Exhibit 99.1
     
The Men’s Wearhouse, Inc.   (MEN'S WEARHOUSE LOGO)
     
News Release   For Immediate Release
MEN’S WEARHOUSE REPORTS
FISCAL 2006 FIRST QUARTER RESULTS
  Q1 2006 GAAP diluted EPS was $0.53 versus $0.41 last year
 
  Company estimates Q2 2006 GAAP and adjusted diluted EPS in a range of $0.53 to $0.55 and $0.55 to $0.57, respectively
 
  Results and estimates include a number of significant items, refer to attached reconciliation tables
 
  Conference call at 5:00 pm eastern today
HOUSTON – May 17, 2006 – The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended April 29, 2006.
FIRST QUARTER RESULTS
                                 
First Quarter Sales Summary — Fiscal 2006
    U.S. dollars, in millions   Total Sales   Comparable Store
    Current Year   Prior Year   Change %   Sales Change %
 
Total Company
  $ 434.6     $ 411.6       5.6 %        
 
United States
  $ 394.4     $ 375.8       4.9 %     2.7 %
 
Canada
  $ 40.2     $ 35.8       12.2 % (A)     3.9 %
 
 
(A)   Total sales change % using Canadian dollars was 4.8%.
First quarter 2006 operating income was $46.4 million compared to $36.9 million last year, and net income was $28.9 million compared to $22.7 million last year. GAAP diluted earnings per share were $0.53 for the first quarter ended April 29, 2006 compared to $0.41 last year. Adjusted diluted earnings per share for the 2006 fiscal first quarter were $0.55 per share compared to adjusted diluted earnings per share of $0.46 last year. For additional information regarding adjusted diluted earnings per share, please see the table included below as well as the non-GAAP reconciliations provided at the end of this release.

Page 1


 

FIRST QUARTER HIGHLIGHTS
    SALES - Comparable store sales of 2.7% for the company’s United States based stores were in line with the company’s initial guidance of 2% to 3% and compared to the prior year quarter increase of 10.9%. Continued gains in store traffic levels and tuxedo rental activity were key factors driving current year results.
 
    GROSS MARGIN - The increase in gross margins was driven by year over year improvements in merchandise margins which stems from lower product costs. Lower comparable store sales increases in the quarter compared to that of the prior year quarter contributed to higher fixed occupancy costs, as a percentage of sales, and partially offset the improvements in merchandise margins. Total gross margins gains were stronger than the company’s initial plans driven primarily by greater than expected tuxedo rental revenues.
 
    SG&A EXPENSES - Increases in selling, general and administrative expenses, as a percentage of sales, were driven by increases in payroll and stock option expenses. These increases, as a percentage of sales, were partially offset by the non-recurrence of prior period costs incurred in winding down the company’s retail test concept of Eddie Rodriguez. Total selling, general and administrative expenses, as a percentage of sales, were lower than the company’s initial plans driven primarily by lower advertising expenses.
 
    SHARE REPURCHASES – The Company did not repurchase any shares during the quarter under its $100 million authorization. Weighted average diluted shares outstanding decreased 2% over the prior year quarter from 55.834 million shares to 54.719 million shares.
SECOND QUARTER 2006 GUIDANCE AND UPDATED FISCAL 2006 OUTLOOK
For the second quarter of 2006, the company expects 3% to 4% same store sales growth in the U.S. and in Canada and GAAP diluted earnings per share to be in the range of $0.53 to $0.55. Adjusted diluted earnings per share for the second quarter are expected to be in the range $0.55 to $0.57.
For the fiscal year ending February 3, 2007 (which is a 53-week year under the retail calendar), the company expects GAAP diluted earnings per share in a range of $2.33 to $2.40. Adjusted diluted earnings per share for the fiscal year are expected to be in a range of $2.35 to $2.42. Same store sales increases in the U.S. and Canada for fiscal 2006 are expected to range between 2% to 4% with an effective tax rate of approximately 36.5% and fully diluted shares outstanding of 54.9 million.

Page 2


 

IMPACT OF SIGNIFICANT ITEMS
In order to aid investors’ understanding of the Company’s results and to improve comparability of financial information from period to period, explanatory non-GAAP reconciliation tables are included at the end of this press release. Summarized earnings per share information from these tables as well as guidance for the second quarter of fiscal 2006 and full year follows:
Summary Reconciliation of GAAP diluted EPS to Adjusted diluted EPS
                                                                   
    HISTORICAL RESULTS (1) (2)   GUIDANCE
    Fiscal 2005   Fiscal 2006   Fiscal 2006
    1Q   2Q   3Q   4Q     YR   1Q   2Q   YR
GAAP Diluted EPS
    0.41       0.43       0.44       0.60         1.88       0.53       0.53 - 0.55       2.33 - 2.40  
 
                                                                 
Adjustments (3)
                                                                 
Eddie Rodriguez Costs (4)
    0.05       0.06                         0.11                          
Stock Based Compensation Reported in Earnings (5)
            0.01       0.01       0.01         0.03       0.02       0.02       0.08  
53rd Week Impact (6)
                                                              (0.06 )
Foreign Earnings Repatriation (7)
                            0.07         0.07                          
Discrete Tax Items (8)
                    (0.04 )     (0.02 )       (0.05 )                        
                       
Net Adjustments
    0.05       0.07       (0.02 )     0.07         0.17       0.02       0.02       0.02  
                       
 
                                                                 
Adjusted Diluted EPS
    0.46       0.50       0.41       0.67         2.04       0.55       0.55 - 0.57       2.35 - 2.42  
                       
 
1.   Reflects a three-for-two stock split in the form of a stock dividend effective at the close of business on June 13, 2005.
 
2.   Due to the effect of rounding, the sum of the individual per share amounts may not equal the total shown.
 
3.   Net of tax.
 
4.   The company ceased operating its test of the new retail concept “Eddie Rodriguez” in the second quarter of fiscal 2005.
 
5.   In fiscal 2005 the company did not grant non-qualified stock options (NQO’s) to key employees, opting instead to issue primarily deferred stock units (DSU’s). In 2006 the company began recognizing stock option expense as it adopted FASB No. 123R. Amounts reported in earnings for 2005 include primarily DSU’s and for 2006 include mostly DSU’s and NQO’s.
 
6.   Fiscal 2006 will include one additional week (for a total of 53 weeks) as the company reports its fiscal operations on a retail calendar.
 
7.   The company incurred a one-time tax expense of $3.9 million ($0.07 per share) related to the repatriation of foreign earnings under the provisions of the American Jobs Creation Act.
 
8.   Adjustments to tax reserves associated with favorable developments on certain outstanding income tax matters.
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 2006.
To access the conference call, dial 303-262-2211. 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 May 25th by calling 303-590-3000 and entering the access code of 11060381, or a webcast archive will be available free on the website for approximately 90 days.

Page 3


 

STORE INFORMATION
                                                 
    April 29, 2006   April 30, 2005   January 28, 2006
    Number of   Sq. Ft.   Number of   Sq. Ft.   Number of   Sq. Ft.
    Stores   (000’s)   Stores   (000’s)   Stores   (000’s)
 
Men’s Wearhouse
    529       2,921.6       520       2,847.3       526       2,898.4  
 
Moores, Clothing for Men
    116       719.8       114       706.2       116       719.8  
 
K&G (B)
    80       1,901.0       76       1,804.9       77       1,835.2  
 
Total
    725       5,542.4       710       5,358.4       719       5,453.4  
(B) 56, 50 and 52 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 725 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 and Moores 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 and other factors described herein and in the company’s annual report on Form 10-K for the year ended January 28, 2006.
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 (713) 592-7200
Ken Dennard, DRG & E (713) 529-6600

Page 4


 

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

(Unaudited)
FOR THE THREE MONTHS ENDED
April 29, 2006 AND April 30, 2005

(In thousands, except per share data)
                                 
    Three Months Ended  
            % of             % of  
    2006     Sales     2005     Sales  
Net sales
  $ 434,564       100.00 %   $ 411,649       100.00 %
Cost of goods sold, including buying, distribution and occupancy costs
    251,735       57.93 %     245,866       59.73 %
     
Gross margin
    182,829       42.07 %     165,783       40.27 %
 
                               
Selling, general and administrative expenses
    136,441       31.40 %     128,909       31.32 %
     
 
                               
Operating income
    46,388       10.67 %     36,874       8.96 %
 
                               
Interest income
    (1,995 )     (0.46 %)     (794 )     (0.19 %)
Interest expense
    2,191       0.50 %     1,487       0.36 %
     
 
                               
Earnings before income taxes
    46,192       10.63 %     36,181       8.79 %
 
                               
Provision for income taxes
    17,336       3.99 %     13,477       3.27 %
     
 
                               
Net earnings
  $ 28,856       6.64 %   $ 22,704       5.52 %
     
 
                               
Net earnings per share (1):
                               
Basic
  $ 0.54             $ 0.42          
 
                           
Diluted
  $ 0.53             $ 0.41          
 
                           
 
                               
Weighted average common shares outstanding (1):
                               
Basic
    53,132               54,255          
 
                           
Diluted
    54,719               55,834          
 
                           
 
(1)   All earnings per share and weighted average common share information reflects a three-for-two stock split in the form of a stock dividend effective at the close of business on June 13, 2005.

Page 5


 

     
(MEN'S WEARHOUSE  LOGO)
  THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
(Unaudited)
                 
    April 29,     April 30,  
    2006     2005  
ASSETS
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 112,572     $ 139,495  
Short-term investments
    151,525        
Accounts receivable, net
    23,234       21,816  
Inventories
    432,445       422,519  
Other current assets
    30,815       33,856  
 
           
 
               
Total current assets
    750,591       617,686  
Property and equipment, net
    268,083       261,460  
Goodwill
    58,284       55,510  
Other assets, net
    74,690       59,550  
 
           
 
               
Total assets
  $ 1,151,648     $ 994,206  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities
  $ 227,626     $ 240,628  
Long-term debt
    207,379       130,000  
Deferred taxes and other liabilities
    51,690       54,245  
Shareholders’ equity
    664,953       569,333  
 
           
 
               
Total liabilities and equity
  $ 1,151,648     $ 994,206  
 
           

Page 6


 

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

(Unaudited)
FOR THE THREE MONTHS ENDED
April 29, 2006 AND April 30, 2005

(In thousands)
                 
    Three Months Ended  
    2006     2005  
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net earnings
  $ 28,856     $ 22,704  
Non-cash adjustments to net earnings:
               
Depreciation and amortization
    15,019       16,456  
Other
    67       (2,161 )
Changes in assets and liabilities
    (33,160 )     (17,868 )
 
           
 
               
Net cash provided by operating activities
    10,782       19,131  
 
           
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (12,295 )     (17,976 )
Purchases of available-for-sale investments
    (103,475 )      
Proceeds from sales of available-for-sale investments
    14,725        
Other
    (16 )     (21 )
 
           
 
               
Net cash used in investing activities
    (101,061 )     (17,997 )
 
           
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Cash dividends paid
    (2,686 )      
Proceeds from issuance of common stock
    4,237       13,925  
Purchase of treasury stock
          (40,490 )
Other
    440        
 
           
 
               
Net cash provided by (used in) financing activities
    1,991       (26,565 )
 
           
 
               
Effect of exchange rate changes
    634       (82 )
 
           
 
               
DECREASE IN CASH AND CASH EQUIVALENTS
    (87,654 )     (25,513 )
Balance at beginning of period
    200,226       165,008  
 
           
Balance at end of period
  $ 112,572     $ 139,495  
 
           

Page 7


 

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(A Non-GAAP Financial Measure)

(In thousands, except per share amounts)
Use of Non-GAAP Financial Measures
We have provided non-GAAP adjusted earnings per share information. This non-GAAP financial information is provided to enhance the user’s overall understanding of the company’s current financial performance. Specifically, we believe the non-GAAP adjusted results provide useful information to both management and investors by excluding certain expense items that we believe are not indicative of our core operating results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. The following are the reconciliations of this non-GAAP information and reflect the three-for-two stock split in the form of a stock dividend effective at the close of business on June 13, 2005. Due to the effect of rounding, the sum of the individual per share amounts may not equal the total shown.
Non-GAAP Financial Measures (in thousands, except per share information)
                         
    Three Months Ended April 30, 2005  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 411,649     $ (1,006 )   $ 410,643  
Cost of goods sold, including buying, distribution and occupancy costs
    245,866       (1,631 )     244,235  
 
                 
Gross margin
    165,783       625       166,408  
Selling, general and administrative expenses
    128,909       (4,036 )     124,873  
 
                 
Operating Income
    36,874       4,661       41,535  
Interest income
    (794 )           (794 )
Interest expense
    1,487             1,487  
 
                 
Earnings before income taxes
    36,181       4,661       40,842  
Provision for income taxes
    13,477       1,736       15,213  
 
                 
Net earnings
  $ 22,704     $ 2,925     $ 25,629  
 
                 
Net earnings per diluted share
  $ 0.41     $ 0.05     $ 0.46  
 
                 
Weighted average diluted common shares outstanding
    55,834               55,834  
 
                   
(1)   The net earnings adjustments are as follows:
  a.   $2.886 million, net of tax, or $.05 diluted earnings per share in net losses from the Eddie Rodriguez stores and
 
  b.   $39 thousand, net of tax, related to stock based compensation.

Page 8


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended June 30, 2005  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 423,576     $ (785 )   $ 422,791  
Cost of goods sold, including buying, distribution and occupancy costs
    255,280       (3,485 )     251,795  
 
                 
Gross margin
    168,296       2,700       170,996  
Selling, general and administrative expenses
    129,892       (3,495 )     126,397  
 
                 
Operating Income
    38,404       6,195       44,599  
Interest income
    (771 )           (771 )
Interest expense
    1,512             1,512  
 
                 
Earnings before income taxes
    37,663       6,195       43,858  
Provision for income taxes
    13,277       2,183       15,460  
 
                 
Net earnings
  $ 24,386     $ 4,012     $ 28,398  
 
                 
Net earnings per diluted share
  $ 0.43     $ 0.07     $ 0.50  
 
                 
Weighted average diluted common shares outstanding
    56,490               56,490  
 
                   
                         
    Three Months Ended October 29, 2005  
            (2)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 392,695     $     $ 392,695  
Cost of goods sold, including buying, distribution and occupancy costs
    234,866             234,866  
 
                 
Gross margin
    157,829             157,829  
Selling, general and administrative expenses
    123,380       (928 )     122,452  
 
                 
Operating Income
    34,449       928       35,377  
Interest income
    (557 )           (557 )
Interest expense
    1,428             1,428  
 
                 
Earnings before income taxes
    33,578       928       34,506  
Provision for income taxes
    9,499       2,278       11,777  
 
                 
Net earnings
  $ 24,079     $ (1,350 )   $ 22,729  
 
                 
Net earnings per diluted share
  $ 0.44     $ (0.02 )   $ 0.41  
 
                 
Weighted average diluted common shares outstanding
    54,971               54,971  
 
                   
(1)   The net earnings adjustments are as follows:
  a.   $3.379 million, net of tax, or $0.06 diluted earnings per share in net losses from the Eddie Rodriguez stores and
 
  b.   $633 thousand, net of tax, or $0.01 diluted earnings per share related to stock based compensation.
(2)   The net earnings adjustments are as follows:
  a.   $666 thousand, net of tax, or $0.01 diluted earnings per share related to stock based compensation and
 
  b.   ($2.016) million or ($0.04) diluted earnings per share in discrete tax items.

Page 9


 

Non-GAAP Financial Measures (continued)
                         
    Three Months Ended January 28, 2006  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 496,978     $     $ 496,978  
Cost of goods sold, including buying, distribution and occupancy costs
    291,751             291,751  
 
                 
Gross margin
    205,227             205,227  
Selling, general and administrative expenses
    149,658       (939 )     148,719  
 
                 
Operating Income
    55,569       939       56,508  
Interest income
    (1,158 )           (1,158 )
Interest expense
    1,461             1,461  
 
                 
Earnings before income taxes
    55,266       939       56,205  
Provision for income taxes
    22,532       (2,631 )     19,901  
 
                 
Net earnings
  $ 32,734     $ 3,570     $ 36,304  
 
                 
Net earnings per diluted share
  $ 0.60     $ 0.07     $ 0.67  
 
                 
Weighted average diluted common shares outstanding
    54,166               54,166  
 
                   
                         
    Twelve Months Ended January 28, 2006  
            (2)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 1,724,898     $ (1,791 )   $ 1,723,107  
Cost of goods sold, including buying, distribution and occupancy costs
    1,027,763       (5,116 )     1,022,647  
 
                 
Gross margin
    697,135       3,325       700,460  
Selling, general and administrative expenses
    531,839       (9,398 )     522,441  
 
                 
Operating Income
    165,296       12,723       178,019  
Interest income
    (3,280 )           (3,280 )
Interest expense
    5,888             5,888  
 
                 
Earnings before income taxes
    162,688       12,723       175,411  
Provision for income taxes
    58,785       3,566       62,351  
 
                 
Net earnings
  $ 103,903     $ 9,157     $ 113,060  
 
                 
Net earnings per diluted share
  $ 1.88     $ 0.17     $ 2.04  
 
                 
Weighted average diluted common shares outstanding
    55,365               55,365  
 
                   
(1)   The net earnings adjustments are as follows:
  a.   $556 thousand, net of tax, or $0.01 diluted earnings per share related to stock based compensation
 
  b.   ($898) thousand or ($0.02) diluted earnings per share in discrete tax items and
 
  c.   $3.912 million or $0.07 diluted earnings per share in foreign earnings repatriation tax expense.
(2)   The net earnings adjustments are as follows:
  a.   $6.265 million, net of tax, or $0.11 diluted earnings per share in net losses from the Eddie Rodriguez stores
 
  b.   $1.894 million, net of tax, or $0.03 diluted earnings per share related to stock based compensation
 
  c.   ($2.914) million or ($0.05) diluted earnings per share in discrete tax items and
 
  d.   $3.912 million or $0.07 diluted earnings per share in foreign earnings repatriation tax expense.

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Non-GAAP Financial Measures (continued)
                         
    Three Months Ended April 29, 2006  
            (1)     NON-GAAP  
    GAAP     NON-GAAP     Adjusted  
    Results     Adjustments     Results  
Net sales
  $ 434,564     $     $ 434,564  
Cost of goods sold, including buying, distribution and occupancy costs
    251,735       (143 )     251,592  
 
                 
Gross margin
    182,829       143       182,972  
Selling, general and administrative expenses
    136,441       (1,485 )     134,956  
 
                 
Operating Income
    46,388       1,628       48,016  
Interest income
    (1,995 )           (1,995 )
Interest expense
    2,191             2,191  
 
                 
Earnings before income taxes
    46,192       1,628       47,820  
Provision for income taxes
    17,336       611       17,947  
 
                 
Net earnings
  $ 28,856     $ 1,017     $ 29,873  
 
                 
Net earnings per diluted share
  $ 0.53     $ 0.02     $ 0.55  
 
                 
Weighted average diluted common shares outstanding
    54,719               54,719  
 
                   
 
(1)   The adjustments are related to stock based compensation.

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