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Men's Wearhouse Reports Fiscal 2008 First Quarter Results

- Q1 2008 GAAP diluted EPS was $0.19 and adjusted diluted EPS was $0.20, compared with Q1 2007 GAAP diluted EPS of $0.75 and pro forma diluted EPS of $0.59

- Company estimates Q2 2008 GAAP diluted EPS in a range of $0.69 to $0.73 and adjusted diluted EPS in a range of $0.75 to $0.79

- Company estimates fiscal 2008 GAAP diluted EPS in a range of $1.65 to $1.75 and adjusted diluted EPS in a range of $1.75 to $1.85

- Conference call at 5:00 pm eastern today

    HOUSTON, May 28 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW)
today announced its consolidated financial results for the first quarter ended
May 3, 2008.


                  First Quarter Sales Summary - Fiscal 2008
                                          Total Sales  Comparable Store Sales
                U.S. dollars, in millions   Change %          Change %
                Current Year   Prior Year             Current Year  Prior Year
    Total Company  $491.1       $496.1       - 1.0%
      MW           $327.9(a)    $332.3(a)    - 1.3%    - 6.4% (b)   + 0.3% (b)
      K&G          $100.6       $110.0       - 8.5%   - 14.1%       - 6.2%
        United
         States    $441.3       $450.8       - 2.1%    - 8.5%       - 1.3%
      Moores        $49.8        $45.3      + 10.1%    - 4.2% (c)   + 5.8% (c)

    (a) Includes retail stores and ecommerce as well as the MW Tux stores
        resulting from the acquisition of After Hours on April 9, 2007.
    (b) Comparable store sales do not include ecommerce or MW Tux stores.  MW
        Tux stores will be included in Q2 of fiscal 2008.
    (c) Comparable store sales change is based on the Canadian dollar.

Diluted earnings per share were $0.19 for the first quarter ended May 3, 2008. Adjusted diluted earnings per share were $0.20 after excluding $0.9 million of closure costs incurred in connection with the Company's previously announced planned closure of the Canadian based manufacturing facility operated by its subsidiary, Golden Brand. This compares to adjusted diluted earnings per share guidance given March 12, 2008 of $0.20 to $0.24. Diluted earnings per share for the prior year first quarter, after pro forma adjustments for the April 9, 2007 After Hours acquisition as if it had occurred on January 29, 2006, were $0.59 (refer to the Company's first quarter fiscal 2007 quarterly report on Form 10-Q and comments below). Prior year first quarter GAAP diluted earnings per share were $0.75.

FIRST QUARTER HIGHLIGHTS

The condensed consolidated statements of earnings attached to this press release reflect the Company's GAAP results of operations for the three months ended May 3, 2008 and May 5, 2007, as well as pro forma results of operations for the three months ended May 5, 2007. Since the acquisition of After Hours occurred on April 9, 2007, the inclusion of its off-season operations as if the acquisition had occurred prior to the beginning of the 2007 first quarter reduces that quarter's diluted earnings per share from $0.75 on a GAAP basis to $0.59 on a pro forma basis and allows for a comparison of the first quarter results on a comparable operations basis. Accordingly, the following highlights of the Company's operating results are based on a comparison of the pro forma results for the 2007 first quarter with the GAAP results for the 2008 first quarter.

    -- Total company sales decreased 6.7% for the quarter.

         - Apparel sales, representing 79.11% of 2008 total net sales,
           decreased 4.6% due primarily to decreases in the Company's
           comparable store sales driven by a reduction in store traffic
           levels.

         - Tuxedo rental revenues, representing 14.29% of 2008 total net
           sales, decreased 18.6%.  This decline was primarily driven by
           reduced tuxedo rental sales at the Company's stores acquired from
           After Hours as well as the sale of the acquired wholesale tuxedo
           rental operations in July 2007.  These declines were partially
           offset by increases at the Company's Men's Wearhouse stores.

    -- Gross margin before occupancy costs, as a percentage of total net
       sales, decreased 28 basis points from pro forma 58.38% to 58.10%.
       Increases in clothing product margins, as a percentage of related
       sales, of 97 basis points were offset by a reduction in the percentage
       of total net sales derived from tuxedo rentals from 16.38% to 14.29% as
       well as deleveraging of fixed costs related to alteration and other
       services.

    -- Occupancy costs increased, as a percentage of total net sales, by 271
       basis points from pro forma 12.27% to 14.98% primarily due to the
       deleveraging effect of reduced comparable store sales, increased rental
       rates for new and renewed leases and increased depreciation expense
       from the rebranding of After Hours stores to MW Tux.

    -- Selling, general, and administrative expenses, as a percentage of total
       net sales, increased 378 basis points from pro forma 36.26% to 40.04%.
       This increase was primarily due to the deleveraging effect of reduced
       net sales.

    -- Operating income was $15.1 million compared to pro forma $51.8 million
       for the same period last year and net income was $9.9 million compared
       to pro forma $32.1 million.

    -- The effective tax rate for the 2008 first quarter was 30.6%.

SECOND QUARTER 2008 GUIDANCE

In the summer of 2008, the Company expects to close the Canadian based manufacturing facility operated by its subsidiary, Golden Brand. The company estimates the pre tax cost to close the facility will be approximately $8.1 million or the equivalent of $0.10 per diluted share outstanding for the fiscal year. The pre tax cost for the first quarter was $0.9 million or the equivalent of $0.01 per diluted share outstanding. The pre tax cost for the second quarter is estimated at $5.2 million or the equivalent of $0.06 per diluted share outstanding and the pre tax cost for the third quarter is estimated at $2.0 million or the equivalent of $0.02 per diluted share outstanding. Due to the effect of rounding, the sum of the quarterly per share amounts does not equal the full year.

Excluding the Golden Brand closure costs for the second quarter, the Company expects adjusted diluted earnings per share to be $0.75 to $0.79. Including these costs, GAAP diluted earnings per share are expected to be $0.69 to $0.73. This guidance assumes same store sales at MW, including MW Tux stores, to decrease in the mid to high single digit range, at K&G to decrease in the low teens digit range and at Moores to decrease in the low single digit range.

The guidance includes an estimated effective tax rate of approximately 38.8% for the second quarter. The fully diluted shares outstanding are estimated to be 51.4 million.

FISCAL 2008 GUIDANCE

Based on its actual results for the first quarter, the Company believes achieving a level of operating performance for the second half of the fiscal year anticipated in its initial annual guidance provided on March 12, 2008 will be challenging under current market conditions.

The Company, therefore, is updating its adjusted diluted earnings per share outlook for the year to a range of $1.75 to $1.85 excluding the Golden Brand closure costs. Including these costs, GAAP diluted earnings per share are expected to be $1.65 to $1.75. This annual guidance reflects a comparable store sales decrease in the mid single digits for TMW, a low double digit decrease at K&G, and a low single digit decrease for Moores.

CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 p.m. Eastern time on Wednesday, May 28, 2008, company management will host a conference call and real time web cast to review the fiscal first quarter and its outlook for fiscal 2008.

    To access the conference call, dial 303-262-2137. 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
June 4, 2008 by calling 303-590-3000 and entering the access code of 11112683#
or a webcast archive will be available free on the website for approximately
90 days.

    STORE INFORMATION
                                 May 3, 2008              May 5, 2007

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

    Men's Wearhouse            571      3,203.1          544      3,034.1

    MW Tux (a)                 492        662.0          509        647.3

    Moores, Clothing for Men   116        721.2          116        722.6

    K&G (b)                    106      2,451.2           98      2,278.7

    Total                    1,285      7,037.5        1,267      6,682.7


    (a)  MW Tux stores resulting from the acquisition of After Hours on
         April 9, 2007.
    (b)  90 and 80 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 1,285 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 the MW Tux (formerly After Hours) stores carry a limited selection. Tuxedo rentals are available in the Men's Wearhouse, Moores and MW 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.

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  (281) 776-7200
               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 3, 2008, May 5, 2007 AND PRO FORMA May 5, 2007
                    (In thousands, except per share data)

                                           Three Months Ended
                                                                Pro
                                    % of             % of      Forma   % of
                           2008     Sales     2007   Sales      2007   Sales

    Net sales:
      Clothing product  $388,491    79.11% $403,500  81.33%  $407,018  77.37%
      Tuxedo rental
       services           70,194    14.29%   59,860  12.07%    86,194  16.38%
      Alteration and
       other services     32,411     6.60%   32,758   6.60%    32,886   6.25%
        Total net sales  491,096   100.00%  496,118 100.00%   526,098 100.00%

    Cost of sales:
      Clothing product
       including
       buying and
       distribution
       costs             168,491    34.31%  177,843  35.85%   180,457  34.30%
      Tuxedo rental
       services           12,565     2.56%    9,669   1.95%    14,345   2.73%
      Alteration and
       other services     24,731     5.04%   24,156   4.87%    24,156   4.59%
      Occupancy costs     73,554    14.98%   58,177  11.73%    64,571  12.27%
        Total cost
         of sales        279,341    56.88%  269,845  54.39%   283,529  53.89%

    Gross margin         211,755    43.12%  226,273  45.61%   242,569  46.11%

    Selling, general
     and administrative
     expenses            196,650    40.04%  161,010  32.45%   190,789  36.26%

    Operating income      15,105     3.08%   65,263  13.15%    51,780   9.84%

    Interest income         (821)   -0.17%   (1,632) -0.33%    (1,154) -0.22%
    Interest expense       1,599     0.33%    1,086   0.22%     1,297   0.25%

    Earnings before
     income taxes         14,327     2.92%   65,809  13.26%    51,637   9.82%

    Provision for
     income taxes          4,384     0.89%   24,876   5.01%    19,570   3.72%

    Net earnings          $9,943     2.02%  $40,933   8.25%   $32,067   6.10%

    Net earnings per
     share:
      Basic                $0.19              $0.76             $0.59
      Diluted              $0.19              $0.75             $0.59

    Weighted average
     common shares
     outstanding:
      Basic               51,470             53,963            53,963
      Diluted             51,864             54,709            54,709

    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)
                                                      May 3,         May 5,
                                                       2008           2007
                     ASSETS

    Current assets:
      Cash and cash equivalents                      $76,660        $87,031
      Short-term investments                           9,668         38,500
      Accounts receivable, net                        26,858         30,171
      Inventories                                    488,137        474,413
      Other current assets                            58,007         63,767

        Total current assets                         659,330        693,882
    Property and equipment, net                      406,944        364,256
    Tuxedo rental product, net                        92,405         83,824
    Goodwill                                          62,481         58,517
    Other assets, net                                 26,182         19,726

        Total assets                              $1,247,342     $1,220,205

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                              $121,193       $121,162
      Accrued expenses and other current
       liabilities                                   131,436        152,885
      Income taxes payable                                 -         21,135

        Total current liabilities                   $252,629       $295,182
    Long-term debt                                   106,870         78,105
    Deferred taxes and other liabilities              67,498         64,680

        Total liabilities                            426,997        437,967

    Shareholders' equity:
      Preferred stock                                      -              -
      Common stock                                       697            694
      Capital in excess of par                       305,601        293,874
      Retained earnings                              886,386        784,053
      Accumulated other comprehensive income          40,198         30,481
        Total                                      1,232,882      1,109,102

    Treasury stock, at cost                        (412,537)      (326,864)

    Total shareholders equity                        820,345        782,238

    Total liabilities and equity                  $1,247,342     $1,220,205



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

                          FOR THE THREE MONTHS ENDED
                         May 3, 2008 AND May 5, 2007
                                (In thousands)

                                                        Three Months Ended
                                                       2008           2007
    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings                                    $9,943        $40,933
      Non-cash adjustments to net earnings:
        Depreciation and amortization                 23,698         17,006
        Tuxedo rental product amortization             8,066          6,926
        Other                                          2,126          2,313
      Changes in assets and liabilities              (36,577)       (26,909)

          Net cash provided by operating activities    7,256         40,269

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                           (29,860)       (11,661)
      Net non-cash assets acquired                         -        (69,747)
      Purchases of available-for-sale investments          -       (137,955)
      Proceeds from sales of available-for-sale
       investments                                    50,254         99,455
      Other                                                -          1,191

          Net cash provided by (used in) investing
           activities                                 20,394       (118,717)

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Cash dividends paid                             (3,632)        (2,729)
      Proceeds from revolving credit facility        100,600              -
      Payments on revolving credit facility          (83,975)             -
      Proceeds from issuance of common stock             609          3,670
      Purchase of treasury stock                        (156)       (19,290)
      Other                                           (1,336)           378

          Net cash provided by (used in) financing
           activities                                 12,110        (17,971)

      Effect of exchange rate changes                 (2,546)         3,756

    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  37,214        (92,663)
      Balance at beginning of period                  39,446        179,694
      Balance at end of period                       $76,660        $87,031

SOURCE Men's Wearhouse