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Men's Wearhouse Reports Fiscal 2013 First Quarter Results



          Men's Wearhouse Reports Fiscal 2013 First Quarter Results

- Q1 2013 diluted earnings per share was $0.65, compares to prior year diluted
earnings per share of $0.52

- Company reaffirms EPS guidance for fiscal full year 2013

PR Newswire

FREMONT, Calif., June 12, 2013

FREMONT, Calif., June 12, 2013 /PRNewswire/ -- The Men's Wearhouse (NYSE: MW)
today announced its consolidated financial results for the fiscal first
quarter ended May 4, 2013.

FIRST QUARTER RESULTS

Net earnings for the fiscal 2013 first quarter were $33.1 million, or $0.65
diluted earnings per share, compared to net earnings of $26.9 million, or
$0.52 diluted earnings per share last year.  The Company estimates that
approximately $0.10 of the increase is attributable to a tuxedo prom season
shift from the second quarter.  This shift is primarily caused by an earlier
Easter. 

Total net sales for the fiscal 2013 first quarter increased 5.1% to $616.5
million from $586.6 million for the same prior year period.  Retail segment
sales for the quarter increased by 4.4% or $23.5 million and corporate apparel
sales increased by 13.0% or $6.5 million as compared to the prior year
quarter.

The consolidated total gross margin was up $23.9 million or 9.4% with the
total gross margin rate increasing 177 basis points primarily because of the
favorable penetration of tuxedo revenues.  The retail segment total gross
margin was up 8.2% and the corporate apparel gross margin increased 31.6%. 

SG&A expenses increased by $12.3 million or 5.8% and increased 22 basis points
primarily due to higher store and non-store payroll related costs, including
increased medical benefit costs, and higher advertising expense.

The table below is a summary of net sales for fiscal 2013 first quarter.  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.  Comparable sales exclude the net sales of a store for any month of
one period if the store was not open throughout the same month of the prior
period and include e-commerce net sales, beginning in fiscal 2013. 

Because fiscal 2012 was a 53 week year, comparable store sales for the current
year are shown on a trailing 52 week basis, comparing the most relevant time
periods, as well as on a fiscal period basis.  The fiscal period basis is
higher than the trailing basis comparison primarily due to the favorable
calendar shift for prom tuxedo rental revenues into the fiscal first quarter. 
There will be an offsetting unfavorable calendar shift primarily in the second
quarter resulting in a mostly neutral full year impact.

            First Quarter Net Sales Summary – Fiscal 2013
                                       Net Sales Comparable Store Sales Change
                                                 Current   Current  Prior Year
                      Net Sales Change Current   Quarter   Quarter  Quarter
                                       Quarter             Fiscal   Fiscal
                                                 Trailing
Total Retail Segment  4.4%     $23.5   $560.2
       Men's          8.2%     $30.4   $401.8    1.6%      7.1%     3.8%
Wearhouse
       Moores         (3.1%)   ($1.7)  $53.8     (7.0%)    (2.8%)   7.1%
       K&G            (5.6%)   ($5.8)  $97.3     (6.7%)    (5.3%)   (4.0%)
       MW Cleaners    8.7%     $0.6    $7.2
Corporate Apparel     13.0%    $6.5    $56.4
Segment
Total Company         5.1%     $30.0   $616.5

Doug Ewert, Men's Wearhouse president and chief executive officer, stated,
"Net sales at our core flagship brand Men's Wearhouse stores, which
represented 65% of our total first quarter sales, got off to a slow start in
February and were comping negatively until about President's weekend.  After
that we began to pick up in both clothing sales and tuxedo revenues."  Men's
Wearhouse sales were up 8.2% over last year's first quarter sales, and
comparable store sales increased 1.6%.  The higher margin tuxedo rental
revenues comparable store sales increased 6.5% in the first quarter of 2013
driven mainly by the Easter holiday shift allowing for an earlier prom season
that increased rental rates, unit rentals, and sales of tuxedo accessories. 
Additionally, an increase in clothing product average unit retails more than
offset decreases in units sold per transaction and average transactions per
store.

Moores, the Canadian retail brand, was 9% of the total first quarter sales and
had a comparable store sales decrease of 7.0% due mainly to decreased average
transactions per store and units sold per transaction.  K&G was 16% of the
Company's total first quarter sales with a comparable store sales decrease of
6.7%, with lower average transactions per store and units sold per transaction
offsetting an increase in average unit retails.  Ewert noted, "The decrease in
the K&G comps were in-line with internal expectations for the quarter. 
However, the Moores sales were below internal expectations as we are facing
headwinds in Canada."  The Corporate Apparel segment, which represented 9% of
total first quarter sales, had a sales increase of 13.0% due mainly to a
higher level of customer-directed new uniform rollouts.

During the first quarter of fiscal 2013, the Company repurchased approximately
1.0 million shares for $33.0 million under our new $200.0 million share
repurchase program announced in March 2013.  Additionally, on April 12, 2013,
the Company amended and restated its credit facility as previously reported.

2013 GUIDANCE

The Company continues to expect diluted earnings per share in a range of $2.70
to $2.80.  However, the Company now expects Men's Wearhouse tuxedo rental
revenue comparable store sales growth to come in slightly lower to a range of
+4% to +5%.  Ewert stated, "The future reservations are running slightly below
our initial expectations."  The Moores comparable store sales are now expected
to be -2% to -3% on an annual basis as a result of a continued decrease in
average transactions per store.  These decreases are being primarily offset by
a favorable retail margin rate and lower SG&A expenses.

CONFERENCE CALL AND WEBCAST INFORMATION

At 9:00 a.m. Eastern time on Thursday, June 13, 2013, Company management will
host a conference call and real time webcast to review fiscal 2013 first
quarter 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 June 20,
2013 by calling 303-590-3030 and entering the access code of 4619806#, or a
webcast archive will be available free on the website for approximately 90
days.

STORE INFORMATION

                         May 4, 2013       April 28, 2012     February 2, 2013
                         Number of Sq. Ft. Number of Sq. Ft. Number of Sq. Ft.
                         Stores            Stores            Stores
                                   (000's)           (000's)           (000's)
Men's Wearhouse          644       3,680.5 611       3,482.3 638       3,650.0
Men's Wearhouse and Tux  281       384.6   336       463.3   288       395.1
Moores, Clothing for Men 120       764.4   117       741.9   120       763.5
K&G ^(a)                 96        2,282.0 98        2,329.2 97        2,299.3
Total                    1,141     7,111.5 1,162     7,016.7 1,143     7,107.9

^(a)  92, 91 and 92 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 1,141 stores.  The Men's Wearhouse, Moores and
K&G stores carry a full selection of suits, sport coats, furnishings and
accessories in exclusive and non-exclusive merchandise brands 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
United Kingdom. 

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 February 2, 2013.  For additional information on Men's
Wearhouse, please visit the Company's websites at www.menswearhouse.com,
www.mooresclothing.com, www.kgstores.com, www.twinhill.com,
www.dimensions.co.uk and www.alexandra.co.uk. 

Contact:
Jon Kimmins, CFO
(510) 723-8639

Ken Dennard
Dennard ▪ Lascar Associates
(832) 594-4004
ken@dennardlascar.com

       

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
FOR THE THREE MONTHS ENDED
May 4, 2013 AND April 28, 2012
(In thousands, except per share data)
                    Three Months Ended                   Variance
                             % of              % of                       Basis
                    2013     Sales    2012     Sales     Dollar  %        Points
Net sales:
          Retail    $        68.73%   $        71.68%    $       0.78%    (2.95)
clothing product     423,737           420,469            3,268
          Tuxedo    98,482   15.97%   78,489   13.38%    19,993  25.47%   2.59
rental services
         
Alteration and      37,962   6.16%    37,734   6.43%     228     0.60%    (0.28)
other services   
                    560,181  90.86%   536,692  91.50%    23,489  4.38%    (0.64)
Total retail sales
              
Corporate apparel   56,355   9.14%    49,882   8.50%     6,473   12.98%   0.64
clothing product
sales
                    616,536  100.00%  586,574  100.00%   29,962  5.11%    0.00
Total net sales
                    338,616  54.92%   332,525  56.69%    6,091   1.83%    (1.77)
Total cost of sales
Gross margin (a):
        Retail      238,254  56.23%   231,863  55.14%    6,391   2.76%    1.08
clothing product
        Tuxedo      83,984   85.28%   67,476   85.97%    16,508  24.46%   (0.69)
rental services
        Alteration  9,544    25.14%   10,176   26.97%    (632)   (6.21%)  (1.83)
and other services
        Occupancy   (71,274) (12.72%) (68,698) (12.80%)  (2,576) (3.75%)  0.08
costs
              
Total retail gross  260,508  46.50%   240,817  44.87%    19,691  8.18%    1.63
margin
              
Corporate apparel   17,412   30.90%   13,232   26.53%    4,180   31.59%   4.37
clothing product
margin
                    277,920  45.08%   254,049  43.31%    23,871  9.40%    1.77
Total gross margin
Selling, general
and administrative  225,367  36.55%   213,102  36.33%    12,265  5.76%    0.22
expenses
Operating income    52,553   8.52%    40,947   6.98%     11,606  28.34%   1.54
Net interest        (223)    (0.04%)  (305)    (0.05%)   82      (26.89%) 0.02
Earnings before     52,330   8.49%    40,642   6.93%     11,688  28.76%   1.56
income taxes
Provision for       19,374   3.14%    14,062   2.40%     5,312   37.78%   0.75
income taxes
Net earnings
including           32,956   5.35%    26,580   4.53%     6,376   23.99%   0.81
non-controlling
interest
Net loss
attributable to     135      0.02%    304      0.05%     (169)   55.59%   0.03
non-controlling
interest
Net earnings        $                 $                  $
attributable to      33,091  5.37%     26,884  4.58%      6,207  23.09%   0.78
common shareholders
Net earnings per
diluted common      $                 $    
share attributable   0.65              0.52
to common
shareholders
Weighted-average
diluted common      50,788            51,237
shares outstanding:
(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)
                                      May 4,               April 28,
                                      2013                 2012
ASSETS
Current assets:
  Cash and cash equivalents           $           155,099  $           118,716
  Accounts receivable, net            64,468               69,249
  Inventories                         598,916              606,522
  Other current assets                66,544               66,392
     Total current assets             885,027              860,879
Property and equipment, net           390,077              367,628
Tuxedo rental product, net            144,089              112,368
Goodwill                              87,313               89,230
Intangible assets, net                31,357               33,961
Other assets                          6,318                4,745
     Total assets                     $         1,544,181  $         1,468,811
LIABILITIES AND EQUITY
Current liabilities:
  Accounts payable                    $           161,533  $           159,058
  Accrued expenses and other current  185,133              179,172
  liabilities
  Income taxes payable                6,366                967
     Total current liabilities        353,032              339,197
Deferred taxes and other liabilities  92,099               100,935
     Total liabilities                445,131              440,132
Equity:
  Preferred stock                     -                    -
  Common stock                        728                  721
  Capital in excess of par            388,497              368,025
  Retained earnings                   1,214,087            1,113,130
  Accumulated other comprehensive     33,824               44,647
  income
  Treasury stock, at cost             (550,815)            (510,615)
     Total equity attributable to     1,086,321            1,015,908
  common shareholders
  Non-controlling interest            12,729               12,771
     Total equity                     1,099,050            1,028,679
     Total liabilities and equity     $         1,544,181  $         1,468,811

 

 

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
FOR THE THREE MONTHS ENDED
May 4, 2013 AND April 28, 2012
(In thousands)
                                        Three Months Ended
                                        2013                2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net earnings including non-controlling $           32,956  $           26,580
 interest
 Non-cash adjustments to net earnings:
    Depreciation and amortization       21,355              20,681
    Tuxedo rental product amortization  7,328               5,988
    Other                               10,339              11,944
 Changes in operating assets and        (1,312)             127
 liabilities
         Net cash provided by operating 70,666              65,320
 activities
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures                   (25,127)            (30,664)
 Proceeds from sales of property and    38                  8
 equipment
         Net cash used in investing     (25,089)            (30,656)
 activities
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock 1,359               3,233
 Cash dividends paid                    (9,263)             (9,357)
 Deferred financing costs               (1,771)             -
 Tax payments related to vested         (3,310)             (4,017)
 deferred stock units
 Excess tax benefits from share-based   199                 1,960
 plans
 Repurchases of common stock            (33,009)            (33,866)
         Net cash used in financing     (45,795)            (42,047)
 activities
 Effect of exchange rate changes        (746)               793
DECREASE IN CASH AND CASH EQUIVALENTS   (964)               (6,590)
 Balance at beginning of period         156,063             125,306
 Balance at end of period               $         155,099   $         118,716

 

SOURCE The Men's Wearhouse

Website: http://www.menswearhouse.com
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