– 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
Released May 28, 2008