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Men's Wearhouse Reports Fiscal 2007 First Quarter Results

- Q1 2007 GAAP diluted EPS was $0.75 versus $0.53 in 2006

- Company estimates Q2 2007 GAAP diluted EPS in a range of $0.88 to $0.92

- Conference call at 5:00 pm eastern today

HOUSTON, May 22 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended May 5, 2007.

George Zimmer, Chairman and Chief Executive Officer, commented, "During the quarter we completed the acquisition of After Hours Formalwear (AH) from Federated Department Stores. With the combination of 509 AH stores and MW's existing stores, we are now the leading retailer for the rental of men's formalwear with over 1,100 stores in the United States and Canada. We are sharply focused on capturing the synergistic potential of this acquisition and thereby enhancing shareholder value. Our current priority for the balance of this fiscal year is to complete the operational integration of AH with MW by the end of December 2007 in order to realize maximum synergies in our business model beginning in fiscal 2008. The principal elements of the integration plan involve the formulation of a branding strategy, developing a common inventory assortment, and the assimilation of store support services."


    FIRST QUARTER RESULTS

                    First Quarter Sales Summary - Fiscal 2007

                         U.S. dollars, in    Total Sales  Comparable Store
                             millions          Change %     Sales Change %
                       Current    Prior Year              Current    Prior
                         Year                              Year      Year
    Total Company      $496.1      $434.6      + 14.2%
      TMW              $303.8(a)   $288.1(a)   +  5.4%   + 0.3%     + 4.5%
      After Hours       $28.5        (b)         (b)        (b)       (b)
      K&G              $110.0      $100.0      +  9.9%   - 6.2%     - 2.5%
        United States  $450.9      $394.4      + 14.3%   - 1.3%     + 2.7%
      Moores            $45.3       $40.2      + 12.6%     5.8%(c)  + 3.9%(c)

     (a)  Includes retail stores and ecommerce.
     (b)  After Hours was acquired on April 9, 2007 and will be excluded from
          comparable store sales reporting until Q2 of fiscal 2008.
     (c)  Comparable store sales change is based on the Canadian dollar.


First quarter 2007 operating income was $65.3 million compared to $46.4 million last year and net income was $40.9 million compared to $28.9 million last year. GAAP diluted earnings per share were $0.75 for the first quarter ended May 5, 2007 compared to $0.53 last year. After Hours, after acquisition funding costs, contributed $0.08 to the GAAP diluted earnings per share for the first quarter.

    First Quarter Highlights

    -- Total company sales increased 14.2% for the quarter.  Apparel sales,
       representing 81.3% of total sales, increased 5.5%.  Tuxedo rental
       revenues, representing 12.1% of total sales, increased 137.6%.  Tuxedo
       rental revenues excluding After Hours increased 34.2%.

       -- Comparable store sales declined 1.3% for the company's United States
          based stores, below the company's guidance of +1% to +2%.  The
          decline in comparable store sales is primarily due to soft traffic
          levels resulting in lower tailored clothing sales at both TMW and
          K&G.

       -- Comparable store sales increased 5.8% for the company's Canadian
          based stores, in-line with the company's guidance.  This on plan
          performance is a reflection of continued gains in both traffic
          levels and average ticket.

    -- Gross profit, as a percentage of sales, increased 354 basis points from
       42.07% to 45.61%.  This improvement is due to both organic and acquired
       growth in tuxedo rental revenues as well as continued gains in
       merchandise margins.

    -- Selling, general, and administrative expenses as a percentage of sales
       increased 105 basis points from 31.40% to 32.45%.  Most of this
       increase is due to the AH acquisition.

    -- Operating Income increased 248 basis points from 10.67% to 13.15%

    -- During the quarter the company repurchased 444,100 shares for a total
       of $19.3 million.

SECOND QUARTER 2007 GUIDANCE AND UPDATED FISCAL 2007 OUTLOOK

For the second quarter of 2007, the company expects same store sales growth in the U.S. to be in a range of flat to +1% and in Canada to be in a range of +4% to +6%. GAAP diluted earnings per share are expected to be in the range of $0.88 to $0.92.

AH revenues for the second quarter are estimated in a range of $80 million to $85 million. After consideration of acquisition funding costs, AH is expected to be accretive to fiscal second quarter 2007 in a range of $0.15 to $0.17 per diluted share outstanding.

For the fiscal year ending February 2, 2008, the company expects GAAP diluted earnings per share in a range of $2.84 to $2.94. Same store sales changes in the U.S. for fiscal 2007 are expected to be in a range of -1% to flat and in Canada are expected to be in a range of an +3% to +5%. This represents a reduction from previous expectations in the U.S. of an increase of 1% to 2% which is reflective of continued soft tailored clothing sales at both Men's Wearhouse and K&G and principally driven by slower traffic levels.

AH revenues for fiscal 2007 are estimated in a range of $212.0 million to $217.0 million. After consideration of acquisition funding costs, AH is expected to be accretive to fiscal 2007 in a range of $0.03 to $0.05 per diluted share outstanding. It should be noted that the seasonality of AH revenues is heavily concentrated in April, May and June. Second quarter, followed by third quarter, is the highest revenue quarter for AH and first and fourth quarters are considered off season. Therefore, the profitability in the second and third quarters is mostly offset by losses in the first and fourth quarters.

This guidance includes an estimated effective tax rate of approximately 37.6% and fully diluted shares outstanding of 54.5 million.

CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 p.m. Eastern time today, company management will host a conference call and real time web cast to review the results for the fiscal first quarter 2007.

To access the conference call, dial 303-262-2142. To access the live webcast presentation, visit the Investor Relations section of the company's website at http://www.tmw.com. A telephonic replay will be available through May 29th by calling 303-590-3000 and entering the access code of 11088182#, or a webcast archive will be available free on the website for approximately 90 days.

    STORE INFORMATION

                       May 5, 2007       April 29, 2006   February 3, 2007

                     Number   Sq. Ft.   Number   Sq. Ft.   Number   Sq. Ft.
                       of     (000's)     of     (000's)     of     (000's)
                     Stores             Stores             Stores

    Men's Wearhouse    544    3,034.1     529    2,921.6     543    3,014.8

    After Hours        509      647.3      (a)      (a)       (a)      (a)

    Moores, Clothing
     for Men           116      722.6     116      719.8     116      722.7

    K&G (b)             98    2,278.7      80    1,901.0      93    2,201.6

    Total            1,267    6,682.7     725    5,542.4     752    5,939.1

    (a)  After Hours was acquired on April 9th, 2007.
    (b)  80, 56 and 73 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 1,267 stores. The stores carry a full selection of designer, brand name and private label suits, sport coats, furnishings and accessories, including tuxedo rentals available in the Men's Wearhouse, Moores, After Hours, and select K&G 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 unfavorable local, regional and national economic developments, disruption in retail buying trends due to homeland security concerns, severe weather conditions, aggressive advertising or marketing activities of competitors, governmental actions and other factors described herein and in the company's annual report on Form 10-K for the year ended February 3, 2007.

For additional information on Men's Wearhouse, please visit the company's website at http://www.tmw.com.

    CONTACT:  Neill Davis, EVP & CFO, Men's Wearhouse  (713) 592-7200
              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 5, 2007 AND April 29, 2006
                    (In thousands, except per share data)

                                                  Three Months Ended
                                                   % of                % of
                                          2007     Sales     2006     Sales


    Net sales                           $496,118  100.00%  $434,564  100.00%
    Cost of goods sold, including
     buying, distribution and
     occupancy costs                     269,845   54.39%   251,735   57.93%
                 Gross margin            226,273   45.61%   182,829   42.07%

    Selling, general and
     administrative expenses             161,010   32.45%   136,441   31.40%

    Operating income                      65,263   13.15%    46,388   10.67%


    Interest income                       (1,632)  (0.33%)   (1,995)  (0.46%)
    Interest expense                       1,086    0.22%     2,191    0.50%

    Earnings before income taxes          65,809   13.26%    46,192   10.63%

    Provision for income taxes            24,876    5.01%    17,336    3.99%


    Net earnings                         $40,933    8.25%   $28,856    6.64%


    Net earnings per share:
        Basic                              $0.76              $0.54
        Diluted                            $0.75              $0.53

    Weighted average common shares
     outstanding:
        Basic                             53,963             53,132
        Diluted                           54,709             54,719


    Note: As a result of the acquisition of After Hours Formalwear on April 9,
    2007, earnings for the three months ended May 5, 2007 include the results
    of operations of After Hours for the 26 days beginning April 10, 2007.



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


                                                    May 5,          April 29,
                                                     2007             2006

                      ASSETS

    Current assets:
      Cash and cash equivalents                     $87,031         $112,572
      Short-term investments                         38,500          151,525
      Inventories                                   474,413          432,445
      Other current assets                           93,938           54,049

        Total current assets                        693,882          750,591
    Property and equipment, net                     364,256          268,083
    Goodwill                                         58,517           58,284
    Other assets, net                               103,550           74,690

         Total assets                            $1,220,205       $1,151,648

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities                            $295,182         $227,626
    Long-term debt                                   78,105          207,379
    Deferred taxes and other liabilities             64,680           51,690
    Shareholders' equity                            782,238          664,953

         Total liabilities and equity            $1,220,205       $1,151,648


    Note: As a result of the acquisition of After Hours Formalwear on April 9,
    2007, the consolidated balance sheet as of May 5, 2007 includes
    preliminary estimates of the fair values of the assets acquired and
    liabilities assumed as of the acquisition date.



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


                          FOR THE THREE MONTHS ENDED
                        May 5, 2007 AND April 29, 2006
                                (In thousands)

                                                         Three Months Ended
                                                        2007           2006

    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings                                    $40,933        $28,856
      Non-cash adjustments to net earnings:
        Depreciation and amortization                  17,006         15,019
        Other                                           9,239          4,822
      Changes in assets and liabilities               (26,909)       (37,915)

          Net cash provided by operating activities    40,269         10,782

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                            (11,661)       (12,295)
      Net non-cash assets acquired                    (69,747)             -
      Purchases of available-for-sale investments    (137,955)      (103,475)
      Proceeds from sales of available-for-sale
       investments                                     99,455         14,725
      Other                                             1,191            (16)

         Net cash used in investing activities       (118,717)      (101,061)

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Cash dividends paid                              (2,729)        (2,686)
      Proceeds from issuance of common stock            3,670          4,237
      Purchase of treasury stock                      (19,290)             -
      Other                                               378            440

         Net cash provided by (used in) financing
          activities                                  (17,971)         1,991

      Effect of exchange rate changes                   3,756            634

    DECREASE IN CASH AND CASH EQUIVALENTS             (92,663)       (87,654)
      Balance at beginning of period                  179,694        200,226
      Balance at end of period                        $87,031       $112,572


    Note: As a result of the acquisition of After Hours Formalwear on April 9,
    2007, cash flows for the three months ended May 5, 2007 include the cash
    flows of After Hours for the 26 days beginning April 10, 2007.

SOURCE Men's Wearhouse