– Q4 2008 GAAP diluted EPS was $0.03 and adjusted loss per share was $0.06 compared with Q4 2007 GAAP diluted EPS of $0.28
– Fiscal 2008 GAAP diluted EPS was $1.13 and adjusted diluted EPS was $1.17 compared with 2007 GAAP diluted EPS of $2.73 and 2007 pro-forma diluted EPS of $2.57
– Company provides guidance for the first half of fiscal 2009
– Conference call at 5:00 pm Eastern today
HOUSTON, March 11 /PRNewswire-FirstCall/ — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the fourth quarter and fiscal year ended January 31, 2009.
Fourth Quarter Sales Summary - Fiscal 2008
U.S. dollars, Total Sales Comparable Store
in millions Change % Sales Change %
Current Prior Current Prior
Year Year Year Year
Total Company $476.4 $535.0 -11.0%
MW $315.8(a) $340.3(a) -7.2% -9.7%(b) -5.4%(b)
K&G $98.6 $109.0 -9.5% -10.7% -17.2%
United
States $424.5 $463.9 -8.5% -9.9% -8.6%
Moores $51.9 $71.1 -27.0% -10.5%(c) -7.3%(c)
Year-To-Date Sales Summary - Fiscal 2008
U.S. dollars, Total Sales Comparable Store
in millions Change % Sales Change %
Current Prior Current Prior
Year Year Year Year
Total Company $1,972.4 $2,112.6 -6.6%
MW $1,322.0(a) $1,413.3(a) -6.5% -9.0%(b) -0.4%(b)
K&G $376.0 $407.8 -7.8% -11.7% -10.9%
United
States $1,742.2 $1,862.9 -6.5% -9.6 % -3.0%
Moores $230.2 $249.7 -7.8% -5.6 %(c) +1.5%(c)
(a) Includes retail stores and ecommerce as well as stores resulting
from the acquisition of After Hours on April 9, 2007.
(b) Comparable store sales do not include ecommerce. Stores from the
After Hours acquisition are included beginning Q2 of fiscal 2008.
(c) Comparable store sales change is based on the Canadian dollar.
Diluted earnings per share were $0.03 for the fourth quarter ended January 31, 2009. Adjusted loss per share was $0.06. This excludes a $5.8 million (net of tax) or $0.11 per diluted share outstanding gain from an eminent domain sale of a distribution center and a $1.2 million (net of tax) or $0.02 per diluted share outstanding non-cash fixed asset impairment charge.
Diluted earnings per share were $1.13 for fiscal year 2008. Adjusted diluted earnings per share were $1.17. This excludes a $6.6 million (net of tax) or $0.13 per diluted share outstanding cost to close the Canadian based manufacturing facility operated by the Company’s subsidiary, Golden Brand, a $5.8 million (net of tax) or $0.11 per diluted share outstanding gain from an eminent domain sale of a distribution center and a$1.2 million (net of tax) or $0.02 per diluted share outstanding non-cash fixed asset impairment charge.
FOURTH QUARTER REVIEW
-- Total Company sales decreased 11.0% for the quarter.
-- Clothing product sales, representing 85.4% of fiscal fourth
quarter 2008 total net sales, decreased 12.8% due to decreases in
the Company's comparable store sales primarily driven by a
reduction in store traffic levels.
-- Tuxedo rental sales, representing 7.5% of fiscal fourth quarter
2008 total net sales, increased 3.0%.
-- Gross margin before occupancy costs, as a percentage of total net
sales, decreased 294 basis points from 56.68% to 53.74%. Decreases in
clothing product margins, as a percentage of related sales, of 396
basis points were offset by the impact of the higher margin tuxedo
rental revenues that increased from 6.50% to 7.52% as a percentage of
total sales.
-- Occupancy costs increased, as a percentage of total net sales, by 141
basis points from 13.91% to 15.32% primarily due to the deleveraging
effect of reduced comparable store sales.
-- In the fourth quarter, the Company realized a pretax gain of $8.8
million from an eminent domain sale of a distribution center and
incurred a pretax non-cash fixed asset impairment charge in the amount
of $1.8 million. Selling, general, and administrative expenses,
excluding these items, decreased 7.1% from the prior year quarter of
$207.3 million to $192.6 million due primarily to cost-cutting
measures implemented during the quarter.
-- Operating loss excluding the $8.8 million gain on the distribution
center sale and the $1.8 million impairment charge was $9.6 million or
negative 2.0% of total net sales compared to $21.5 million or 4.0% of
total net sales for the same period last year.
-- The Company realized an income tax benefit for the quarter due to
favorable developments on certain outstanding income tax matters and a
true up of the tax provision for the full year.
FISCAL 2009 GUIDANCE
Due primarily to the lack of forward visibility as to macro economic conditions, the Company is implementing modifications to its forward guidance practices beginning with fiscal 2009. The Company will provide specific financial related guidance for the first half of the fiscal year and plans to update that guidance when it reports first quarter earnings. The Company has provided below additional guidance around certain elements which management believes will influence the Company’s annual results. Finally, the Company will eliminate its past practice of providing mid quarter updates on earnings per share guidance.
For the first half of the fiscal year, the Company expects GAAP diluted earnings per share in a range of $0.45 to $0.65.
The Company anticipates comparable store sales of its retail apparel business to decline in a range of 6% to 10% and comparable store sales of its tuxedo rental revenues to increase in a range of 7% to 9%. Total Company sales are expected to decrease in the 4% to 7% range.
The Company expects first quarter results, on a diluted EPS basis, to be break even to a mid single digit range loss and that the second quarter will drive the majority of first half estimated earnings results which is due to the tuxedo rental business seasonality favoring the second fiscal quarter of the year.
Gross margins before occupancy costs for the first and second quarter are expected to be below the prior year as the Company continues a more aggressive posture in strengthening its value proposition for customers. Occupancy costs are expected to be flat to a modest reduction for the first half in dollar terms; however, as a percentage of revenues, these costs will deleverage from the prior year rate.
The Company has implemented a variety of cost containment and operational changes that have resulted in an immediate reduction in payroll and benefit costs in the fourth quarter of fiscal 2008. Further, the actions are expected to drive reported selling, general and administrative expenses, excluding advertising costs, for the first half of the year down by 7% to 9% from the prior year. This expected rate of reduction will enable the Company to realize expense leverage for the first half of the year.
Net interest expense is expected to decline for the first half and full year due to positive increases in free cash flow.
This guidance includes an estimated annual effective tax rate of approximately 38.0%; however, the Company expects continuing variability in quarterly tax rates.
Fully diluted shares outstanding of 52.1 million are estimated for the year. The Company’s share repurchase program will be influenced by several factors including business and market conditions.
The Company anticipates opening new stores throughout the year. Currently the aggregate number of new openings is expected to be up to 10; however, the Company remains flexible to take advantage of real estate opportunities that may arise.
Capital expenditures for the full year are targeted in a range of $50 million to $55 million and depreciation and amortization is estimated at $85 million.
CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 p.m. Eastern time on Wednesday, March 11, 2009, Company management will host a conference call and real time web cast to review the fiscal fourth quarter and full year 2008 and provide its outlook for fiscal 2009.
To access the conference call, dial 303-262-2140. 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 March 18, 2009 by calling 303-590-3000 and entering the access code of 11124766# or a webcast archive will be available free on the website for approximately 90 days. STORE INFORMATION January 31, 2009 February 2, 2008 Number of Sq. Ft. Number of Sq. Ft. Stores (000's) Stores (000's) Men's Wearhouse 580 3,263.1 563 3,152.6 Men's Wearhouse and Tux 489 665.0 489 652.0 Moores, Clothing for Men 117 729.3 116 719.8 K&G (a) 108 2,493.4 105 2,428.8 Total 1,294 7,150.8 1,273 6,953.2 (a) 93 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 1,294 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.
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 subsequent Forms 10-Q.
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
January 31, 2009 AND February 2, 2008
(In thousands, except per share data)
Three Months Ended
% of % of
2008 Sales 2007 Sales
Net sales:
Clothing product $406,690 85.37% $466,221 87.15%
Tuxedo rental services 35,806 7.52% 34,752 6.50%
Alteration and other services 33,864 7.11% 33,985 6.35%
Total net sales 476,360 100.00% 534,958 100.00%
Cost of sales:
Clothing product including
buying and distribution
costs 187,871 39.44% 196,900 36.81%
Tuxedo rental services 9,946 2.09% 9,591 1.79%
Alteration and other services 22,557 4.74% 25,230 4.72%
Occupancy costs 72,996 15.32% 74,422 13.91%
Total cost of sales 293,370 61.59% 306,143 57.23%
Gross margin 182,990 38.41% 228,815 42.77%
Selling, general and
administrative expenses 185,550 38.95% 207,266 38.74%
Operating income (loss) (2,560) (0.54)% 21,549 4.03%
Interest income 333 0.07% 1,332 0.25%
Interest expense (683) (0.14)% (1,533) (0.29)%
Earnings (loss) before income
taxes (2,910) (0.61)% 21,348 3.99%
Provision (benefit) for income
taxes (4,399) (0.92)% 6,533 1.22%
Net earnings $1,489 0.31% $14,815 2.77%
Net earnings per share:
Basic $0.03 $0.28
Diluted $0.03 $0.28
Weighted average common shares
outstanding:
Basic 51,768 52,187
Diluted 52,037 52,708
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE TWELVE MONTHS ENDED
January 31, 2009, February 2, 2008 AND PRO FORMA February 2, 2008
(In thousands, except per share data)
Twelve Months Ended
% of % of Pro Forma % of
2008 Sales 2007 Sales 2007 Sales
Net sales:
Clothing
product $1,515,704 76.84% $1,656,167 78.40% $1,659,685 77.46%
Tuxedo
rental
services 329,951 16.73% 325,272 15.40% 351,606 16.41%
Alteration
and other
services 126,763 6.43% 131,119 6.21% 131,247 6.13%
Total net
sales 1,972,418 100.00% 2,112,558 100.00% 2,142,538 100.00%
Cost of
sales:
Clothing
product
including
buying and
distribution
costs 672,629 34.10% 709,260 33.57% 711,874 33.23%
Tuxedo rental
services 59,515 3.02% 61,663 2.92% 65,904 3.08%
Alteration
and other
services 96,165 4.88% 99,577 4.71% 99,577 4.65%
Occupancy
costs 293,597 14.89% 272,001 12.88% 278,395 12.99%
Total cost
of sales 1,121,906 56.88% 1,142,501 54.08% 1,155,750 53.94%
Gross margin 850,512 43.12% 970,057 45.92% 986,788 46.06%
Selling,
general and
administrative
expenses 760,041 38.53% 741,405 35.10% 771,184 35.99%
Operating
income 90,471 4.59% 228,652 10.82% 215,604 10.06%
Interest
income 2,592 0.13% 5,987 0.28% 5,509 0.26%
Interest
expense (4,300) (0.22)% (5,046) (0.24)% (5,257) (0.25)%
Earnings before
income taxes 88,763 4.50% 229,593 10.87% 215,856 10.07%
Provision for
income taxes 29,919 1.52% 82,552 3.91% 77,411 3.61%
Net earnings $58,844 2.98% $147,041 6.96% $138,445 6.46%
Net earnings
per share:
Basic $1.14 $2.76 $2.60
Diluted $1.13 $2.73 $2.57
Weighted average
common shares
outstanding:
Basic 51,645 53,258 53,258
Diluted 51,944 53,890 53,890
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)
January 31, February 2,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $87,412 $39,446
Short-term investments 17,121 59,921
Accounts receivable, net 16,315 18,144
Inventories 440,099 492,423
Other current assets 70,668 61,061
Total current assets 631,615 670,995
Property and equipment, net 387,472 410,167
Tuxedo rental product, net 96,691 84,089
Goodwill 57,561 65,309
Other assets, net 14,391 25,907
Total assets $1,187,730 $1,256,467
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $108,800 $146,713
Accrued expenses and other current
liabilities 111,404 124,952
Income taxes payable 19 5,590
Total current liabilities 220,223 277,255
Long-term debt 62,916 92,399
Deferred taxes and other liabilities 62,443 70,876
Total liabilities 345,582 440,530
Shareholders' equity:
Preferred stock - -
Common stock 700 696
Capital in excess of par 315,404 305,209
Retained earnings 924,288 880,084
Accumulated other comprehensive income 14,292 43,629
Total 1,254,684 1,229,618
Treasury stock, at cost (412,536) (413,681)
Total shareholders' equity 842,148 815,937
Total liabilities and equity $1,187,730 $1,256,467
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE TWELVE MONTHS ENDED
January 31, 2009 AND February 2, 2008
(In thousands)
Twelve Months Ended
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $58,844 $147,041
Non-cash adjustments to net earnings:
Depreciation and amortization 90,665 80,296
Tuxedo rental product amortization 38,180 42,067
Other 12,707 15,073
Changes in assets and liabilities (70,906) (79,600)
Net cash provided by operating
activities 129,490 204,877
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (88,225) (126,076)
Net non-cash assets acquired - (68,232)
Proceeds from sale of distribution
facility 9,588 -
Purchases of available-for-sale
investments (17,121) (337,401)
Proceeds from sales of
available-for-sale investments 59,921 277,480
Other investing activities 811 (40)
Net cash used in investing
activities (35,026) (254,269)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (14,600) (12,353)
Proceeds from revolving credit
facility 150,600 30,500
Payments on revolving credit facility (130,975) (25,125)
Payments on Canadian term loan (31,880) -
Proceeds from issuance of common
stock 2,853 7,128
Purchase of treasury stock (156) (106,107)
Other financing activities (1,261) 1,543
Net cash used in financing
activities (25,419) (104,414)
Effect of exchange rate changes (21,079) 13,558
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 47,966 (140,248)
Balance at beginning of period 39,446 179,694
Balance at end of period $87,412 $39,446
SOURCE Men’s Wearhouse
Released March 11, 2009