Press Releases

Investors

Men's Wearhouse Reports Fiscal 2009 First Quarter Results

- Q1 2009 GAAP diluted EPS was $0.10 compared with Q1 2008 GAAP diluted EPS of $0.19 and adjusted diluted EPS of $0.20

- Company provides guidance for the second quarter of fiscal 2009

- Company moves its scheduled Conference call to 5:00 pm Eastern Thursday, June 11, 2009

HOUSTON, June 8 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended May 2, 2009.


                        First Quarter Sales Summary - Fiscal 2009
                                          Total Sales   Comparable Store Sales
                U.S. dollars, in millions   Change %          Change %
                 Current Year  Prior Year             Current Year  Prior Year
    Total Company    $464.1       $491.1      -5.5%
      MW             $310.9 (a)   $327.9 (a)  -5.2%     -7.0% (b)    -6.4% (b)
      K&G            $104.5       $100.6       3.9%      2.3%       -14.1%
       United States $425.0       $441.3      -3.7%     -4.7%        -8.5%
      Moores          $39.1        $49.8     -21.5%     -4.3% (c)    -4.2% (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 $0.10 for the first quarter ended May 2, 2009. This compares to diluted earnings per common share guidance given March 11, 2009 of break even to a mid single digit loss range. Prior year first quarter GAAP diluted earnings per common share were $0.19 and adjusted diluted earnings per common share were $0.20 excluding costs incurred in connection with the closure of the Canadian based manufacturing facility operated by the Company's subsidiary, Golden Brand.

FIRST QUARTER REVIEW

    --  Total Company sales decreased 5.5% for the quarter.
    --  Clothing product sales, representing 77.4% of fiscal first quarter 2009
        total net sales, decreased 7.6% due to decreases in the Company's
        comparable store sales primarily driven by a reduction in store traffic
        levels.
    --  Tuxedo rental sales, representing 15.4% of fiscal first quarter 2009
        total net sales, increased 1.7%.
    --  Gross margin before occupancy costs, as a percentage of total net sales,
        decreased 196 basis points from 58.10% to 56.14%.  Clothing product
        margins, as a percentage of related sales, decreased 327 basis points
        but were modestly offset by the impact of the higher margin tuxedo
        rental revenues that increased as a mix of total sales from 14.3% to
        15.4%.
    --  Occupancy costs increased, as a percentage of total net sales, by 65
        basis points from 14.98% to 15.63% primarily due to the deleveraging
        effect of reduced comparable store sales.  On an absolute dollar basis,
        occupancy costs decreased 1.3% from $73.6 million in the prior year to
        $72.6 million.
    --  Selling, general, and administrative expenses decreased 8.9% from the
        prior year quarter of $196.7 million to $179.2 million due primarily to
        cost-cutting measures and operational efficiencies.  As a percentage of
        total net sales, SG&A decreased 143 basis points from 40.04% to
        38.61%.  SG&A excluding advertising decreased 10.7% from the prior
        year quarter.
    --  Operating income was $8.8 million or 1.9% of total net sales compared to
        $15.1 million or 3.1% of total net sales for the same period last year. 
        Net income was $5.3 million or 1.1% of total net sales compared to $9.9
        million or 2.0% of total net sales for the same period last year.

-- The effective tax rate for first quarter was 39.0%.

FISCAL 2009 GUIDANCE

Due primarily to the lack of forward visibility as to macro economic conditions, the Company has implemented modifications to its forward guidance practices beginning with fiscal 2009. The Company previously provided specific financial related guidance for the first half of the current fiscal year. This guidance is being updated below. The Company has also provided below additional guidance around certain elements which management believes will influence the Company's annual results.

For the second quarter, the Company expects GAAP diluted earnings per common share to be in a range of $0.56 to $0.60.

The Company anticipates comparable store sales of its retail apparel business to decline in a range of 4% to 6% and comparable store sales of its tuxedo rental revenues to increase in a range of 3% to 5% for the second quarter. Total Company sales are expected to decrease in the 3% to 5% range for the second quarter.

Gross margins before occupancy costs for the 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 for the second quarter in absolute 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 immediate cost reductions for fiscal 2009. These actions are expected to drive second quarter selling, general and administrative expenses down by 6% to 8% from the prior year, excluding advertising costs and $7.3 million in prior year costs associated with the closing of Golden Brand. This expected rate of reduction will enable the Company to realize pre-advertising expense leverage for the second quarter.

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

This guidance includes an estimated annual effective tax rate of approximately 37.2%; however, the Company expects continuing variability in quarterly tax rates.

Fully diluted common shares outstanding of 52.6 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 now expected to be up to eight; 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 $50.0 million to $55.0 million and depreciation and amortization expense is now estimated at approximately $87.0 million.

UPDATED CONFERENCE CALL AND WEBCAST INFORMATION

Due to the fact that Men's Wearhouse has made a bid for Filene's Basement in Federal Bankruptcy Court in Wilmington, Delaware and is expecting a ruling on the matter on Wednesday, June 10, 2009, the Company has moved its fiscal first quarter 2009 conference call and real time web cast to Thursday, June 11, 2009, at 5:00 pm Eastern time.

To access the conference call, dial 480-629-9722. 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 June 18, 2009 by calling 303-590-3030 and entering the access code of 4094764#, or a webcast archive will be available free on the website for approximately 90 days.

STORE INFORMATION


                        May 2, 2009        May 3, 2008       January 31, 2009
                      Number   Sq. Ft.    Number   Sq. Ft.    Number   Sq. Ft.
                    of Stores  (000's)  of Stores  (000's)  of Stores  (000's)
    Men's Wearhouse    581     3,276.7     571     3,203.1     580     3,263.1
    Men's Wearhouse
     and Tux           478       651.9     492       662.0     489       665.0
    Moores, Clothing
     for Men           117       732.7     116       721.2     117       729.3
    K&G (a)            108     2,488.4     106     2,451.2     108     2,493.4
    Total            1,284     7,149.7   1,285     7,037.5   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 1,284 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.

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
                            May 2, 2009 AND May 3, 2008
                       (In thousands, except per share data)

                                                  Three Months Ended
                                                   % of                % of
                                          2009     Sales       2008    Sales

    Net sales:
      Clothing product                $ 359,062   77.36 %  $ 388,491   79.11 %
      Tuxedo rental services             71,419   15.39 %     70,194   14.29 %
      Alteration and other services      33,653    7.25 %     32,411    6.60 %
        Total net sales                 464,134  100.00 %    491,096  100.00 %

    Cost of sales:
      Clothing product including buying
       and distribution costs           167,457   36.08 %    168,491   34.31 %
      Tuxedo rental services             12,032    2.59 %     12,565    2.56 %
      Alteration and other services      24,090    5.19 %     24,731    5.04 %
      Occupancy costs                    72,566   15.63 %     73,554   14.98 %
        Total cost of sales             276,145   59.50 %    279,341   56.88 %

    Gross margin                        187,989   40.50 %    211,755   43.12 %

    Selling, general and
     administrative expenses            179,213   38.61 %    196,650   40.04 %

    Operating income                      8,776    1.89 %     15,105    3.08 %

    Interest income                         258    0.06 %        821    0.17 %
    Interest expense                       (418)  (0.09)%     (1,599)  (0.33)%

    Earnings before income taxes          8,616    1.86 %     14,327    2.92 %

    Provision for income taxes            3,360    0.72 %      4,384    0.89 %

    Net earnings                      $   5,256    1.13 %  $   9,943    2.02 %


    Net earnings per common share (a):
      Basic                           $    0.10            $    0.19
      Diluted                         $    0.10            $    0.19

    Weighted average common
     shares outstanding:
      Basic                              51,895               51,470
      Diluted                            51,955               51,864

    (a)  Calculated based on net earnings less net earnings allocated to
         participating securities of $51 thousand for the quarter ended
         May 2, 2009.


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

                                                         May 2,        May 3,
                                                          2009          2008
                      ASSETS

    Current assets:
      Cash and cash equivalents                     $   107,538   $    76,660
      Short-term investments                             17,707         9,668
      Accounts receivable, net                           24,858        26,858
      Inventories                                       448,018       488,137
      Other current assets                               59,752        58,007

        Total current assets                            657,873       659,330
    Property and equipment, net                         378,510       406,944
    Tuxedo rental product, net                          120,083        92,405
    Goodwill                                             57,622        62,481
    Other assets, net                                    12,439        26,182

        Total assets                                $ 1,226,527   $ 1,247,342

        LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                              $   142,984   $   121,193
      Accrued expenses and other current liabilities    127,868       131,436
      Income taxes payable                                3,461             -

        Total current liabilities                   $   274,313   $   252,629
    Long-term debt                                       39,213       106,870
    Deferred taxes and other liabilities                 63,955        67,498

        Total liabilities                               377,481       426,997

    Shareholders' equity:
      Preferred stock                                         -             -
      Common stock                                          702           697
      Capital in excess of par                          316,034       305,601
      Retained earnings                                 925,881       886,386
      Accumulated other comprehensive income             19,055        40,198
        Total                                         1,261,672     1,232,882

      Treasury stock, at cost                          (412,626)     (412,537)

        Total shareholders' equity                      849,046       820,345

        Total liabilities and equity                $ 1,226,527   $ 1,247,342


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

                            FOR THE THREE MONTHS ENDED
                            May 2, 2009 AND May 3, 2008
                                  (In thousands)

                                                          Three Months Ended
                                                          2009          2008

    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings                                  $     5,256   $     9,943
      Non-cash adjustments to net earnings:
        Depreciation and amortization                    22,222        23,698
        Tuxedo rental product amortization                7,644         8,066
        Other     7,887 2,126
      Changes in assets and liabilities                  20,293       (36,577)

          Net cash provided by operating activities      63,302         7,256

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                              (15,035)      (29,860)
      Proceeds from sales of available-for-sale
       investments                                            -        50,254

          Net cash provided by (used in) investing
           activities                                   (15,035)       20,394

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Cash dividends paid                                (3,664)       (3,632)
      Proceeds from revolving credit facility                 -       100,600
      Payments on revolving credit facility             (25,000)      (83,975)
      Proceeds from issuance of common stock                506           609
      Purchase of treasury stock                            (90)         (156)
      Other financing activities                         (1,607)       (1,336)

          Net cash provided by (used in) financing
           activities                                   (29,855)       12,110

      Effect of exchange rate changes                     1,714        (2,546)

    INCREASE IN CASH AND CASH EQUIVALENTS                20,126        37,214
      Balance at beginning of period                     87,412        39,446
      Balance at end of period                      $   107,538   $    76,660

SOURCE Men's Wearhouse