Related Documents
– Q2 2008 GAAP diluted EPS was $0.63 and adjusted diluted EPS was $0.72, compared with Q2 2007 GAAP diluted EPS of $1.00
– Company estimates Q3 2008 GAAP diluted EPS in a range of $0.34 to $0.38 and adjusted diluted EPS in a range of $0.36 to $0.40
– Company estimates fiscal 2008 GAAP diluted EPS in a range of $1.38 to $1.48 and adjusted diluted EPS in a range of $1.50 to $1.60
– Conference call at 5:00 pm eastern today
HOUSTON, Aug. 27 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the second quarter ended August 2, 2008. Second Quarter Sales Summary - Fiscal 2008 Total Comparable Store U.S. dollars, in Sales Sales millions Change % Change % Current Prior Current Prior Year Year Year Year Total Company $545.3 $569.3 -4.2% MW $362.7(a) $386.7(a) -6.2% -7.8%(b) +3.7%(b) K&G $96.4 $101.2 -4.7% -8.9% -6.9% United States $470.0 $496.5 -5.3% -8.0% +1.1% Moores $75.3 $72.8 +3.3% -2.8%(c) +8.4%(c) Year-To-Date Sales Summary - Fiscal 2008 Total Comparable Store U.S. dollars, in Sales Sales millions Change % Change % Current Prior Current Prior Year Year Year Year Total Company $1,036.4 $1,065.5 -2.7% MW $690.6(a) $719.0(a) -3.9% -7.2%(b) +2.0%(b) K&G $197.0 $211.2 -6.7% -11.6% -6.6% United States $911.3 $947.4 -3.8% -8.2% -0.1% Moores $125.1 $118.1 +5.9% -3.3%(c) +7.3%(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. MW Tux stores are included beginning Q2 of fiscal 2008. (c) Comparable store sales change is based on the Canadian dollar.
Diluted earnings per share were $0.63 for the second quarter ended
August 2, 2008. Adjusted diluted earnings per share were $0.72 after
excluding $4.5 million (net of tax), $0.09 per diluted share outstanding, of
closure costs incurred in connection with the Company’s previously announced
planned closure of the Canadian based manufacturing facility operated by the
Company’s subsidiary, Golden Brand. This compares to adjusted diluted
earnings per share guidance given July 9, 2008 of $0.70 to $0.74.
SECOND Quarter Highlights -- Total company sales decreased 4.2% for the quarter. -- Apparel sales, representing 70.81% of 2008 total net sales, decreased 4.0% primarily due to decreases in the Company's comparable store sales driven by a reduction in store traffic levels. -- Tuxedo rental revenues, representing 23.37% of 2008 total net sales, decreased 5.3%. This decline was primarily driven by reduced tuxedo rental sales at the Company's stores acquired from After Hours. 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 27 basis points from 60.20% to 59.93%. Decreases in clothing product margins, as a percentage of related sales, of 110 basis points were offset by an increase in tuxedo rental services gross margin, as a percentage of related sales, of 302 basis points from 80.66% to 83.68%. -- Occupancy costs increased, as a percentage of total net sales, by 154 basis points from 11.99% to 13.53% primarily due to the deleveraging effect of reduced comparable store sales and increased rental rates for new and renewed leases. -- Selling, general, and administrative expenses were $198.9 million. Excluding $7.3 million in costs associated with the closing of Golden Brand, SG&A expenses of $191.6 million were essentially flat compared to the prior year quarter and as a percentage of total net sales increased 144 basis points from 33.69% to 35.13%. This increase was primarily due to the deleveraging effect of reduced net sales. -- Operating income was $54.2 million. Excluding $7.3 million in costs associated with the closing of Golden Brand, operating income was $61.5 million, or 11.27% of total net sales compared to $82.7 million, or 14.52% of total net sales for the same period last year. -- The effective tax rate for the 2008 second quarter was 39.0%.
THIRD QUARTER 2008 GUIDANCE
On July 11, 2008, the Canadian based manufacturing facility operated by
the Company’s subsidiary, Golden Brand, was closed. The Company estimates the
pre tax cost to close the facility will be approximately $9.8 million or the
equivalent of $0.12 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 was
$7.3 million or the equivalent of $0.09 per diluted share outstanding and the
pre tax cost for the third quarter is estimated at $1.6 million or the
equivalent of $0.02 per diluted share outstanding.
Excluding the estimated Golden Brand closure costs for the third quarter
of $0.02 per diluted share outstanding, the Company expects adjusted diluted
earnings per share to be $0.36 to $0.40. Including these costs, GAAP diluted
earnings per share are expected to be $0.34 to $0.38. This guidance assumes
same store sales at MW, including MW Tux stores, to decrease in the high
single digit range, at K&G to decrease in the mid single digit range and at
Moores to decrease in the low single digit range.
The guidance includes an estimated effective tax rate of approximately
38.5% for the third quarter. The fully diluted shares outstanding are
estimated to be 51.9 million.
FISCAL 2008 GUIDANCE
The Company is updating its adjusted diluted earnings per share outlook
for the year to a range of $1.50 to $1.60 excluding the estimated Golden Brand
closure costs of $0.12 per diluted share outstanding. Including these costs,
GAAP diluted earnings per share are expected to be $1.38 to $1.48. This
annual guidance reflects a comparable store sales decrease in the mid single
digits for TMW, a high single 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, August 27, 2008, company
management will host a conference call and real time web cast to review the
fiscal second 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
September 3, 2008 by calling 303-590-3000 and entering the access code of
11117171# or a webcast archive will be available free on the website for
approximately 90 days.
STORE INFORMATION August 2, 2008 August 4, 2007 February 2, 2008 Number Sq. Ft. Number Sq. Ft. Number Sq. Ft. of (000's) of (000's) of (000's) Stores Stores Stores Men's Wearhouse 572 3,213.9 553 3,091.8 563 3,152.6 MW Tux(a) 493 668.6 500 639.5 489 652.0 Moores, Clothing 116 721.2 116 722.6 116 719.8 for Men K&G(b) 106 2,442.6 100 2,326.8 105 2,428.8 Total 1,287 7,046.3 1,269 6,780.7 1,273 6,953.2 (a) MW Tux stores resulting from the acquisition of After Hours on April 9, 2007. (b) 90, 83 and 89 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 1,287 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 and Form 10-Q for the quarter ended May 3, 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 August 2, 2008 AND August 4, 2007 (In thousands, except per share data) Three Months Ended % of % of 2008 Sales 2007 Sales Net sales: Clothing product $386,108 70.81% $402,399 70.68% Tuxedo rental services 127,453 23.37% 134,570 23.64% Alteration and other services 31,728 5.82% 32,377 5.69% Total net sales 545,289 100.00% 569,346 100.00% Cost of sales: Clothing product including buying and distribution costs 172,474 31.63% 175,313 30.79% Tuxedo rental services 20,802 3.81% 26,020 4.57% Alteration and other services 25,204 4.62% 25,250 4.43% Occupancy costs 73,766 13.53% 68,265 11.99% Total cost of sales 292,246 53.59% 294,848 51.79% Gross margin 253,043 46.41% 274,498 48.21% Selling, general and administrative expenses 198,886 36.47% 191,822 33.69% Operating income 54,157 9.93% 82,676 14.52% Interest income (694) (0.13%) (1,671) (0.29%) Interest expense 1,040 0.19% 1,123 0.20% Earnings before income taxes 53,811 9.87% 83,224 14.62% Provision for income taxes 20,986 3.85% 28,998 5.09% Net earnings $32,825 6.02% $54,226 9.52% Net earnings per share: Basic $0.64 $1.01 Diluted $0.63 $1.00 Weighted average common shares outstanding: Basic 51,639 53,739 Diluted 51,862 54,366 THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) FOR THE SIX MONTHS ENDED August 2, 2008, August 4, 2007 AND PRO FORMA August 4, 2007 (In thousands, except per share data) Six Months Ended Pro % of % of Forma % of 2008 Sales 2007 Sales 2007 Sales Net sales: Clothing product $774,599 74.74% $805,899 75.64% $809,417 73.89% Tuxedo rental services 197,647 19.07% 194,430 18.25% 220,764 20.15% Alteration and other services 64,139 6.19% 65,135 6.11% 65,263 5.96% Total net sales 1,036,385 100.00% 1,065,464 100.00% 1,095,444 100.00% Cost of sales: Clothing product including buying and distribution costs 340,965 32.90% 353,157 33.15% 355,771 32.48% Tuxedo rental services 33,367 3.22% 35,689 3.35% 39,930 3.65% Alteration and other services 49,935 4.82% 49,405 4.64% 49,405 4.51% Occupancy costs 147,320 14.21% 126,442 11.87% 132,836 12.13% Total cost of sales 571,587 55.15% 564,693 53.00% 577,942 52.76% Gross margin 464,798 44.85% 500,771 47.00% 517,502 47.24% Selling, general and administrative expenses 395,536 38.16% 352,832 33.12% 382,611 34.93% Operating income 69,262 6.68% 147,939 13.88% 134,891 12.31% Interest income (1,515) (0.15%) (3,303) (0.31%) (2,825) (0.26%) Interest expense 2,639 0.25% 2,209 0.21% 2,420 0.22% Earnings before income taxes 68,138 6.57% 149,033 13.99% 135,296 12.35% Provision for income taxes 25,370 2.45% 53,874 5.06% 48,733 4.45% Net earnings $42,768 4.13% $95,159 8.93% $86,563 7.90% Net earnings per share: Basic $0.83 $1.77 $1.61 Diluted $0.82 $1.74 $1.59 Weighted average common shares outstanding: Basic 51,555 53,851 53,851 Diluted 51,863 54,538 54,538 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) August 2, August 4, 2008 2007 ASSETS Current assets: Cash and cash equivalents $119,248 $85,260 Short-term investments - 49,675 Accounts receivable, net 19,047 21,897 Inventories 457,212 460,800 Other current assets 59,012 66,576 Total current assets 654,519 684,208 Property and equipment, net 400,791 370,066 Tuxedo rental product, net 90,860 76,727 Goodwill 61,538 62,769 Other assets, net 25,351 20,314 Total assets $1,233,059 $1,214,084 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $102,780 $98,441 Accrued expenses and other current liabilities 118,113 138,975 Income taxes payable 9,347 13,715 Total current liabilities 230,240 251,131 Long-term debt 84,221 82,033 Deferred taxes and other liabilities 67,320 61,811 Total liabilities 381,781 394,975 Shareholders' equity: Preferred stock - - Common stock 698 695 Capital in excess of par 308,670 298,866 Retained earnings 915,541 835,024 Accumulated other comprehensive income 38,905 36,063 Total 1,263,814 1,170,648 Treasury stock, at cost (412,536) (351,539) Total shareholders equity 851,278 819,109 Total liabilities and equity $1,233,059 $1,214,084 THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) FOR THE SIX MONTHS ENDED August 2, 2008 AND August 4, 2007 (In thousands) Six Months Ended 2008 2007 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $42,768 $95,159 Non-cash adjustments to net earnings: Depreciation and amortization 46,925 36,757 Tuxedo rental product amortization 21,819 25,646 Other non-cash adjustments 4,606 (1,128) Changes in assets and liabilities (30,511) (44,765) Net cash provided by operating activities 85,607 111,669 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (49,524) (52,712) Net non-cash assets acquired - (68,129) Purchases of available-for-sale investments - (267,530) Proceeds from sales of available-for-sale investments 59,921 217,855 Other investing activities 12 (65) Net cash provided by (used in) investing activities 10,409 (170,581) CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends paid (7,281) (6,015) Proceeds from revolving credit facility 100,600 - Payments on revolving credit facility (105,975) - Proceeds from issuance of common stock 1,181 5,622 Purchase of treasury stock (156) (43,965) Other financing activities (1,320) 1,120 Net cash used in financing activities (12,951) (43,238) Effect of exchange rate changes (3,263) 7,716 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 79,802 (94,434) Balance at beginning of period 39,446 179,694 Balance at end of period $119,248 $85,260
SOURCE Men’s Wearhouse
Released August 27, 2008