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Men's Wearhouse Reports Fiscal 2009 Second Quarter Results
Wednesday, September 09, 2009 4:51 PM


(Source: PRNewswire-FirstCall)trackingHOUSTON, Sept. 9 /PRNewswire-FirstCall/ -- The Men's Wearhouse today announced its consolidated financial results for the second quarter ended August 1, 2009.

                      Second Quarter Sales Summary - Fiscal 2009                      ------------------------------------------                                               Total        Comparable                                              Sales        Store Sales                  U.S. dollars, in millions  Change %       Change %                  -------------------------                -----------                   Current Year  Prior Year          Current Year  Prior Year                   ------------  ----------          ------------  ----------   Total Company      $526.2       $545.3     -3.5%     MW               $359.0(a)    $362.7(a)  -1.0%    -2.0%(b)    -7.8%(b)     K&G               $93.6        $96.4     -2.9%    -3.6%       -8.9%       United States  $461.0       $470.0     -1.9%    -2.4%       -8.0%     Moores            $65.2        $75.3    -13.3%    -3.4%(c)    -2.8%(c)                          Year-To-Date Sales Summary - Fiscal 2009                        ----------------------------------------                                              Total        Comparable                                              Sales        Store Sales                  U.S. dollars, in millions  Change %       Change %                  -------------------------                -----------                   Current Year  Prior Year          Current Year  Prior Year                   ------------  ----------          ------------  ----------    Total Company      $990.3     $1,036.4     -4.4%     MW               $670.0(a)    $690.6(a)  -3.0%    -4.4%(b)    -7.2%(b)     K&G              $198.1       $197.0     +0.6%    -0.6%      -11.6%       United States  $886.0       $911.3     -2.8%    -3.5%       -8.2%     Moores           $104.3       $125.1    -16.6%    -3.7%(c)    -3.3%(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 $0.75 for the second quarter ended August 1, 2009. This compares to diluted earnings per common share guidance given June 8, 2009 of $0.56 to $0.60. Prior year second quarter GAAP diluted earnings per common share were $0.63 and adjusted diluted earnings per common share were $0.72 excluding $7.3 million (pre tax) or $0.09 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.

   SECOND Quarter REVIEW    --  Total Company sales decreased 3.5% for the quarter.       --  Clothing product sales, representing 69.2% of fiscal second           quarter 2009 total net sales, decreased 5.6% due to decreases in           the Company's comparable store sales primarily driven by a           reduction in store traffic levels.        --  Tuxedo rental sales, representing 24.6% of fiscal second quarter           2009 total net sales, increased 1.7%.   --  Gross margin before occupancy costs, as a percentage of total net       sales, decreased 86 basis points from 59.9% to 59.1%.  Clothing       product margins, as a percentage of related sales, decreased 205 basis       points due to increased promotional activities and were modestly       offset by higher alteration service margins and the impact of the       higher margin tuxedo rental revenues that increased as a mix of total       sales from 23.4% to 24.6%.   --  Occupancy costs increased, as a percentage of total net sales, by 36       basis points from 13.5% to 13.9% due to the deleveraging effect of       reduced comparable store sales.  On an absolute dollar basis,       occupancy costs decreased 0.9% from $73.8 million in the prior year to       $73.1 million.   --  Selling, general, and administrative expenses were $173.9 million in       the current year and $198.9 million in the prior year.  During the       quarter, the Company entered into an agreement with a third party       vendor who assumed our unredeemed gift card liability, which resulted       in the recognition of other income from gift card breakage of $3.2       million ($2.0 million after tax or $0.04 per diluted share       outstanding).  Excluding other income from gift card breakage,       adjusted SG&A expenses of $177.1 million decreased 7.6% from the prior       year's adjusted SG&A of $191.6 million which excludes $7.3 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 148 basis       points from 35.1% to 33.7%.  Adjusted SG&A excluding advertising       decreased 9.5% from the prior year quarter.   --  Operating income was $63.9 million or 12.1% of total net sales       compared to adjusted operating income of $61.5 million or 11.3% of       total net sales for the same period last year which excludes $7.3       million in Golden Brand closure costs.  Net income was $39.5 million       or 7.5% of total net sales compared to adjusted net income of $37.3       million or 6.8% of total net sales for the same period last year which       excludes $4.5 million in Golden Brand closure costs (net of tax).   --  Cash and cash equivalent balances plus amounts held in short-term       investments as of the end of the second quarter of 2009 were $163.9       million, an increase of $44.7 million over the same period last year.   --  Total inventories of $430.8 million declined 5.8% from the prior year       second quarter of $457.2 million.    --  Long term debt as of the end of the second quarter of 2009 was $43.2       million, a decrease of $41.1 million from the same period last year.     THIRD QUARTER FISCAL 2009 GUIDANCE   

For the third quarter, the Company expects GAAP diluted earnings per common share to be in a range of $0.27 to $0.30.

The Company anticipates comparable store sales of its retail apparel business to decline in a range of 2% to 3% and comparable store sales of its tuxedo rental revenues to increase in a range of 1% to 2% for the third quarter. Total Company sales are expected to be flat to a decrease of 2% for the third quarter.

Gross profit before occupancy costs for the third quarter is expected to decline in the low single digit range from 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 for the third quarter in absolute dollar terms.

Selling, general and administrative expenses for the third quarter are expected to decline by 4% to 5% from the prior year, excluding advertising costs and $1.8 million in prior year costs associated with the closing of Golden Brand.

This guidance includes an estimated effective tax rate of approximately 33.0% for the third quarter. The Company's effective tax rate for the fiscal year is now estimated at 36.1%.

Weighted average fully diluted common shares outstanding are estimated to be 52.285 million for the third quarter and 52.195 million for the full year.

UPDATED CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 pm Eastern time on Wednesday, September 9, 2009, company management will host a conference call and real time web cast to review the fiscal second quarter and its outlook for the third quarter of fiscal 2009.

To access the conference call, dial 480-629-9772. To access the live webcast presentation, visit the Investor Relations section of the company's website at http://www.menswearhouse.com/.



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