =======    ====    ======    =====    ====

    Net earnings
     per diluted
     common
     share (b)     $0.75             $0.63
                   =====             =====

    Weighted
     average
     diluted
     common
     shares
     outstanding: 52,255            51,862
                  ======            ======

    (a)  Gross margin as a percentage of related sales:

                          Three Months Ended                  Variance
                          ------------------                  --------
                   2009    % of     2008     % of
                          Related           Related                      Basis
                           Sales             Sales    Dollar       %    Points
                   ----   -------   ----    -------   ------      ---   ------
    Clothing
     margin     $194,115   53.28% $213,634   55.33% $(19,519)   (9.14%) (2.05)
    Tuxedo
     margin      108,092   83.43%  106,651   83.68%    1,441     1.35%  (0.25)
    Alteration
     and other
     services
     margin        8,649   26.74%    6,524   20.56%    2,125    32.57%   6.18
    Occupancy
     costs       (73,068) (13.89%) (73,766) (13.53%)     698     0.95%  (0.36)
                 -------  ------   -------  ------       ---     ----   -----
    Gross
     margin     $237,788   45.19% $253,043   46.41% $(15,255)   (6.03%) (1.22)
                ========   =====  ========   =====  ========    ======  =====

    (b)  Calculated based on net earnings less net earnings allocated to
         participating securities of $388 thousand for the quarter ended
         August 1, 2009.


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

                            FOR THE SIX MONTHS ENDED
                        August 1, 2009 AND August 2, 2008
                      (In thousands, except per share data)

                          Six Months Ended                    Variance
                          ----------------                    --------
                            % of               % of                      Basis
                  2009     Sales     2008     Sales    Dollar      %    Points
                  ----     -----     ----     -----    ------     ---   ------
    Net sales:
      Clothing
       product  $723,364   73.04%  $774,599   74.74% $(51,235)  (6.61%) (1.70)
      Tuxedo
       rental
       services  200,986   20.29%   197,647   19.07%    3,339    1.69%   1.22
      Alteration
       and other
       services   65,992    6.66%    64,139    6.19%    1,853    2.89%   0.47
                  ------    ----     ------    ----     -----    ----    ----
        Total
         net
         sales
                 990,342  100.00% 1,036,385  100.00%  (46,043)  (4.44%)  0.00

    Total cost
     of sales    564,565   57.01%   571,587   55.15%   (7,022)  (1.23%)  1.86
                 -------   -----    -------   -----    ------  -------   ----

    Gross
     margin(a)   425,777   42.99%   464,798   44.85%  (39,021)  (8.40%) (1.86)

    Selling,
     general
     and
     adminis-
     trative
     expenses    353,109   35.66%   395,536   38.16%  (42,427) (10.73%) (2.51)
                 -------   -----    -------   -----   -------  -------  -----

    Operating
     income       72,668    7.34%    69,262    6.68%    3,406    4.92%   0.65

    Net interest    (160)   0.02%    (1,124)   0.11%     (964) (85.77%) (0.09)
                    ----    ----     ------    ----      ----  -------  -----

    Earnings
     before
     income
     taxes        72,508    7.32%    68,138    6.57%    4,370    6.41%   0.75

    Provision
     for income
     taxes        27,767    2.80%    25,370    2.45%    2,397    9.45%   0.36
                  ------    ----     ------    ----     -----    ----    ----

    Net Earnings $44,741    4.52%   $42,768    4.13%   $1,973    4.61%   0.39
                 =======    ====    =======    ====    ======    ====    ====


    Net earnings
     per diluted
     common
     share(b)      $0.85              $0.82
                   =====              =====

    Weighted
     average
     diluted
     common
     shares
     outstanding: 52,105             51,863
                  ======             ======

    (a)  Gross margin as a percentage of related sales:

                          Six Months Ended                    Variance
                          ----------------                    --------
                  2009     % of      2008     % of
                          Related            Related                    Basis
                           Sales              Sales    Dollar     %    Points
                  ----    -------    ----    -------   ------    ---   ------
    Clothing
     margin     $385,720   53.32%  $433,634   55.98% $(47,914) (11.05%) (2.66)
    Tuxedo
     margin      167,479   83.33%   164,280   83.12%    3,199    1.95%   0.21
    Alteration
     and other
     services
     margin       18,212   27.60%    14,204   22.15%    4,008   28.22%   5.45
    Occupancy
     costs      (145,634) (14.71%) (147,320) (14.21%)   1,686    1.14%  (0.49)
                --------  -------  --------  -------    -----    ----   -----
    Gross
     margin     $425,777   42.99%  $464,798   44.85% $(39,021)  (8.40%) (1.86)
                ========   =====   ========   =====  ========   ======  =====

    (b)  Calculated based on net earnings less net earnings allocated to
         participating securities of $442 thousand for the six months ended
         August 1, 2009.


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

                                                        August 1,    August 2,
                                                          2009         2008
                                                          ----         ----
    Current assets:
        Cash and cash equivalents                      $144,449     $119,248
        Short-term investments                           19,490            -
        Accounts receivable, net                         17,129       19,047
        Inventories                                     430,777      457,212
        Other current assets                             51,876       59,012
                                                         ------       ------

          Total current assets                          663,721      654,519
    Property and equipment, net                         375,595      400,791
    Tuxedo rental product, net                          107,848       90,860
    Goodwill                                             59,266       61,538
    Other assets, net                                    16,466       25,351
                                                         ------       ------

          Total assets                               $1,222,896   $1,233,059
                                                     ==========   ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    ------------------------------------

    Current liabilities:
        Accounts payable                                $78,918     $102,780
        Accrued expenses and other current
         liabilities                                    115,488      118,113
        Income taxes payable                             19,276        9,347
                                                         ------        -----

          Total current liabilities                    $213,682     $230,240
    Long-term debt                                       43,161       84,221
    Deferred taxes and other liabilities                 63,289       67,320
                                                         ------       ------

          Total liabilities                             320,132      381,781
                                                        -------      -------

    Shareholders' equity:
        Preferred stock                                       -            -
        Common stock                                        703          698
        Capital in excess of par                        319,029      308,670
        Retained earnings                               961,670      915,541
        Accumulated other comprehensive income           33,988       38,905
                                                         ------       ------
          Total                                       1,315,390    1,263,814

        Treasury stock, at cost                        (412,626)    (412,536)
                                                       --------     --------

          Total shareholders' equity                    902,764      851,278
                                                        -------      -------

          Total liabilities and equity               $1,222,896   $1,233,059
                                                     ==========   ==========


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

                          FOR THE SIX MONTHS ENDED
                      August 1, 2009 AND August 2, 2008
                               (In thousands)
                                                          Six Months Ended
                                                          ----------------
                                                         2009          2008
                                                         ----          ----

    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings                                     $44,741       $42,768
      Non-cash adjustments to net earnings:
        Depreciation and amortization                   43,881        46,925
        Tuxedo rental product amortization              22,089        21,819
        Other                                             (334)        4,606
      Changes in assets and liabilities                   (248)      (30,511)
                                                          ----       -------

          Net cash provided by operating activities    110,129        85,607
                                                       -------        ------

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                             (28,757)      (49,524)
      Proceeds from sales of available-for-sale
       investments                                           -        59,921
      Other investing activities                             -            12
                                                           ---           ---

          Net cash provided by (used in) investing
           activities                                  (28,757)       10,409
                                                        -------       ------

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from issuance of common stock             1,051         1,181
      Proceeds from revolving credit facility                -       100,600
      Payments on revolving credit facility            (25,000)     (105,975)
      Cash dividends paid                               (7,344)       (7,281)
      Purchase of treasury stock                           (90)         (156)
      Other financing activities                        (1,588)       (1,320)
                                                         ------        ------

          Net cash used in financing activities        (32,971)      (12,951)
                                                        ------       -------

      Effect of exchange rate changes                    8,636        (3,263)
                                                         -----        ------

    INCREASE IN CASH AND CASH EQUIVALENTS               57,037        79,802
      Balance at beginning of period                    87,412        39,446
                                                        ------        ------
      Balance at end of period                        $144,449      $119,248
                                                      ========      ========

SOURCE Men's Wearhouse