– Q3 2007 GAAP diluted EPS was $0.69 versus $0.58 in 2006
– Company estimates Q4 2007 GAAP diluted EPS in a range of $0.43 to $0.48
– Company estimates Fiscal 2007 GAAP diluted EPS in a range of $2.87 to $2.92
– Conference call at 5:00 pm eastern today
HOUSTON, Nov. 28 /PRNewswire-FirstCall/ — The Men’s Wearhouse (NYSE: MW)
today announced its consolidated financial results for the third quarter ended
November 3, 2007.
THIRD QUARTER RESULTS
Third Quarter Sales Summary - Fiscal 2007
U.S. dollars, in Total Sales Comparable Store Sales
millions Change % Change %
Current Year Prior Year Current Year Prior Year
Total Company $512.1 $430.1 +19.1%
MW $292.9(a) $280.3(a) +4.5% +0.6% +4.3%
After Hours $61.2 (b) (b) (b) (b)
K&G $87.7 $89.9 -2.5% -11.3% +0.2%
United States $451.7 $376.8 +19.9% -2.1% +3.4%
Moores $60.5 $53.3 +13.5% +0.6%(c) +13.0%(c)
Year-To-Date Sales Summary - Fiscal 2007
U.S. dollars, in Total Sales Comparable Store Sales
millions Change % Change %
Current Prior Current Prior
Year Year Year Year
Total Company $1,577.6 $1,325.2 +19.0 %
MW $895.8(a) $859.5(a) +4.2 % +1.5 % +4.3%
After Hours $177.3 (b) (b) (b) (b)
K&G $298.8 $288.2 +3.7% -8.0% +0.0%
United States $1,399.0 $1,166.8 +19.9% -0.8% +3.3%
Moores $178.6 $158.5 +12.7% +5.1%(c) +8.3%(c)
(a) Includes retail stores and ecommerce.
(b) After Hours was acquired on April 9, 2007 and will be excluded from
comparable store sales reporting until Q2 of fiscal 2008.
(c) Comparable store sales change is based on the Canadian dollar.
Third quarter 2007 operating income was $59.2 million compared to
$48.8 million last year and net income was $37.1 million compared to
$31.8 million last year. GAAP diluted earnings per share were $0.69 for the
third quarter ended November 3, 2007 compared to $0.58 last year. After
Hours, after acquisition funding costs, contributed $0.05 to the GAAP diluted
earnings per share for the third quarter.
Year-to-date fiscal 2007 operating income was $207.1 million compared to
$150.8 million last year and net income was $132.2 million compared to
$96.3 million last year. GAAP diluted earnings per share were $2.44 for the
year-to-date period ended November 3, 2007 compared to $1.76 last year. After
Hours, after acquisition funding costs, contributed $0.37 to the GAAP diluted
earnings per share for the year-to-date period ended November 3, 2007.
THIRD Quarter Highlights
-- Total company sales increased 19.1% for the quarter. Apparel sales,
representing 75.0% of total sales, increased 4.8%. Tuxedo rental
revenues, representing 18.8% of total sales, increased 178.6%.
Tuxedo rental revenues excluding After Hours increased 13.6%.
-- Comparable store sales decreased 2.1% for the Company's United
States based stores, below the Company's guidance of flat to +1%.
This under plan performance was primarily related to weaker
traffic trends and lower average ticket realized at the Company's
K&G group of stores.
-- Comparable store sales increased 0.6% for the Company's Canadian
based stores, below the Company's guidance of +2% to +4%.
-- Unseasonably warmer weather conditions impacted the company's
outwear clothing categories thereby contributing to the company's
under plan comparable store sales.
-- Gross margin, as a percentage of sales, increased 385 basis points
from 43.10% to 46.95%. This improvement is due to both organic and
acquired growth in tuxedo rental revenues as well as continued gains
in merchandise margins.
-- Selling, general, and administrative expenses as a percentage of sales
increased 364 basis points from 31.76% to 35.40%. This increase is
primarily due to the inclusion of the operations of After Hours.
-- Operating income, as a percentage of sales, increased 21 basis points
from 11.34% to 11.55%.
-- The effective tax rate for the quarter of 37.4% was inline with the
Company's guidance.
-- During the quarter the Company repurchased 818,000 shares for a total
of $34.1 million.
FOURTH QUARTER 2007 GUIDANCE AND UPDATED FISCAL 2007 OUTLOOK
For the fourth quarter of 2007, the Company expects same store sales
growth in the U.S. to be in the negative low single digit range and in Canada
to be in a range of flat to +2%. GAAP diluted earnings per share are expected
to be in the range of $0.43 to $0.48.
After Hours revenues for the fourth quarter are estimated in a range of
$24 million to $26 million. After consideration of acquisition funding costs,
After Hours is expected to be dilutive to fiscal fourth quarter 2007 in a
range of $0.31 to $0.32 per diluted share outstanding. It should be noted
that the seasonality of After Hours revenues is heavily concentrated in April,
May and June. Second quarter, followed by third quarter, is the highest
revenue quarter for After Hours and first and fourth quarters are considered
off season. As a result, After Hours typically has income in the second and
third quarters and losses in the first and fourth quarters.
For the fiscal year ending February 2, 2008, the Company expects GAAP
diluted earnings per share in a range of $2.87 to $2.92. Same store sales
changes in the U.S. for fiscal 2007 are expected to be a decrease of 1% to
flat and in Canada are expected to be in a range of +2% to +4%.
After Hours revenues for fiscal 2007 are estimated in a range of
$201 million to $203 million. After consideration of acquisition funding
costs, After Hours is expected to be accretive to fiscal 2007 in a range of
$0.05 to $0.06 per diluted share outstanding.
For the fourth quarter, the guidance includes an estimated effective tax
rate of approximately 37.3% and fully diluted shares outstanding of
53.3 million. For the full year, the estimated effective tax rate is 36.6%
and the fully diluted shares outstanding are estimated to be 54.0 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 third quarter
2007 and provide an outlook for fiscal fourth quarter and an update for fiscal
2007.
To access the conference call, dial 303-262-2125. 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
December 5, 2007 and by calling 303-590-3000 and entering the access code of
11099472#, or a webcast archive will be available free on the website for
approximately 90 days.
STORE INFORMATION
November 3, 2007 October 28, 2006 February 3, 2007
Number Number Number
of Sq. Ft. of Sq. Ft. of Sq. Ft.
Stores (000's) Stores (000's) Stores (000's)
Men's Wearhouse 560 3,132.3 538 2,979.9 543 3,014.8
After Hours 493 654.8 (a) (a) (a) (a)
Moores, Clothing
for Men 116 717.8 116 719.1 116 722.7
K&G (b) 103 2,392.4 89 2,112.2 93 2,201.6
Total 1,272 6,897.3 743 5,811.2 752 5,939.1
(a) After Hours was acquired on April 9, 2007.
(b) 83, 68 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 1,272 stores. The stores carry a
full selection of designer, brand name and private label suits, sport coats,
furnishings and accessories, including tuxedo rentals available in the Men’s
Wearhouse, Moores, After Hours, and select K&G 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
November 3, 2007 AND October 28, 2006
(In thousands, except per share data)
Three Months Ended
% of % of
2007 Sales 2006 Sales
Net sales $512,136 100.00% $430,068 100.00%
Cost of goods sold,
including buying,
distribution and
occupancy costs 271,665 53.05% 244,690 56.90%
Gross margin 240,471 46.95% 185,378 43.10%
Selling, general and
administrative expenses 181,307 35.40% 136,610 31.76%
Operating income 59,164 11.55% 48,768 11.34%
Interest income (1,352) (0.26%) (2,461) (0.57%)
Interest expense 1,304 0.25% 2,346 0.55%
Earnings before income taxes 59,212 11.56% 48,883 11.37%
Provision for income taxes 22,145 4.32% 17,109 3.98%
Net earnings $37,067 7.24% $31,774 7.39%
Net earnings per share:
Basic $0.70 $0.60
Diluted $0.69 $0.58
Weighted average common shares
outstanding:
Basic 53,141 53,098
Diluted 53,775 54,903
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE NINE MONTHS ENDED
November 3, 2007 AND October 28, 2006
(In thousands, except per share data)
Nine Months Ended
% of % of
2007 Sales 2006 Sales
Net sales $1,577,600 100.00% $1,325,219 100.00%
Cost of goods sold,
including buying,
distribution and
occupancy costs 836,358 53.01% 757,889 57.19%
Gross margin 741,242 46.99% 567,330 42.81%
Selling, general and
administrative expenses 534,139 33.86% 416,580 31.43%
Operating income 207,103 13.13% 150,750 11.38%
Interest income (4,655) (0.30%) (7,249) (0.55%)
Interest expense 3,513 0.22% 6,826 0.52%
Earnings before income taxes 208,245 13.20% 151,173 11.41%
Provision for income taxes 76,019 4.82% 54,922 4.14%
Net earnings $132,226 8.38% $96,251 7.26%
Net earnings per share:
Basic $2.47 $1.81
Diluted $2.44 $1.76
Weighted average common shares
outstanding:
Basic 53,614 53,163
Diluted 54,284 54,715
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
November 3, October 28,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $102,531 $75,093
Short-term investments -- 180,275
Inventories 515,917 481,885
Other current assets 93,335 53,835
Total current assets 711,783 791,088
Property and equipment, net 392,917 277,510
Goodwill 73,674 58,261
Other assets, net 94,324 71,586
Total assets $1,272,698 $1,198,445
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $274,182 $218,495
Long-term debt 92,595 207,310
Deferred taxes and other liabilities 68,294 49,216
Shareholders' equity 837,627 723,424
Total liabilities and equity $1,272,698 $1,198,445
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE NINE MONTHS ENDED
November 3, 2007 AND October 28, 2006
(In thousands)
Nine Months Ended
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $132,226 $96,251
Non-cash adjustments to net earnings:
Depreciation and amortization 57,293 45,191
Tuxedo rental product amortization 36,976 14,627
Other 7,987 2,771
Changes in assets and liabilities (91,398) (108,027)
Net cash provided by operating
activities 143,084 50,813
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (90,394) (47,552)
Net non-cash assets acquired (68,253) --
Purchases of available-for-sale investments (277,480) (197,920)
Proceeds from sales of available-for-sale
investments 277,480 80,420
Other (91) (913)
Net cash used in investing
activities (158,738) (165,965)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (9,186) (8,072)
Proceeds from issuance of common stock 6,323 7,583
Purchase of treasury stock (78,080) (11,512)
Other 1,195 1,161
Net cash used in financing activities (79,748) (10,840)
Effect of exchange rate changes 18,239 859
DECREASE IN CASH AND CASH EQUIVALENTS (77,163) (125,133)
Balance at beginning of period 179,694 200,226
Balance at end of period $102,531 $75,093
SOURCE The Men’s Wearhouse, Inc.
Released November 28, 2007