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Men's Wearhouse Reports Fiscal 2012 Fourth Quarter And Full Year Results

- Q4 2012 GAAP diluted loss per share was $0.07, compares to prior year GAAP diluted loss per share of $0.07 and adjusted loss per share of $0.05

- Full year 2012 GAAP diluted EPS was $2.55, compares to prior year GAAP diluted EPS of $2.30 and adjusted diluted EPS of $2.38

- Engages Jefferies & Co. to evaluate strategic alternatives for K&G

- Announces new share repurchase program and planned credit facility amendment

- Provides annual guidance for fiscal year 2013

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HOUSTON, March 13, 2013 /PRNewswire/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the fiscal fourth quarter and the full year ended February 2, 2013.

Total net sales for the 2012 fiscal fourth quarter increased 8.2% to $608.4 million from $562.2 million for the same period a year ago.  Retail segment sales for the quarter increased by 6.8% or $34.8 million and corporate apparel sales increased by 21.5% or $11.5 million.  For the full 2012 fiscal year, net sales increased by 4.4% to $2,488.3 million, with a retail segment increase of 5.1% and a corporate apparel segment decrease of 1.7%. 

The GAAP basis net loss for the 2012 fiscal fourth quarter was $3.4 million, or $0.07 diluted loss per share, compared to a net loss of $3.8 million, or $0.07 diluted loss per share, in the same period in 2011. Last year's fourth quarter adjusted diluted loss per share was $0.05 after excluding $1.3 million ($0.9 million after tax or $0.02 per diluted share) in acquisition related integration costs and $0.3 million ($0.2 million after tax or less than $0.01 per diluted share) for non-cash asset impairment charges. 

For the full 2012 fiscal year, GAAP basis net earnings were $131.7 million, or $2.55 diluted earnings per share, compared to net earnings of $120.6 million, or $2.30 diluted earnings per share, for the 2011 fiscal year.  On an adjusted basis, fiscal year 2011 net earnings were $124.4 million or $2.38 adjusted diluted earnings per share after excluding $3.8 million ($2.5 million after tax or $0.05 per diluted share) in acquisition related integration costs and $2.0 million ($1.3 million after tax or $0.03 per diluted share) for non-cash asset impairment charges.

Doug Ewert, Men's Wearhouse president and chief executive officer, stated, "Our fourth quarter started out with an unprecedented volume decline in November which we described in our third quarter earnings release and conference call.  The balance of the fourth quarter improved over November results; however, macro-economic conditions remained challenging for our customers throughout the period, which resulted in fourth quarter and full year results that were two cents below the low end of our guidance range provided on December 5, 2012.

"Net sales at our core flagship brand Men's Wearhouse stores, which represented 61% of our total fourth quarter sales, were up 9.1% over last year's fourth quarter, and comparable store sales increased 1.0%, at the low end of our guidance range for the quarter. Our higher margin tuxedo rental revenues had an above guidance U.S. comparable store sales increase of 9.4% in the fourth quarter, driven by increased unit rental rates and unit rentals.

"Moores, our retail brand in Canada, was 11% of our total sales mix in the 2012 fourth quarter and delivered a comparable store sales decrease of 5.5%, below our expectations," continued Ewert.  "K&G, with 16% of our total fourth quarter sales, had a comparable store sales decrease of 5.7%, also below our expectations.  Sales at K&G were disappointing as customers did not respond to our promotions and new marketing campaign as well as expected.  Our Corporate Apparel segment, which represented 11% of our total 2012 fourth quarter sales, had a sales increase of 21.5% as managed account customer uniform sales exceeded plan.

"Subsequent to year-end, our board and management have embarked upon a process of reevaluating the Company's operating structure and capital allocation program," added Ewert.  "We believe that our core strength lies primarily in our MW and Moores men's specialty apparel retailing.  To better focus our efforts on these core operations, we have engaged Jefferies & Co. to assist us in evaluating strategic alternatives for our K&G operations. 

"Additionally, the board has approved a new share repurchase program of $200 million, which amends and increases the Company's existing share repurchase authorization. We had $45 million available in our prior repurchase program and this action adds an additional $155 million for share repurchases by the Company.

"We are also in the process of amending and restating our credit facility, which we expect to complete by mid-April," continued Ewert.  "Under the amended facility, we will increase our revolving credit to $300 million, with possible future increases to $450 million under an expansion feature, and extend the maturity date to 2018.  In addition, the amended facility will provide for a $100 million term loan which will be repaid over five years, with 10% payable annually in quarterly installments and the remainder due at maturity.  The other terms of the credit facility will remain substantially similar to those included in our current facility.  We currently have no debt outstanding under the existing revolver other than letters of credit totaling approximately $22.3 million, which will continue in place under the amended facility.

"We believe these strategic and deliberate actions will better position the Company for growth and will unlock value for our shareholders."

Net Sales Summaries
The following is a summary of net sales for fourth quarter and fiscal 2012.  The dollars shown are U.S. dollars in millions and due to rounded numbers may not sum.  The Moores' comparable store sales change is based on the Canadian dollar.

 

Fourth Quarter Net Sales Summary – Fiscal 2012



Net Sales

Comparable Store Sales Change


Net Sales Change

Current Year

Current Year

Prior Year

Total Retail Segment

6.8%

$34.8

$543.4



       Men's Wearhouse

9.1%

$31.2

$372.7

1.0%

9.3%

       K&G

(0.1%)

($0.1)

$95.5

(5.7%)

(2.1%)

       Moores

4.0%

$2.6

$67.8

(5.5%)

(0.2%)

       MW Cleaners

16.3%

$1.0

$7.3









Corporate Apparel Segment

21.5%

$11.5

$65.0









Total Company

8.2%

$46.3

$608.4



 

 

Year-To-Date Net Sales Summary – Fiscal 2012



Net Sales

Comparable Store Sales Change


Net Sales Change

Current Year

Current Year

Prior Year







Total Retail Segment

5.1%

$109.7

$2,248.8



       Men's Wearhouse

7.4%

$109.4

$1,581.1

4.8%

9.1%

       K&G

(2.4%)

($9.2)

$365.9

(4.3%)

3.6%

       Moores

2.3%

$6.3

$274.0

1.5%

4.5%

       MW Cleaners

12.6%

$3.1

$27.8









Corporate Apparel Segment

(1.7%)

($4.1)

$239.4









Total Company

4.4%

$105.6

$2,488.3



 

2013 GUIDANCE
The Company will implement a modification to its forward guidance practice beginning with fiscal 2013 by giving annual guidance only.  The Company will provide specific financial related guidance and guidance around certain elements which management believes will influence the annual results for the full fiscal year. 

Commenting on the Company's annual guidance, Ewert added, "We continue to closely monitor our customers' reactions to continued macro-economic uncertainties that dominate the headlines and, inevitably, their wallets and spending patterns.  Our annual guidance contemplates this but does not take into consideration any share repurchases under the new share repurchase program or any other actions that may result from our engagement of strategic advisors noted in my comments." 

The Company can offer no assurance that it will enter into any transaction in the future, and no decision has been made to enter into a transaction at this time. The Company does not intend to disclose further developments about the review of strategic alternatives unless and until such time as its Board of Directors has approved a specific course of action, or it otherwise deems further disclosure is appropriate or required.

GAAP Diluted EPS
For the fiscal year, the Company expects GAAP diluted earnings per share in a range of $2.70 to $2.80, an increase of 5.9% to 9.8% over the prior year diluted earnings per share of $2.55 and an increase of 7.1% to 11.1% over the prior year diluted earnings per share adjusted for the 53rd week of $2.52.

Sales
Total sales are expected to increase 2.85% to 3.85%.  Comparable store sales are expected as follows (all comparable store sales growth is based on a 52-week comparable time period):


% of Total Sales (approximate)

Comparable Store Sales Growth

     Men's Wearhouse

65%

+4% to +5%

- MW Tuxedo Rental Revenues


+5% to +6%

     K&G

13%

-3% to -4%

     Moores

11%

+1% to +2%

Corporate apparel sales are expected to increase 1.9% to 2.4% and are expected to be approximately 9.5% of total sales.  

Gross Margin
Total gross margin by segment is expected as follows:


% Change

Basis Point Change to FY12

     Retail Margin

+2.9% to +4.2%

flat to +10

     Corporate Apparel Margin

+8.4% to 9.1%

+185 to +190


SG&A
Compared to FY12 on a 52 week basis, our FY13 total SG&A expense is expected to increase 3.4% to 3.9% while decreasing 30 to 48 basis points as a percentage of sales.  The increase in FY13 as compared to FY12 on a 53 week basis is expected to be 1.8% to 2.3% with a decrease of 37 to 55 basis points as a percentage of sales.    

Other

Effective Tax Rate


36%

Weighted Average Shares (millions)


51,505

Average Foreign Exchange Conversion Rates



-  US Dollar to the Pound


1.596

-  US Dollar to the Canadian Dollar


1.000

Dilutive Effect of Participating Securities


$0.01

Capital Expenditures


$100M - $108M

 

Store Activity


Store Openings

Store Closings

Men's Wearhouse

32 - 36

-

Men's Wearhouse and Tux

-

36

K&G

1

4

Moores

3

-

 

CONFERENCE CALL AND WEBCAST INFORMATION
At 9:00 a.m. Eastern time on Thursday, March 14, 2013, Company management will host a conference call and real time webcast to review fiscal fourth quarter and full year 2012 results and its outlook for fiscal 2013.

To access the conference call, dial 480-629-9692.  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 21, 2013 by calling 303-590-3030 and entering the access code of 4604189#, or a webcast archive will be available free on the website for approximately 90 days.

STORE INFORMATION


February 2, 2013

 January 28, 2012







Number of Stores

Sq. Ft.

(000's)

Number of Stores

Sq. Ft.

(000's)






Men's Wearhouse

638

3,650.0

607

3,462.7






Men's Wearhouse and Tux

288

395.1

343

474.6






Moores, Clothing for Men

120

763.5

117

741.7






K&G (a)

97

2,299.3

99

2,351.2






Total

1,143

7,107.9

1,166

7,030.2







(a)  92 and 91 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 1,143 stores.  The Men's Wearhouse, Moores and K&G stores carry a full selection of men's designer, brand name and private label suits, sport coats, furnishings and accessories and Men's Wearhouse and Tux stores carry a limited selection.  Most K&G stores carry a full selection of women's apparel.  Tuxedo rentals are available in the Men's Wearhouse, Moores and Men's Wearhouse and Tux stores.  Additionally, Men's Wearhouse operates a global corporate apparel and workwear group consisting of Twin Hill in the United States and Dimensions, Alexandra and Yaffy in the UK. 

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, changes in foreign currency rates and other factors described in the Company's annual report on Form 10-K for the fiscal year ended January 28, 2012 and subsequent Forms 10-Q.  For additional information on Men's Wearhouse, please visit the Company's websites at www.menswearhouse.com, www.kgstores.com, www.mooresclothing.com, www.twinhill.com, www.dimensions.co.uk and www.alexandra.co.uk

Contact:

Ken Dennard
Dennard - Lascar Associates
(713) 529-6600


          




THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 






FOR THE THREE MONTHS ENDED


February 2, 2013, AND January 28, 2012


(In thousands, except per share data)













Three Months Ended


Variance




% of


% of




Basis



2012

Sales

2011

Sales


Dollar

%

Points












Net sales:










          Retail clothing product

$456,063

74.96%

$430,314

76.55%


$25,749

5.98%

(1.59)


          Tuxedo rental services

49,193

8.09%

43,444

7.73%


5,749

13.23%

0.36


          Alteration and other services   

38,172

6.27%

34,898

6.21%


3,274

9.38%

0.07


               Total retail sales

543,428

89.32%

508,656

90.48%


34,772

6.84%

(1.16)


               Corporate apparel clothing product sales

65,000

10.68%

53,513

9.52%


11,487

21.47%

1.16


                    Total net sales

608,428

100.00%

562,169

100.00%


46,259

8.23%

0.00












                   Total cost of sales

365,283

60.04%

337,289

60.00%


27,994

8.30%

0.04












Gross margin (a):










        Retail clothing product

249,160

54.63%

234,594

54.52%


14,566

6.21%

0.12


        Tuxedo rental services

41,371

84.10%

36,553

84.14%


4,818

13.18%

(0.04)


        Alteration and other services

8,032

21.04%

7,414

21.24%


618

8.34%

(0.20)


        Occupancy costs

(74,119)

(13.64%)

(68,294)

(13.43%)


(5,825)

(8.53%)

(0.21)


               Total retail gross margin

224,444

41.30%

210,267

41.34%


14,177

6.74%

(0.04)


               Corporate apparel clothing product margin

18,701

28.77%

14,613

27.31%


4,088

27.98%

1.46


                   Total gross margin

243,145

39.96%

224,880

40.00%


18,265

8.12%

(0.04)












Selling, general and administrative expenses

249,623

41.03%

232,125

41.29%


17,498

7.54%

(0.26)












Operating loss

(6,478)

(1.06%)

(7,245)

(1.29%)


767

10.59%

0.22












Net interest

(90)

(0.01%)

(241)

(0.04%)


151

62.66%

0.03












Loss before income taxes

(6,568)

(1.08%)

(7,486)

(1.33%)


918

12.26%

0.25












Benefit for income taxes

(3,412)

(0.56%)

(3,588)

(0.64%)


176

4.91%

0.08












Net loss including noncontrolling interest

(3,156)

(0.52%)

(3,898)

(0.69%)


742

19.04%

0.17












Net (earnings) loss attributable to noncontrolling interest

(248)

(0.04%)

119

0.02%


(367)

308.40%

0.06












Net loss attributable to common shareholders

$ (3,404)

(0.56%)

$(3,779)

(0.67%)


$    375

9.92%

0.11












Net loss per diluted common share attributable to common shareholders

$  (0.07)


$  (0.07)

















Weighted average diluted common shares outstanding:

50,829


51,297



























(a)  Gross margin percent of sales is calculated as a percentage of related sales.

 

 

 


THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 


 

FOR THE TWELVE MONTHS ENDED

February 2, 2013, AND January 28, 2012

(In thousands, except per share data)











Twelve Months Ended


Variance



% of


% of




Basis


2012

Sales

2011

Sales


Dollar

%

Points










Net sales:









          Retail clothing product

$1,691,248

67.97%

$1,619,671

67.98%


$71,577

4.42%

(0.01)

          Tuxedo rental services

406,454

16.33%

376,857

15.82%


29,597

7.85%

0.52

          Alteration and other services   

151,147

6.07%

142,665

5.99%


8,482

5.95%

0.09

             Total retail sales

2,248,849

90.38%

2,139,193

89.78%


109,656

5.13%

0.60

               Corporate apparel clothing product sales

239,429

9.62%

243,491

10.22%


(4,062)

(1.67%)

(0.60)

                    Total net sales

2,488,278

100.00%

2,382,684

100.00%


105,594

4.43%

0.00










                    Total cost of sales

1,380,130

55.47%

1,333,757

55.98%


46,373

3.48%

(0.51)










Gross margin (a):









        Retail clothing product

935,200

55.30%

896,013

55.32%


39,187

4.37%

(0.02)

        Tuxedo rental services

349,887

86.08%

324,236

86.04%


25,651

7.91%

0.05

        Alteration and other services

37,301

24.68%

34,829

24.41%


2,472

7.10%

0.27

        Occupancy costs

(283,382)

(12.60%)

(273,300)

(12.78%)


(10,082)

3.69%

0.17

               Total retail gross margin

1,039,006

46.20%

981,778

45.89%


57,228

5.83%

0.31

               Corporate apparel clothing product margin

69,142

28.88%

67,149

27.58%


1,993

2.97%

1.30

                   Total gross margin

1,108,148

44.53%

1,048,927

44.02%


59,221

5.65%

0.51










Selling, general and administrative expenses

909,580

36.55%

863,495

36.24%


46,085

5.34%

0.31










Operating income

198,568

7.98%

185,432

7.78%


13,136

7.08%

0.20










Net interest

(896)

-0.04%

(1,022)

-0.04%


126

(12.33%)

0.01










Earnings before income taxes

197,672

7.94%

184,410

7.74%


13,262

7.19%

0.20










Provision for income taxes

65,609

2.64%

63,944

2.68%


1,665

2.60%

(0.05)










Net earnings including noncontrolling interest

132,063

5.31%

120,466

5.06%


11,597

9.63%

0.25










Net (earnings) loss attributable to noncontrolling interest

(347)

(0.01%)

135

0.01%


(482)

357.04%

0.02










Net earnings attributable to common shareholders

$   131,716

5.29%

$  120,601

5.06%


$11,115

9.22%

0.23



















Net earnings per diluted common share attributable to common shareholders

$         2.55


$        2.30















Weighted average diluted common shares outstanding:

51,026


51,692















(a)  Gross margin percent of sales is calculated as a percentage of related sales.

 

 

 


 

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 













February 2,


January 28,



2013


2012






ASSETS









Current assets:





Cash and cash equivalents

$               156,063


$              125,306


Accounts receivable, net

63,010


56,669


Inventories

556,531


572,502


Other current assets

79,549


70,906







   Total current assets

855,153


825,383

Property and equipment, net

389,118


355,717

Tuxedo rental product, net

126,825


99,814

Goodwill

87,835


87,782

Intangible assets, net

32,442


33,711

Other assets

4,974


3,545







   Total assets

$            1,496,347


$           1,405,952






LIABILITIES AND EQUITY









Current liabilities:





Accounts payable

$               123,983


$              123,445


Accrued expenses and other current liabilities

164,344


154,395


Income taxes payable

5,856


3,435







   Total current liabilities

294,183


281,275






Deferred taxes and other liabilities

92,929


92,858







   Total liabilities

387,112


374,133






Equity:





Preferred stock

-


-


Common stock

725


718


Capital in excess of par

386,254


362,735


Retained earnings

1,190,246


1,095,535


Accumulated other comprehensive income

36,924


36,921


Treasury stock, at cost

(517,894)


(476,749)







   Total equity attributable to common shareholders

1,096,255


1,019,160







Noncontrolling interest

12,980


12,659







   Total equity

1,109,235


1,031,819







    Total liabilities and equity

$            1,496,347


$           1,405,952

 

 

 

 

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 



FOR THE TWELVE MONTHS ENDED

February 2, 2013, AND January 28, 2012

(In thousands)








Twelve Months Ended



2012


2011






CASH FLOWS FROM OPERATING ACTIVITIES:










Net earnings including noncontrolling interest

$         132,063


$         120,466


Non-cash adjustments to net earnings:





   Depreciation and amortization

84,979


75,968


   Tuxedo rental product amortization

28,315


28,858


   Other

22,168


47,227


Changes in operating assets and liabilities

(41,795)


(109,722)







        Net cash provided by operating activities

225,730


162,797






CASH FLOWS FROM INVESTING ACTIVITIES:





Capital expenditures

(121,433)


(91,820)


Proceeds from sales of property and equipment

33


59


Investment in trademark, tradenames and other assets

(2,075)


-







        Net cash used in investing activities

(123,475)


(91,761)






CASH FLOWS FROM FINANCING ACTIVITIES:





Proceeds from issuance of common stock

8,457


8,354


Cash dividends paid

(37,084)


(25,098)


Tax payments related to vested deferred stock units

(4,421)


(2,955)


Excess tax benefits from share-based plans

2,997


1,903


Repurchases of common stock

(41,296)


(63,988)







        Net cash used in financing activities

(71,347)


(81,784)







Effect of exchange rate changes

(151)


(317)






INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

30,757


(11,065)







Balance at beginning of period

125,306


136,371


Balance at end of period

$         156,063


$         125,306

 

 

SOURCE Men's Wearhouse



RELATED LINKS
http://www.menswearhouse.com

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