– Q3 2009 GAAP diluted EPS was $0.37 compared with Q3 2008 GAAP diluted EPS of $0.28 and adjusted diluted EPS of $0.30
– Company provides guidance for the fourth quarter of fiscal 2009
– Conference call at 5:00 pm Eastern today
HOUSTON, Dec. 8 /PRNewswire-FirstCall/ — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the third quarter ended October 31, 2009.
Third Quarter Sales Summary - Fiscal 2009
-------------------------------------------------------------------------
U.S. dollars, Total Sales Comparable Store
in millions Change % Sales Change %
------------------- --------------------
Current Prior Current Prior
Year Year Year Year
-------------------------------------------------------------------------
Total Company $462.0 $459.7 0.5%
MW $317.6(a) $315.6(a) 0.6% -0.2%(b) -12.1%(b)
K&G $79.3 $80.4 - 1.4% -1.1% -13.0%
United States $406.0 $406.4 - 0.1% -0.4% -12.3%
Moores $56.0 $53.3 5.0% 1.9%(c) 4.9%(c)
Year-To-Date Sales Summary - Fiscal 2009
-------------------------------------------------------------------------
U.S. dollars, Total Sales Comparable Store
in millions Change % Sales Change %
------------------- --------------------
Current Prior Current Prior
Year Year Year Year
-------------------------------------------------------------------------
Total Company $1,452.4 $1,496.1 -2.9%
MW $987.5(a) $1,006.2(a) -1.9% -3.0%(b) -8.9%(b)
K&G $277.4 $277.4 0.0% -0.8% -12.0%
United States $1,292.1 $1,317.7 -1.9% -2.5% -9.6%
Moores $160.3 $178.4 -10.1% -1.9%(c) -3.8%(c)
(a) Includes retail stores and ecommerce.
(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 common share were $0.37 for the third quarter ended October 31, 2009. This compares to diluted earnings per common share guidance given September 9, 2009 of $0.27 to $0.30. Prior year third quarter GAAP diluted earnings per common share were $0.28 and adjusted diluted earnings per common share were $0.30 excluding $1.8 million (pre tax), or $0.02 per diluted share outstanding, in costs incurred in connection with the closure of the Canadian-based manufacturing facility operated by the Company’s subsidiary, Golden Brand.
THIRD QUARTER REVIEW
-- Total Company sales increased 0.5% for the quarter.
-- Clothing product sales, representing 72.3% of fiscal third quarter 2009
total net sales, decreased 0.2% due to decreases in the Company's
comparable store sales primarily driven by a reduction in store traffic
levels offset by higher average ticket.
-- Tuxedo rental sales, representing 21.1% of fiscal third quarter 2009
total net sales, increased 1.2%.
-- Gross margin before occupancy costs, as a percentage of total net sales,
decreased 50 basis points from 60.0% to 59.5%. Clothing product
margins, as a percentage of related sales, decreased 114 basis points
due to increased promotional activities and were offset by higher
alteration service margins and the impact of the higher margin tuxedo
rental revenues. Tuxedo rental revenue increased slightly as a mix of
total sales from 21.0% to 21.1%.
-- Occupancy costs decreased, as a percentage of total net sales, by 27
basis points from 15.9% to 15.7%. On an absolute dollar basis,
occupancy costs decreased 1.2% from $73.3 million in the prior year to
$72.4 million.
-- Selling, general, and administrative expenses were $172.6 million in the
current year and decreased 2.6% from the prior year's adjusted SG&A of
$177.1 million which excludes $1.8 million in costs associated with the
closing of Golden Brand. The decrease is primarily due to cost-cutting
measures and operational efficiencies. As a percentage of total net
sales, adjusted SG&A decreased 118 basis points from 38.5% to 37.4%.
SG&A excluding advertising decreased 4.8% from the adjusted prior year
quarter.
-- Operating income was $30.1 million or 6.5% of total net sales compared
to adjusted operating income of $25.6 million or 5.6% of total net sales
for the same period last year, excluding $1.8 million in Golden Brand
closure costs. Net income was $19.7 million or 4.3% of total net sales
compared to adjusted net income of $15.7 million or 3.4% of total net
sales for the same period last year, which excludes $1.1 million in
Golden Brand closure costs (net of tax).
-- Cash and cash equivalent balances as of the end of the third quarter of
2009 were $198.5 million, an increase of $96.8 million over the cash and
cash equivalent balances plus amounts held in short-term investments as
of the same period last year.
-- Total inventories of $473.6 million declined 3.5% from the prior year
third quarter of $490.8 million.
-- Long term debt as of the end of the third quarter of 2009 was $43.0
million, a decrease of $45.6 million from the same period last year.
FOURTH QUARTER FISCAL 2009 GUIDANCE
The Company anticipates comparable store sales to decrease in the low single digit range at the Men’s Wearhouse. The Moores comparable store sales are expected to be flat to a low single digit increase. The K&G comparable store sales are anticipated to be flat to a low single digit decrease. Total Company sales are expected to decline in low single digit range for the fourth quarter. This includes a low single digit decrease in tuxedo rental revenues.
Gross profit before occupancy costs for the fourth quarter is expected to decline in the low single digit range from the prior year as the Company begins to anniversary a more aggressive posture in strengthening its value proposition for customers. Occupancy costs are expected to be in a flat to a low single digit decrease for the fourth quarter in absolute dollar terms.
Selling, general and administrative expenses for the fourth quarter are expected to be in the range of flat to a 1% increase from the prior year, excluding advertising costs, a prior year pretax non-cash fixed asset impairment charge of $1.8 million and a prior year gain of $8.8 million associated with an eminent domain sale of a distribution center.
This guidance includes an estimated effective tax rate of approximately 39.0% for the fourth quarter. In the prior 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.
The Company’s effective tax rate for the fiscal year is now estimated at 36.8%.
Weighted average fully diluted common shares outstanding are estimated to be 52.5 million for the fourth quarter and 52.3 million for the full year.
For the fourth quarter, the Company expects a GAAP loss per share to be in a range of $0.15 to $0.19.
UPDATED CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 pm Eastern time on Tuesday, December 8, 2009, company management will host a conference call and real time web cast to review the fiscal third quarter and its outlook for the fourth quarter of fiscal 2009.
To access the conference call, dial 480-629-9724. 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 December 15, 2009 by calling 303-590-3030 and entering the access code of 4187917#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
October 31, 2009 November 1, 2008 January 31, 2009
---------------- ---------------- ----------------
Number of Sq. Ft. Number of Sq. Ft. Number of Sq. Ft.
Stores (000's) Stores (000's) Stores (000's)
-------------------------------------------------------------------------
Men's
Wearhouse 581 3,279.8 579 3,248.7 580 3,263.1
-------------------------------------------------------------------------
Men's
Wearhouse
and Tux 469 639.9 495 670.4 489 665.0
-------------------------------------------------------------------------
Moores,
Clothing
for Men 117 734.6 117 727.9 117 729.3
-------------------------------------------------------------------------
K&G (a) 107 2,475.6 107 2,473.0 108 2,493.4
-------------------------------------------------------------------------
Total 1,274 7,129.9 1,298 7,120.0 1,294 7,150.8
(a) 94, 92 and 93 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 1,274 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 January 31, 2009 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
October 31, 2009 AND November 1, 2008
(In thousands, except per share data)
Three Months Ended Variance
--------------------------------- --------------------
% of % of Basis
2009 Sales 2008 Sales Dollar % Points
--------------------------------- --------------------
Net sales:
Clothing
product $333,882 72.27% $334,415 72.75% $(533) (0.16%) (0.48)
Tuxedo
rental
services 97,702 21.15% 96,498 20.99% 1,204 1.25% 0.15
Alteration
and other
services 30,431 6.59% 28,760 6.26% 1,671 5.81% 0.33
--------------------------------- --------------------
Total
net
sales 462,015 100.00% 459,673 100.00% 2,342 0.51% 0.00
Total
cost of
sales 259,341 56.13% 256,949 55.90% 2,392 0.93% 0.23
--------------------------------- --------------------
Gross
margin (a) 202,674 43.87% 202,724 44.10% (50) (0.02%) (0.23)
Selling,
general
and adminis-
trative
expenses 172,595 37.36% 178,955 38.93% (6,360) (3.55%) (1.57)
--------------------------------- --------------------
Operating
income 30,079 6.51% 23,769 5.17% 6,310 26.55% 1.34
Net
interest (19) 0.00% (234) 0.05% (215)(91.88%) (0.05)
--------------------------------- --------------------
Earnings
before
income
taxes 30,060 6.51% 23,535 5.12% 6,525 27.72% 1.39
Provision
for income
taxes 10,375 2.25% 8,948 1.95% 1,427 15.95% 0.30
--------------------------------- --------------------
Net earnings $19,685 4.26% $14,587 3.17% $5,098 34.95% 1.09
================================= =====================
Net earnings
per diluted
common
share (b) $0.37 $0.28
===== =====
Weighted
average
diluted
common
shares
outstanding: 52,442 52,011
====== ======
(a) Gross margin as a percentage of related sales:
Three Months Ended Variance
----------------------------------- -----------------------
% of % of
Related Related Basis
2009 Sales 2008 Sales Dollar % Points
----------------------------------- -----------------------
Clothing
margin $186,528 55.87% $190,622 57.00% $(4,094) (2.15%) (1.14)
Tuxedo
margin 81,205 83.11% 80,296 83.21% 909 1.13% (0.10)
Alteration
and other
services
margin 7,335 24.10% 5,087 17.69% 2,248 44.19% 6.42
Occupancy
costs (72,394)(15.67%) (73,281) (15.94%) 887 1.21% 0.27
----------------------------------- -----------------------
Gross
margin $202,674 43.87% $202,724 44.10% $(50) (0.02%) (0.23)
=================================== =======================
(b) Calculated based on net earnings less net earnings allocated to
participating securities of $196 thousand for the three months ended
October 31, 2009.
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE NINE MONTHS ENDED
October 31, 2009 AND November 1, 2008
(In thousands, except per share data)
Nine Months Ended Variance
------------------------------------- -----------------------
% of % of Basis
2009 Sales 2008 Sales Dollar % Points
------------------------------------- -----------------------
Net sales:
Clothing
product $1,057,246 72.80% $1,109,014 74.13% $(51,768) (4.67%) (1.33)
Tuxedo
rental
services 298,688 20.57% 294,145 19.66% 4,543 1.54% 0.90
Alteration
and other
services 96,423 6.64% 92,899 6.21% 3,524 3.79% 0.43
------------------------------------- -----------------------
Total
net
sales 1,452,357 100.00% 1,496,058 100.00% (43,701) (2.92%) 0.00
Total cost
of sales 823,906 56.73% 828,536 55.38% (4,630) (0.56%) 1.35
------------------------------------- -----------------------
Gross
margin (a) 628,451 43.27% 667,522 44.62% (39,071) (5.85%) (1.35)
Selling,
general and
adminis-
trative
expenses 525,704 36.20% 574,491 38.40% (48,787) (8.49%) (2.20)
------------------------------------- -----------------------
Operating
income 102,747 7.07% 93,031 6.22% 9,716 10.44% 0.86
Net
interest (179) 0.01% (1,358) 0.09% (1,179)(86.82%) (0.08)
------------------------------------- -----------------------
Earnings
before
income
taxes 102,568 7.06% 91,673 6.13% 10,895 11.88% 0.93
Provision
for income
taxes 38,142 2.63% 34,318 2.29% 3,824 11.14% 0.33
------------------------------------ -----------------------
Net
earnings $64,426 4.44% $57,355 3.83% $7,071 12.33% 0.60
===================================== =======================
Net earnings
per diluted
common
share (b) $1.22 $1.10
===== =====
Weighted
average
diluted
common
shares
outstanding: 52,218 51,913
====== ======
(a) Gross margin as a percentage of related sales:
Nine Months Ended Variance
----------------------------------- -----------------------
% of % of
Related Related Basis
2009 Sales 2008 Sales Dollar % Points
----------------------------------- -----------------------
Clothing
margin $572,248 54.13% $624,256 56.29% $(52,008) (8.33%) (2.16)
Tuxedo
margin 248,684 83.26% 244,576 83.15% 4,108 1.68% 0.11
Alteration
and other
services
margin 25,547 26.49% 19,291 20.77% 6,256 32.43% 5.73
Occupancy
costs (218,028) (15.01%) (220,601) (14.75%) 2,573 1.17% (0.27)
----------------------------------- -----------------------
Gross
margin $628,451 43.27% $667,522 44.62% $(39,071) (5.85%) (1.35)
==================================== ========================
(b) Calculated based on net earnings less net earnings allocated to
participating securities of $638 thousand for the nine months ended
October 31, 2009.
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, November 1,
2009 2008
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $198,538 $84,337
Short-term investments - 17,434
Accounts receivable, net 17,304 17,804
Inventories 473,626 490,831
Other current assets 48,997 66,223
------ ------
Total current assets 738,465 676,629
Property and equipment, net 370,191 393,391
Tuxedo rental product, net 100,653 84,702
Goodwill 59,111 58,695
Other assets, net 12,655 18,361
------ ------
Total assets $1,281,075 $1,231,778
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $121,374 $130,944
Accrued expenses and other current
liabilities 106,082 102,347
Income taxes payable 24,743 468
------ ---
Total current liabilities $252,199 $233,759
Long-term debt 42,985 88,608
Deferred taxes and other liabilities 63,087 65,674
------ ------
Total liabilities 358,271 388,041
------- -------
Shareholders' equity:
Preferred stock - -
Common stock 704 699
Capital in excess of par 323,864 312,485
Retained earnings 977,659 926,468
Accumulated other comprehensive income 33,203 16,621
------ ------
Total 1,335,430 1,256,273
Treasury stock, at cost (412,626) (412,536)
-------- --------
Total shareholders' equity 922,804 843,737
------- -------
Total liabilities and equity $1,281,075 $1,231,778
========== ==========
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE NINE MONTHS ENDED
October 31, 2009 AND November 1, 2008
(In thousands)
Nine Months Ended
-------------------------
2009 2008
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $64,426 $57,355
Non-cash adjustments to net earnings:
Depreciation and amortization 64,879 68,699
Tuxedo rental product amortization 33,149 31,739
Other 3,125 11,691
Changes in assets and liabilities (3,179) (81,423)
----- ------
Net cash provided by operating
activities 162,400 88,061
------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (44,466) (69,485)
Purchases of available-for-sale
investments - (17,434)
Proceeds from sales of
available-for-sale investments 19,410 59,921
Other investing activities - 175
--- ---
Net cash used in investing
activities (25,056) (26,823)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 3,032 2,359
Proceeds from revolving credit facility - 150,600
Payments on revolving credit facility (25,000) (105,975)
Payments on Canadian term loan - (31,880)
Cash dividends paid (11,029) (10,936)
Purchase of treasury stock (90) (156)
Other financing activities (1,426) (1,277)
----- -----
Net cash (used in) provided by
financing activities (34,513) 2,735
------ -----
Effect of exchange rate changes 8,295 (19,082)
----- ------
INCREASE IN CASH AND CASH EQUIVALENTS 111,126 44,891
Balance at beginning of period 87,412 39,446
------ ------
Balance at end of period $198,538 $84,337
======== =======
SOURCE Men’s Wearhouse
Released December 8, 2009