– Q4 2007 GAAP diluted EPS was $0.28 versus $0.95 in 2006
– Fiscal 2007 GAAP diluted EPS was $2.73 versus $2.71 in 2006
– Company estimates Fiscal 2008 GAAP diluted EPS in a range of $1.80 to $2.00
– Estimated Fiscal 2008 GAAP diluted EPS includes $0.10 in non-recurring charges
– Conference call at 5:00 pm eastern today
HOUSTON, March 12 /PRNewswire-FirstCall/ — The Men’s Wearhouse (NYSE: MW)
today announced its consolidated financial results for the fourth quarter and
fiscal year ended February 2, 2008.
Fourth Quarter Sales Summary - Fiscal 2007
Total Sales Comparable Store Sales
U.S. dollars, in millions Change % Change %
Current Year Prior Year(d) Current Year Prior Year
Total
Company $535.0 $556.8 - 3.9%
MW $318.4(a) $349.7(a) - 9.0% - 5.4% + 0.0%
MW Tux (b) $21.9
K&G $109.0 $130.1 - 16.2% - 17.2% - 6.1%
United
States $463.9 $486.7 - 4.7% - 8.6% - 1.5%
Moores $71.1 $70.1 + 1.4% - 7.3%(c) + 9.8%(c)
Year-To-Date Sales Summary - Fiscal 2007
Total Sales Comparable Store Sales
U.S. dollars, in millions Change % Change %
Current Year Prior Year(d) Current Year Prior Year
Total
Company $2,112.6 $1,882.1 + 12.2%
MW $1,214.1(a) $1,209.2(a) + 0.4% - 0.4% + 3.1%
MW Tux (b) $199.2
K&G 407.8 $418.3 - 2.5% - 10.9% - 1.8%
United
States $1,862.9 $ 1,653.5 + 12.7% - 3.0% + 1.9%
Moores $249.7 $228.6 + 9.2% + 1.5%(c) + 8.7%(c)
(a) Includes retail stores and ecommerce.
(b) MW Tux stores resulting from the acquisition of After Hours on
April 9, 2007. They will be excluded from comparable store sales
reporting until Q2 of fiscal 2008.
(c) Comparable store sales change is based on the Canadian dollar.
(d) The company follows the retail 4-5-4 reporting calendar which includes
an extra week in fiscal 2006. Thus, fourth quarter includes 14 weeks
and full year includes 53 weeks.
This year’s 13 week fourth quarter operating income was $21.5 million
compared to $73.2 million for last year’s 14 week quarter and net income was
$14.8 million compared to $52.3 million last year. Diluted earnings per share
were $0.28 for the fourth quarter ended February 2, 2008 compared to $0.95
last year. MW Tux (formerly After Hours), after acquisition funding costs,
decreased the diluted earnings per share for the fourth quarter by $0.37.
Fiscal year 2007’s 52 week operating income was $228.7 million compared to
$223.9 million for last year’s 53 week period and net income was $147.0
million compared to $148.6 million last year. Diluted earnings per share were
$2.73 for the full year compared to $2.71 last year. MW Tux (formerly After
Hours), after acquisition funding costs, increased the diluted earnings per
share for fiscal year 2007 by $0.02.
It should be noted that the seasonality of MW Tux (formerly After Hours)
revenues is heavily concentrated in April, May and June. Second quarter,
followed by third quarter, is the highest revenue quarter and first and fourth
quarters are considered off season. As a result, MW Tux (formerly After
Hours) typically has income in the second and third quarters and losses in the
first and fourth quarters.
FOURTH QUARTER HIGHLIGHTS
-- Total company sales decreased 3.9% for the 13 week 2007 quarter as
compared to the 14 week 2006 quarter. Apparel sales, representing
87.2% of total sales, decreased 7.8%. Tuxedo rental revenues,
representing 6.5% of total sales, increased 130.3%. Tuxedo rental
revenues excluding MW Tux (formerly After Hours) increased 3.9%.
- Comparable store sales decreased 8.6% for the Company's United
States based stores, below the Company's guidance of negative low
single digit range. This under plan performance was primarily
related to weaker traffic trends at both TMW and K&G.
- Comparable store sales decreased 7.3% for the Company's Canadian
based stores, below the Company's guidance of flat to +2%. This
decline in comparable store sales is also a result of weaker
traffic trends.
-- Gross margin, as a percentage of sales, decreased 183 basis points from
44.60% to 42.77% primarily due to the inclusion of the MW Tux (formerly
After Hours) operations which deleveraged occupancy costs due to the
seasonality of the tuxedo business.
-- Selling, general, and administrative expenses as a percentage of sales
increased 728 basis points from 31.46% to 38.74%. This increase is due
to the inclusion of the MW Tux (formerly After Hours) operations,
amplified during the tuxedo off season, as well as the decrease in
apparel sales.
-- The effective tax rate for the quarter was 30.6%.
-- During the quarter, the Company repurchased 1,218,900 shares for a
total of $27.7 million.
2008 GUIDANCE AND HIGHLIGHTS
In the summer of 2008, the Company expects to close its Canadian based
manufacturing facility, operated by its subsidiary, Golden Brand. The company
estimates the pre tax cost to close the facility to be approximately
$8.5 million or the equivalent of $0.10 per diluted share outstanding for the
fiscal year. The estimated pre tax cost for first quarter is $5.5 million or
the equivalent of $0.06 per diluted share outstanding, for second quarter is
$1.3 million or the equivalent of $0.02 per diluted share outstanding and for
third quarter is $1.7 million or the equivalent of $0.02 per diluted share
outstanding.
For the fiscal year, the Company expects adjusted diluted earnings per
share to be $1.90 to $2.10 excluding the Golden Brand closure costs.
Including these costs, diluted earnings per share are expected to be $1.80 to
$2.00. This guidance assumes same store sales in the U.S. to decrease in the
mid single digit range and in Canada to be flat.
For the first quarter, the Company expects adjusted diluted earnings per
share to be $0.20 to $0.24 excluding the Golden Brand closure costs.
Including these costs, diluted earnings per share are expected to be $0.14 to
$0.18. This guidance assumes same store sales in the U.S. to decrease in the
high single digit range and in Canada to decrease in the low single digit
range. MW Tux (formerly After Hours) was acquired at the beginning of April
2007. Thus February and March, which are considered off season, were not
included in first quarter fiscal 2007 results. The February and March diluted
earnings per share impact on first quarter is estimated to be dilutive by
$0.22.
For the second quarter, the Company expects adjusted diluted earnings per
share to be $0.80 to $0.86 excluding the Golden Brand closure costs.
Including these costs, diluted earnings per share are expected to be $0.78 to
$0.84. This guidance assumes same store sales in the U.S., including MW Tux
(formerly After Hours) stores, to decrease in the mid to high single digit
range and in Canada to increase in the low single digit range.
The guidance includes an estimated effective tax rate of approximately
38.3% for the first and second quarters and approximately 37.9% for the full
year. The fully diluted shares outstanding are estimated to be 52.1 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 fourth
quarter and full year 2007 and provide an outlook for fiscal 2008.
To access the conference call, dial 303-262-2130. 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
March 19, 2008 and by calling 303-590-3000 and entering the access code of
11106658#, or a webcast archive will be available free on the website for
approximately 90 days.
STORE INFORMATION
February 2, 2008 February 3, 2007
Number Sq. Ft. Number Sq. Ft.
of Stores (000's) of Stores (000's)
Men's Wearhouse 563 3,152.6 543 3,014.8
MW Tux (a) 489 652.0
Moores, Clothing for Men 116 719.8 116 722.7
K&G (b) 105 2,428.8 93 2,201.6
Total 1,273 6,953.2 752 5,939.1
(a) MW Tux stores resulting from the acquisition of After Hours on
April 9, 2007.
(b) 89 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 1,273 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 (formerly After Hours)
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 and subsequent
Forms 10-Q.
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
February 2, 2008 and February 3, 2007
(In thousands, except per share data)
Three Months Ended
% of % of
2007 Sales 2006 Sales
Net sales $534,958 100.00% $556,845 100.00%
Cost of goods sold,
including buying,
distribution and
occupancy costs 306,143 57.23% 308,470 55.40%
Gross margin 228,815 42.77% 248,375 44.60%
Selling, general and
administrative expenses 207,266 38.74% 175,187 31.46%
Operating income 21,549 4.03% 73,188 13.14%
Interest income (1,332) -0.25% (2,537) -0.46%
Interest expense 1,533 0.29% 2,390 0.43%
Earnings before income
taxes 21,348 3.99% 73,335 13.17%
Provision for income
taxes 6,533 1.22% 21,011 3.77%
Net earnings $14,815 2.77% $52,324 9.40%
Net earnings per share:
Basic $0.28 $0.99
Diluted $0.28 $0.95
Weighted average common
shares outstanding:
Basic 52,187 52,965
Diluted 52,708 54,843
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE TWELVE MONTHS ENDED
February 2, 2008 and February 3, 2007
(In thousands, except per share data)
Twelve Months Ended
% of % of
2007 Sales 2006 Sales
Net sales $2,112,558 100.00% $1,882,064 100.00%
Cost of goods sold,
including buying,
distribution and
occupancy costs 1,142,501 54.08% 1,066,359 56.66%
Gross margin 970,057 45.92% 815,705 43.34%
Selling, general and
administrative expenses 741,405 35.10% 591,767 31.44%
Operating income 228,652 10.82% 223,938 11.90%
Interest income (5,987) -0.28% (9,786) -0.52%
Interest expense 5,046 0.24% 9,216 0.49%
Earnings before income
taxes 229,593 10.87% 224,508 11.93%
Provision for income
taxes 82,552 3.91% 75,933 4.03%
Net earnings $147,041 6.96% $148,575 7.89%
Net earnings per share:
Basic $2.76 $2.80
Diluted $2.73 $2.71
Weighted average common
shares outstanding:
Basic 53,258 53,111
Diluted 53,890 54,749
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
February 2, February 3,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $39,446 $179,694
Short-term investments 59,921 -
Inventories 492,423 448,586
Other current assets 79,205 52,549
Total current assets 670,995 680,829
Property and equipment, net 410,167 289,640
Tuxedo rental product, net 84,089 57,565
Goodwill 65,309 56,867
Other assets, net 25,907 12,051
Total assets $1,256,467 $1,096,952
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $277,255 $226,138
Long-term debt 92,399 72,967
Deferred taxes and other liabilities 70,876 44,075
Shareholders' equity 815,937 753,772
Total liabilities and equity $1,256,467 $1,096,952
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE TWELVE MONTHS ENDED
February 2, 2008 and February 3, 2007
(In thousands)
Twelve Months Ended
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $147,041 $148,575
Non-cash adjustments to net earnings:
Depreciation and amortization 80,296 61,387
Tuxedo rental product amortization 42,067 16,858
Other 15,073 10,144
Changes in assets and liabilities (79,600) (76,170)
Net cash provided by operating activities 204,877 160,794
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (126,076) (72,904)
Net non-cash assets acquired (68,232) -
Net purchases and proceeds from the sales of
available-for-sale investments (59,921) 62,775
Other (40) (1,506)
Net cash used in investing activities (254,269) (11,635)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (12,353) (10,830)
Proceeds from revolving credit facility 5,375 -
Principal payments on debt - (130,000)
Proceeds from issuance of common stock 7,132 10,823
Purchase of treasury stock (106,106) (40,289)
Other 1,538 2,052
Net cash used in financing activities (104,414) (168,244)
Effect of exchange rate changes 13,558 (1,447)
DECREASE IN CASH AND CASH EQUIVALENTS (140,248) (20,532)
Balance at beginning of period 179,694 200,226
Balance at end of period $39,446 $179,694
SOURCE The Men’s Wearhouse, Inc.
Released March 12, 2008