Men's Wearhouse Reports Fiscal 2013 Second Quarter Results

          Men's Wearhouse Reports Fiscal 2013 Second Quarter Results

- Q2 2013 GAAP diluted earnings per share was $0.85 and adjusted diluted
earnings per share was $1.01, compared to prior year diluted earnings per
share of $1.15

- Company lowers EPS guidance for fiscal full year 2013

PR Newswire

FREMONT, Calif., Sept. 11, 2013

FREMONT, Calif., Sept. 11, 2013 /PRNewswire/ --The Men's Wearhouse (NYSE: MW)
today announced its consolidated financial results for the fiscal second
quarter ended August 3, 2013. As discussed further below, the 2013 second
quarter GAAP diluted EPS of $0.85 was less than the prior year mainly because
of one-time charges that reduced EPS by $0.16 and an estimated $0.10 EPS
reduction caused by an Easter related shift in quarterly tuxedo rental
revenues. 

Doug Ewert, Men's Wearhouse president and chief executive officer, commented,
"Retail clothing sales during the second quarter were below our internal plan
as we experienced a decline in customer traffic compared to last year's second
quarter. We believe this is primarily due to macro issues affecting the
apparel retailing space.

"Despite the difficult economic climate, we remain committed to our operating
and capital allocation plans that were laid out earlier this year. Over the
past six months we have improved financial flexibility, purchased the American
designer brand Joseph Abboud® and its U.S. manufacturing operations, and
repurchased approximately $152 million of our shares; and we continue to
evaluate strategic alternatives for our K&G operations. 

"Along with our store growth and margin expansion initiatives, we believe
these strategic and deliberate actions better position the Company for growth
and will continue to unlock value for our shareholders into 2014 and beyond,"
said Ewert.

SECOND QUARTER STRATEGIC REVIEW

In July 2013, the Company signed a definitive agreement to acquire JA Holding,
Inc., the parent company of the American clothing brand, Joseph Abboud®, for
approximately $97.5 million in cash consideration, subject to certain
adjustments. The transaction closed on August 6, 2013 and was funded with the
$100.0 million term loan available under our credit facility.

Also in July 2013, the Company entered into an accelerated share repurchase
agreement ("ASR") with JPMorgan Chase Bank, NA, to repurchase $100.0 million
of the Company's common shares and received an initial delivery of 2,197,518
common shares, which is approximately 85% of the number of shares expected to
be repurchased in connection with this transaction. The ASR is expected to be
completed no later than the fourth quarter of 2013. All shares repurchased
under the ASR will be retired. The remaining balance available under the
Board's $200.0 million March 2013 authorization is $48.0 million.

SECOND QUARTER CONSOLIDATED RESULTS REVIEW

Total net sales for the fiscal 2013 second quarter decreased 2.3% or $15.0
million to $647.3 million from $662.3 million for the same prior year period.
Retail segment sales for the quarter decreased by 1.9% or $11.2 million and
corporate apparel sales decreased by 6.6% or $3.8 million as compared to the
prior year quarter.

The consolidated total gross margin was down $11.5 million or 3.6% with the
total gross margin rate decreasing 65 basis points primarily because of the
shift in tuxedo revenues and the deleveraging of occupancy costs. The retail
segment total gross margin was down 3.4% and the corporate apparel gross
margin decreased 6.1%.

Adjusted SG&A expenses increased by $0.9 million or 0.4% primarily due to
payroll related costs, particularly increased medical benefit costs. Adjusted
SG&A expenses exclude $2.9 million in costs related primarily to the JA
Holding, Inc. acquisition and separation costs associated with a former
executive. Also excluded is a $9.5 million non-cash goodwill impairment
charge related to K&G. These charges of $12.4 million ($8.0 million after
tax) reduced second quarter diluted EPS by $0.16.

GAAP net earnings for the fiscal 2013 second quarter were $42.9 million, or
$0.85 diluted earnings per share. Adjusted net earnings[1] for the fiscal
2013 second quarter were $51.0 million, or $1.01 adjusted diluted earnings per
share compared to net earnings of $59.4 million, or $1.15 diluted earnings per
share last year. The Company estimates that approximately $0.10 of the
comparable decrease is attributable to a shift of tuxedo prom season rentals
to the first quarter caused by an earlier Easter.

SECOND QUARTER SALES REVIEW

The table that follows is a summary of net sales for fiscal 2013 second
quarter and year-to-date. 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 current quarter fiscal
period basis is lower than the trailing basis comparison primarily due to the
calendar shift of prom tuxedo rental revenues into the fiscal first quarter.
There was an offsetting favorable calendar shift primarily in the first
quarter resulting in a mostly neutral full year impact.

Second Quarter Net Sales Summary – Fiscal 2013
                                 Net Sales       Comparable Store Sales Change
                                                 Current    Current   Prior
                                                 Quarter    Quarter   Year
                Net Sales Change Current Quarter
                                                 Trailing   Fiscal   Quarter
                                                                      Fiscal
Total Retail    (1.9%)  ($11.2)  $593.4
Segment
 Men's    (0.7%)  ($2.9)   $426.6          0.7%       (2.1%)    4.4%
Wearhouse
 Moores   (4.9%)  ($3.8)   $74.5           (4.9%)     (5.5%)    2.5%
 K&G      (5.7%)  ($5.1)   $84.9           (3.0%)     (5.1%)    (3.3%)
 MW       9.1%    $0.6     $7.4
Cleaners
Corporate       (6.6%)  ($3.8)   $53.8
Apparel Segment
Total Company   (2.3%)  ($15.0)  $647.3



Year-To-Date Net Sales Summary – Fiscal 2013
                                     Net Sales   Comparable Store Sales Change
                                                              Current  Prior
                                                 Current YTD           Year
                    Net Sales Change Current YTD              YTD
                                                 Trailing     Fiscal   YTD
                                                                       Fiscal
Total Retail        1.1%    $12.2    $1,153.6
Segment
 Men's        3.4%    $27.5    $828.4      1.2%         2.1%     4.1%
Wearhouse
 Moores       (4.1%)  ($5.5)   $128.3      (5.8%)       (4.4%)   4.4%
 K&G          (5.6%)  ($10.9)  $182.2      (5.0%)       (5.2%)   (3.7%)
 MW Cleaners  8.9%    $1.2     $14.7
Corporate Apparel   2.5%    $2.7     $110.2
Segment
Total Company       1.2%    $14.9    $1,263.8

Net sales at core flagship brand Men's Wearhouse stores, which represented 66%
of total second quarter sales were down 0.7% from last year's second quarter
sales while comparable store sales increased 0.7%, below internal
expectations. On a comparable basis an increase in clothing product average
unit retails more than offset decreases in average transactions per store and
units sold per transaction. The higher margin tuxedo rental revenues
comparable store sales increased 0.4% in the second quarter of 2013.

Moores, the Canadian retail brand, was 12% of the total second quarter sales
and had a comparable store sales decrease of 4.9% due mainly to decreased
average transactions per store and units sold per transaction that more than
offset increased average unit retails. K&G was 13% of the Company's total
second quarter sales with a comparable store sales decrease of 3.0% with lower
average transactions per store and average unit retails that more than offset
increased units sold per transaction. These results for Moores and K&G were
slightly favorable to our internal plans. The Corporate Apparel segment,
which represented 8% of total second quarter sales, had a sales decrease of
6.6% due mainly to an expected lower level of customer-directed new uniform
rollouts in the UK.

2013 GUIDANCE

While the Company continues to feel confident about its merchandising and
operating strategies, it has become increasingly concerned about the current
macro trends in the apparel industry. Therefore, the Company is lowering its
comp store growth assumptions by approximately 2% at Men's Wearhouse and
Moores from the previous guidance, given on June 12, 2013, resulting in a full
year expectation of adjusted earnings per share of $2.40 to $2.50. The
Company's revised guidance excludes deal and integration costs associated with
the JA Holding, Inc. acquisition, separation costs associated with a former
executive and the non-cash goodwill impairment charge related to K&G mentioned
earlier.

"We are being cautious as we face macro-economic headwinds. However, we
believe our operating and capital allocation plans, our margin enhancement
strategies, including new store openings and the expansion of exclusive
brands, and our new omni-channel marketing initiatives introduced in 2013
position us to grow market share as we manage through this," Ewert concluded.

CONFERENCE CALL AND WEBCAST INFORMATION

At 9:00 a.m. Eastern time on Thursday, September 12, 2013, Company management
will host a conference call and real time webcast to review fiscal 2013 second
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
September 19, 2013 by calling 303-590-3030 and entering the access code of
4634827#, or a webcast archive will be available free on the website for
approximately 90 days.

STORE INFORMATION
                         August 3, 2013    July 28, 2012     February 2, 2013
                         Number of Sq. Ft. Number of Sq. Ft. Number of Sq. Ft.

                         Stores    (000's) Stores    (000's) Stores    (000's)
Men's Wearhouse          652       3,722.6 613       3,506.3 638       3,650.0
Men's Wearhouse and Tux  269       370.1   325       449.0   288       395.1
Moores, Clothing for Men 120       764.4   117       741.8   120       763.5
K&G ^(a)                 96        2,271.7 98        2,326.6 97        2,299.3
Total                    1,137     7,128.8 1,153     7,023.7 1,143     7,107.9

^(a) 88, 92 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 1,137 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 and Forms 10-Q. 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.

[1] Adjusted net earnings exclude $2.9 million ($1.9 million after tax or
$0.04 per diluted share) in costs related primarily to the JA Holding, Inc.
acquisition and separation costs associated with a former executive. Also
excluded is a $9.5 million ($6.1 million after tax or $0.12 per diluted share)
non-cash goodwill impairment charge related to K&G.





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
August 3, 2013 AND July 28, 2012
(In thousands, except per share data)
                    Three Months Ended                   Variance
                             % of              % of                         Basis
                    2013     Sales    2012     Sales     Dollar    %        Points
Net sales:
 Retail    $       63.14%   $        62.36%    $(4,341)  (1.05%)  0.78
clothing product    408,683          413,024
 Tuxedo    147,701  22.82%   154,124  23.27%    (6,423)   (4.17%)  (0.45)
rental services

Alteration and      37,056   5.73%    37,540   5.67%     (484)     (1.29%)  0.06
other services
      593,440  91.69%   604,688  91.30%    (11,248)  (1.86%)  0.38
Total retail sales

Corporate apparel   53,815   8.31%    57,614   8.70%     (3,799)   (6.59%)  (0.38)
clothing product
sales
 647,255  100.00%  662,302  100.00%   (15,047)  (2.27%)  0.00
Total net sales
  338,461  52.29%   342,045  51.64%    (3,584)   (1.05%)  0.65
Total cost of sales
Gross margin (a):
 Retail      231,105  56.55%   228,986  55.44%    2,119     0.93%    1.11
clothing product
 Tuxedo      125,123  84.71%   132,889  86.22%    (7,766)   (5.84%)  (1.51)
rental services
 Alteration  8,130    21.94%   9,395    25.03%    (1,265)   (13.46%) (3.09)
and other services
 Occupancy   (72,791) (12.27%) (69,367) (11.47%)  (3,424)   (4.94%)  (0.79)
costs

Total retail gross  291,567  49.13%   301,903  49.93%    (10,336)  (3.42%)  (0.80)
margin

Corporate apparel   17,227   32.01%   18,354   31.86%    (1,127)   (6.14%)  0.15
clothing product
margin
  308,794  47.71%   320,257  48.36%    (11,463)  (3.58%)  (0.65)
Total gross margin
Goodwill impairment 9,501    1.47%    -        0.00%     9,501     NM       1.47
charge
Selling, general
and administrative  232,505  35.92%   228,667  34.53%    3,838     1.68%    1.40
expenses
Operating income    66,788   10.32%   91,590   13.83%    (24,802)  (27.08%) (3.51)
Net interest        (359)    (0.06%)  (365)    (0.06%)   6         (1.64%)  0.00
Earnings before     66,429   10.26%   91,225   13.77%    (24,796)  (27.18%) (3.51)
income taxes
Provision for       23,451   3.62%    31,655   4.78%     (8,204)   (25.92%) (1.16)
income taxes
Net earnings
including           42,978   6.64%    59,570   8.99%     (16,592)  (27.85%) (2.35)
non-controlling
interest
Net earnings
attributable to     (35)     (0.01%)  (177)    (0.03%)   142       80.23%   (0.02)
non-controlling
interest
Net earnings        $               $                 $
attributable to     42,943  6.63%    59,393  8.97%     (16,450) (27.70%) (2.33)
common shareholders
Net earnings per
diluted common      $              $   
share attributable   0.85           1.15
to common
shareholders
Weighted-average
diluted common      50,133            50,932
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 STATEMENTS OF EARNINGS

(Unaudited)
FOR THE SIX MONTHS ENDED
August 3, 2013 AND July 28, 2012
(In thousands, except per share data)
                    Six Months Ended                       Variance
                              % of               % of                         Basis
                    2013      Sales    2012      Sales     Dollar    %        Points
Net sales:
 Retail    $        65.87%   $        66.74%    $ (1,073) (0.13%)  (0.87)
clothing product    832,420           833,493
 Tuxedo    246,183   19.48%   232,613   18.63%    13,570    5.83%    0.85
rental services

Alteration and      75,018    5.94%    75,274    6.03%     (256)     (0.34%)  (0.09)
other services
      1,153,621 91.28%   1,141,380 91.39%    12,241    1.07%    (0.11)
Total retail sales

Corporate apparel   110,170   8.72%    107,496   8.61%     2,674     2.49%    0.11
clothing product
sales
 1,263,791 100.00%  1,248,876 100.00%   14,915    1.19%    0.00
Total net sales
 677,077   53.58%   674,570   54.01%    2,507     0.37%    (0.44)
Total cost of sales
Gross margin (a):
 Retail      469,359   56.38%   460,849   55.29%    8,510     1.85%    1.09
clothing product
 Tuxedo      209,107   84.94%   200,365   86.14%    8,742     4.36%    (1.20)
rental services
 Alteration  17,674    23.56%   19,571    26.00%    (1,897)   (9.69%)  (2.44)
and other services
 Occupancy   (144,065) (12.49%) (138,065) (12.10%)  (6,000)   4.35%    (0.39)
costs

Total retail gross  552,075   47.86%   542,720   47.55%    9,355     1.72%    0.31
margin

Corporate apparel   34,639    31.44%   31,586    29.38%    3,053     9.67%    2.06
clothing product
margin
  586,714   46.42%   574,306   45.99%    12,408    2.16%    0.44
Total gross margin
Goodwill impairment 9,501     0.75%    -         0.00%     9,501     NM       0.75
charge
Selling, general
and administrative  457,872   36.23%   441,769   35.37%    16,103    3.65%    0.86
expenses
Operating income    119,341   9.44%    132,537   10.61%    (13,196)  (9.96%)  (1.17)
Net interest        (582)     (0.05%)  (670)     (0.05%)   88        (13.13%) 0.01
Earnings before     118,759   9.40%    131,867   10.56%    (13,108)  (9.94%)  (1.16)
income taxes
Provision for       42,825    3.39%    45,717    3.66%     (2,892)   (6.33%)  (0.27)
income taxes
Net earnings
including           75,934    6.01%    86,150    6.90%     (10,216)  (11.86%) (0.89)
non-controlling
interest
Net loss
attributable to     100       0.01%    127       0.01%     (27)      21.26%   0.00
non-controlling
interest
Net earnings        $                $  
attributable to     76,034    6.02%    86,277    6.91%     $(10,243) (11.87%) (0.89)
common shareholders
Net earnings per
diluted common      $              $    
share attributable  1.50              1.67
to common
shareholders
Weighted-average
diluted common      50,460             51,084
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)
                                     August 3,             July 28,
                                     2013                  2012
ASSETS
Current assets:
  Cash and cash equivalents          $       32,488  $     
                                                           106,399
  Accounts receivable, net           56,083                69,622
  Inventories                        599,811               577,078
  Other current assets               71,835                70,786
   Total current assets            760,217               823,885
Property and equipment, net          397,129               383,015
Tuxedo rental product, net           144,171               116,586
Goodwill                             76,510                87,672
Intangible assets, net               30,022                32,093
Other assets                         6,485                 4,748
   Total assets                    $     1,414,534   $     1,447,999
LIABILITIES AND EQUITY
Current liabilities:
  Accounts payable                   $      136,629   $     
                                                           119,433
  Accrued expenses and other current 172,446               161,850
  liabilities
  Income taxes payable               3,554                 728
   Total current liabilities       312,629               282,011
Deferred taxes and other liabilities 86,836                98,401
   Total liabilities               399,465               380,412
Equity:
  Preferred stock                    -                     -
  Common stock                       708                   722
  Capital in excess of par           382,519               372,601
  Retained earnings                  1,162,933             1,163,324
  Accumulated other comprehensive    26,234                36,302
  income
  Treasury stock, at cost            (569,860)             (517,894)
   Total equity attributable to    1,002,534             1,055,055
  common shareholders
  Non-controlling interest           12,535                12,532
   Total equity                    1,015,069             1,067,587
   Total liabilities and equity   $    1,414,534    $     1,447,999



THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
FOR THE SIX MONTHS ENDED
August 3, 2013 AND July 28, 2012
(In thousands)
                                         Six Months Ended
                                         2013                2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net earnings including non-controlling  $     75,934   $     86,150
 interest
 Non-cash adjustments to net earnings:
  Depreciation and amortization        43,450              41,775
  Tuxedo rental product amortization   19,004              17,956
  Goodwill impairment charge           9,501               -
  Other                                5,624               12,790
 Changes in operating assets and         (52,271)            (50,239)
 liabilities
  Net cash provided by operating  101,242             108,432
 activities
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures                    (52,261)            (68,846)
 Proceeds from sales of property and     191                 14
 equipment
  Net cash used in investing      (52,070)            (68,832)
 activities
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of common stock  5,409               3,939
 Cash dividends paid                     (18,350)            (18,613)
 Deferred financing costs                (1,776)             -
 Tax payments related to vested deferred (3,865)             (4,421)
 stock units
 Excess tax benefits from share-based    1,114               2,039
 plans
 Repurchases of common stock             (152,129)           (41,296)
  Net cash used in financing      (169,597)           (58,352)
 activities
 Effect of exchange rate changes         (3,150)             (155)
DECREASE IN CASH AND CASH EQUIVALENTS    (123,575)           (18,907)
 Balance at beginning of period          156,063             125,306
 Balance at end of period                $      32,488  $     106,399

SOURCE The Men's Wearhouse

Website: http://www.menswearhouse.com
 
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