– Q1 2010 GAAP diluted EPS was $0.26 compared with Q1 2009 GAAP diluted EPS of $0.10
– Company provides guidance for second quarter of fiscal 2010
– Conference call at 5:00 pm Eastern today
HOUSTON, June 9 /PRNewswire-FirstCall/ — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended May 1, 2010.
____________________________________________________________________________ | || |___________________________________________________________________________|| |First Quarter Sales Summary – Fiscal 2010 || |___________________________________________________________________________|| | | | | || | | |Total Sales|Comparable Store Sales || | |U.S. dollars, in millions|Change % |Change % || |_____________|_________________________|___________|_______________________|| | |Current Year|Prior Year | |Current Year|Prior Year|| |_____________|____________|____________|___________|____________|__________|| |Total Company|$ 473.5 |$ 464.1 |2.0% | | || |_____________|____________|____________|___________|____________|__________|| |MW |$ 318.3(a) |$ 310.9(a) |2.4% |2.4% (b) |- 7.0% (b)|| |_____________|____________|____________|___________|____________|__________|| |K&G |$ 98.3 |$ 104.5 |- 6.0% |- 4.9% |2.3% || |_____________|____________|____________|___________|____________|__________|| |United States|$ 426.1 |$ 425.0 |0.2% |0.5% |- 4.7% || |_____________|____________|____________|___________|____________|__________|| |Moores |$ 47.4 |$ 39.1 |21.3% |0.2% (c) |- 4.3% (c)|| |_____________|____________|____________|___________|____________|__________|| |(a) Total sales from retail stores and ecommerce. || | || |(b) Comparable store sales do not include ecommerce. || | || |(c) Comparable store sales change is based on the Canadian dollar. || |___________________________________________________________________________||
Diluted earnings per share were $0.26 for the first quarter ended May 1, 2010. This compares to diluted earnings per share guidance given March 10, 2010 of $0.12 to $0.16. Prior year first quarter GAAP diluted earnings per share were $0.10.
FIRST Quarter REVIEW
-- Total Company sales increased 2.0% for the quarter.
o Clothing product sales, representing 77.8% of fiscal first quarter
2010 total net sales, increased 2.6% due mainly to a favorable change
in the U.S./Canadian dollar exchange rate and an increase in Men's
Wearhouse comparable store sales resulting from increased store
traffic levels.
o Tuxedo rental sales, representing 15.2% of fiscal first quarter 2010
total net sales, increased 1.0%.
-- Gross margin before occupancy costs, as a percentage of total net sales,
increased 105 basis points from 56.1% to 57.2%. Clothing product
margins, as a percentage of related sales, increased 122 basis points
due primarily to different promotional offerings, as well as the mix of
products on promotion, in 2010 compared to 2009 and lower product costs.
Tuxedo rental margins, as a percentage of related sales, increased 115
basis points due primarily to lower product costs.
-- Occupancy costs decreased, as a percentage of total net sales, by 92
basis points from 15.6% to 14.7%. On an absolute dollar basis, occupancy
costs decreased 4.0% from $72.6 million in the prior year to $69.7
million due primarily to lower depreciation costs.
-- Selling, general, and administrative expenses were $179.7 million in the
current year and increased 0.2% from the prior year's SG&A of $179.2. As
a percentage of total net sales, SG&A decreased 67 basis points from
38.6% to 37.9%.
-- Operating income was $21.4 million or 4.5% of total net sales compared
to operating income of $8.8 million or 1.9% of total net sales for the
same period last year.
-- Cash and cash equivalent balances as of the end of the first quarter of
2010 were $219.6 million.
-- Total inventories of $435.4 million declined 2.8% from the prior year
first quarter of $448.0 million.
-- Current maturities of long-term debt were $45.8 million as of the end of
the first quarter of 2010.
SECOND QUARTER 2010 GUIDANCE
-- For the second quarter of the fiscal year, the Company expects GAAP
diluted earnings per share in a range of $0.75 to $0.78.
-- The Company anticipates comparable store sales at its MW stores to
increase in the low single digit range, at K&G a decrease in the low to
mid single digit range and at Moores a flat to low single digit
increase. Included in this outlook is a low double digit increase in
comparable store tuxedo rental revenues.
-- Total gross profit for the second quarter is expected to increase in the
high single digit range from the prior year. Occupancy costs are
expected to decrease in a low single digit range in absolute dollar
terms. Selling, general and administrative expenses are expected to
increase in the high single digit range from the prior year excluding
the $3.2 million gift card breakage income recognized in the prior year
second quarter. SG&A expenses excluding marketing expenses are expected
to increase in the mid single digit range over the adjusted prior year
quarter.
-- This guidance includes an estimated effective tax rate of 37.5% for the
second quarter and an estimated effective tax rate of 36.0% for the full
year.
-- Fully diluted shares outstanding of 52.765 million are estimated for the
second quarter.
UPDATED CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 p.m. Eastern time on Wednesday, June 9, 2010, Company management will host a conference call and real time web cast to review the fiscal first quarter and its outlook for the second quarter of fiscal 2010.
To access the conference call, dial 480-629-9770. 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 June 16, 2010 by calling 303-590-3030 and entering the access code of 4307183#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
May 1, 2010 May 2, 2009 January 30, 2010
Sq. Ft. Sq. Ft. Sq. Ft.
Number of Number of
Stores (000's) Stores (000's) Number of Stores (000's)
Men's Wearhouse 582 3,292.7 581 3,276.7 581 3,284.4
Men's Wearhouse
and Tux 447 614.1 478 651.9 454 623.4
Moores,
Clothing for
Men 117 735.5 117 732.7 117 734.6
K&G (a) 106 2,465.6 108 2,488.4 107 2,475.6
Total 1,252 7,107.9 1,284 7,149.7 1,259 7,118.0
(a) 95, 94 and 94 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 1,252 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 Men’s Wearhouse and Tux stores carry a limited selection. Tuxedo rentals are available in the Men’s Wearhouse, Moores and Men’s Wearhouse and Tux stores. The Company operates websites at www.menswearhouse.com, www.mooresclothingformen.com and www.kgstores.com.
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 fiscal year ended January 30, 2010.
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 (281) 776-7000
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 1, 2010 AND May 2, 2009
(In thousands, except per share data)
Three Months Ended Variance
% of % of Basis
2010 Sales 2009 Sales Dollar % Points
Net sales:
Clothing product $ 368,371 77.80% $ 359,062 77.36% $ 9,309 2.59% 0.44
Tuxedo rental
services 72,154 15.24% 71,419 15.39% 735 1.03% (0.15)
Alteration and
other services 32,941 6.96% 33,653 7.25% (712) (2.12%) (0.29)
Total net sales 473,466 100.00% 464,134 100.00% 9,332 2.01% 0.00
Total cost of
sales 272,394 57.53% 276,145 59.50% (3,751) (1.36%) (1.96)
Gross margin (a) 201,072 42.47% 187,989 40.50% 13,083 6.96% 1.96
Selling, general
and administrative
expenses 179,650 37.94% 179,213 38.61% 437 0.24% (0.67)
Operating income 21,422 4.52% 8,776 1.89% 12,646 144.10% 2.63
Net interest (225) (0.05%) (160) (0.03%) (65) (40.63%) (0.01)
Earnings before
income taxes 21,197 4.48% 8,616 1.86% 12,581 146.02% 2.62
Provision for
income taxes 7,589 1.60% 3,360 0.72% 4,229 125.86% 0.88
Net earnings $ 13,608 2.87% $ 5,256 1.13% $ 8,352 158.90% 1.74
Net earnings per
diluted common
share (b) $ 0.26 $ 0.10
Weighted average
diluted common
shares
outstanding: 52,628 51,955
(a) Gross margin as a percentage of related sales:
Three Months Ended Variance
2010 % of 2009 % of Basis
Related Related
Sales Sales Dollar % Points
Clothing
margin $ 201,058 54.58% $ 191,605 53.36% $ 9,453 4.93% 1.22
Tuxedo
margin 60,828 84.30% 59,387 83.15% 1,441 2.43% 1.15
Alteration
and other
services
margin 8,877 26.95% 9,563 28.42% (686) (7.17%) (1.47)
Occupancy
costs (69,691) (14.72%) (72,566) (15.63%) 2,875 3.96% 0.92
Gross margin $ 201,072 42.47% $ 187,989 40.50% $ 13,083 6.96% 1.96
(b) Calculated based on net earnings less net earnings allocated to
participating securities.
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
May 1, May 2,
2010 2009
ASSETS
Current assets:
Cash and cash equivalents $ 219,562 $ 107,538
Short-term investments - 17,707
Accounts receivable, net 24,640 24,858
Inventories 435,351 448,018
Other current assets 68,830 59,752
Total current assets 748,383 657,873
Property and equipment, net 336,771 378,510
Tuxedo rental product, net 101,731 120,083
Goodwill 60,780 57,622
Other assets, net 16,690 12,439
Total assets $ 1,264,355 $ 1,226,527
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 99,720 $ 142,984
Accrued expenses and other current liabilities 136,183 127,868
Income taxes payable 2,826 3,461
Current maturities of long-term debt 45,780 -
Total current liabilities 284,509 274,313
Long-term debt - 39,213
Deferred taxes and other liabilities 62,741 63,955
Total liabilities 347,250 377,481
Shareholders' equity:
Preferred stock - -
Common stock 707 702
Capital in excess of par 329,030 316,034
Retained earnings 962,834 925,881
Accumulated other comprehensive income 37,304 19,055
Treasury stock, at cost (412,770) (412,626)
Total shareholders' equity 917,105 849,046
Total liabilities and equity $ 1,264,355 $ 1,226,527
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED
May 1, 2010 AND May 2, 2009
(In thousands)
Three Months Ended
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 13,608 $ 5,256
Non-cash adjustments to net earnings:
Depreciation and amortization 18,690 22,222
Tuxedo rental product amortization 6,978 7,644
Other 9,335 7,867
Changes in assets and liabilities 663 20,313
Net cash provided by operating activities 49,274 63,302
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (11,099) (15,035)
Net cash used in investing activities (11,099) (15,035)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 783 506
Payments on revolving credit facility - (25,000)
Cash dividends paid (4,756) (3,664)
Other financing activities (2,037) (1,697)
Net cash used in financing activities (6,010) (29,855)
Effect of exchange rate changes 1,379 1,714
INCREASE IN CASH AND CASH EQUIVALENTS 33,544 20,126
Balance at beginning of period 186,018 87,412
Balance at end of period $ 219,562 $ 107,538
SOURCE Men’s Wearhouse
Released June 9, 2010