Men's Wearhouse Reports Fiscal 2010 First Quarter Results

HOUSTON, June 9 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended May 1, 2010.

Diluted earnings per share were $0.26 for the first quarter ended May 1, 2010.  This compares to diluted earnings per share guidance given March 10, 2010 of $0.12 to $0.16.  Prior year first quarter GAAP diluted earnings per share were $0.10.

FIRST Quarter REVIEW

• Total Company sales increased 2.0% for the quarter.  
  • Clothing product sales, representing 77.8% of fiscal first quarter 2010 total net sales, increased 2.6% due mainly to a favorable change in the U.S./Canadian dollar exchange rate and an increase in Men's Wearhouse comparable store sales resulting from increased store traffic levels.
  • Tuxedo rental sales, representing 15.2% of fiscal first quarter 2010 total net sales, increased 1.0%.        

• Gross margin before occupancy costs, as a percentage of total net sales, increased 105 basis points from 56.1% to 57.2%.  Clothing product margins, as a percentage of related sales, increased 122 basis points due primarily to different promotional offerings, as well as the mix of products on promotion, in 2010 compared to 2009 and lower product costs.  Tuxedo rental margins, as a percentage of related sales, increased 115 basis points due primarily to lower product costs.
• Occupancy costs decreased, as a percentage of total net sales, by 92 basis points from 15.6% to 14.7%.  On an absolute dollar basis, occupancy costs decreased 4.0% from $72.6 million in the prior year to $69.7 million due primarily to lower depreciation costs.  
• Selling, general, and administrative expenses were $179.7 million in the current year and increased 0.2% from the prior year's SG&A of $179.2.  As a percentage of total net sales, SG&A decreased 67 basis points from 38.6% to 37.9%.
• Operating income was $21.4 million or 4.5% of total net sales compared to operating income of $8.8 million or 1.9% of total net sales for the same period last year.
• Cash and cash equivalent balances as of the end of the first quarter of 2010 were $219.6 million.
• Total inventories of $435.4 million declined 2.8% from the prior year first quarter of $448.0 million.
• Current maturities of long-term debt were $45.8 million as of the end of the first quarter of 2010.

SECOND QUARTER 2010 GUIDANCE

• For the second quarter of the fiscal year, the Company expects GAAP diluted earnings per share in a range of $0.75 to $0.78.  
• The Company anticipates comparable store sales at its MW stores to increase in the low single digit range, at K&G a decrease in the low to mid single digit range and at Moores a flat to low single digit increase.  Included in this outlook is a low double digit increase in comparable store tuxedo rental revenues.  
• Total gross profit for the second quarter is expected to increase in the high single digit range from the prior year.  Occupancy costs are expected to decrease in a low single digit range in absolute dollar terms.  Selling, general and administrative expenses are expected to increase in the high single digit range from the prior year excluding the $3.2 million gift card breakage income recognized in the prior year second quarter.  SG&A expenses excluding marketing expenses are expected to increase in the mid single digit range over the adjusted prior year quarter.  
• This guidance includes an estimated effective tax rate of 37.5% for the second quarter and an estimated effective tax rate of 36.0% for the full year.
• Fully diluted shares outstanding of 52.765 million are estimated for the second quarter.

UPDATED CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 p.m. Eastern time on Wednesday, June 9, 2010, Company management will host a conference call and real time web cast to review the fiscal first quarter and its outlook for the second quarter of fiscal 2010.    

To access the conference call, dial 480-629-9770. 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 June 16, 2010 by calling 303-590-3030 and entering the access code of 4307183#, or a webcast archive will be available free on the website for approximately 90 days.

Founded in 1973, Men's Wearhouse is one of North America's largest specialty retailers of men's apparel with 1,252 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.  The Company operates websites at www.menswearhouse.com, www.mooresclothingformen.com and www.kgstores.com.

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 fiscal year ended January 30, 2010.

For additional information on Men's Wearhouse, please visit the Company's website at www.menswearhouse.com.

SOURCE Men's Wearhouse