Men's Wearhouse Reports Fiscal 2009 Fourth Quarter and Full Year Results
- Q4 2009 GAAP diluted loss per share was $0.36 including a $0.25 per diluted share non-cash asset impairment charge resulting in Q4 2009 adjusted loss per share of $0.11
- Fiscal 2009 GAAP diluted earnings per share were $0.86 and adjusted diluted earnings per share were $1.11
- Company provides guidance for first quarter of fiscal 2010
- Conference call at 5:00 pm Eastern today
HOUSTON, March 10 /PRNewswire-FirstCall/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the fourth quarter ended January 30, 2010.
Fourth Quarter Sales Summary – Fiscal 2009
------------------------------------------
Comparable Store Sales
U.S. dollars, in millions Total Change %
------------------------- Sales -----------------------
Current Year Prior Year Change % Current Year Prior Year
------------ ---------- ------------ ----------
Total
Company $457.2 $476.4 -4.0%
-------- ------ ------ ----
MW $294.3(a) $315.8(a) -6.8% -7.1%(b) -9.7%(b)
-- ------ ------ ---- ---- ----
K&G $92.7 $98.6 -6.0% -5.0% -10.7%
--- ----- ----- ---- ---- -----
United
States $395.5 $424.5 -6.8% -6.6% -9.9%
------- ------ ------ ---- ---- ----
Moores $61.7 $51.9 19.1% 1.9%(c) -10.5%(c)
------ ----- ----- ---- --- -----
Year-To-Date Sales Summary – Fiscal 2009
----------------------------------------
Comparable Store Sales
U.S. dollars, in millions Total Change %
------------------------- Sales -----------------------
Current Year Prior Year Change % Current Year Prior Year
------------ ---------- ------------ ----------
Total
Company $1,909.6 $1,972.4 -3.2%
-------- -------- -------- ----
MW $1,281.8(a) $1,322.0(a) -3.0% -4.0%(b) -9.0%(b)
-- -------- -------- ---- ---- ----
K&G $370.1 $376.0 -1.6% -1.9% -11.7%
--- ------ ------ ---- ---- -----
United
States $1,687.5 $1,742.2 -3.1% -3.5% -9.6%
------- -------- -------- ---- ---- ----
Moores $222.1 $230.2 -3.6% -0.9%(c) -5.6%(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 loss per share was $0.36 for the fourth quarter ended January 30, 2010. Adjusted loss per share was $0.11. This excludes a $13.1 million (net of tax) or $0.25 per diluted share non-cash asset impairment charge. This compares to diluted loss per share guidance given December 8, 2009 of $0.15 to $0.19. Prior year fourth quarter GAAP diluted earnings per share were $0.03 and adjusted loss per share was $0.06 excluding $5.8 million (net of tax) or $0.11 per diluted share gain from an asset sale and $1.2 million (net of tax) or $0.02 per diluted share for a non-cash asset impairment charge.
Diluted earnings per share were $0.86 for fiscal year 2009. Adjusted diluted earnings per share were $1.11. This excludes a $13.1 million (net of tax) or $0.25 per diluted share non-cash asset impairment charge.
FOURTH Quarter REVIEW
- Total Company sales decreased 4.0% for the quarter.
- Clothing product sales, representing 85.3% of fiscal fourth quarter 2009 total net sales, decreased 4.1% due to decreases in the Company's comparable store sales primarily driven by a reduction in store traffic levels and a lower domestic average ticket.
- Tuxedo rental sales, representing 7.7% of fiscal fourth quarter 2009 total net sales, decreased 1.2%.
- Gross margin before occupancy costs, as a percentage of total net sales, decreased 105 basis points from 53.7% to 52.7%. Clothing product margins, as a percentage of related sales, decreased 127 basis points primarily due to increased promotional activities.
- Occupancy costs increased, as a percentage of total net sales, by 35 basis points from 15.3% to 15.7%. On an absolute dollar basis, occupancy costs decreased 1.9% from $73.0 million in the prior year to $71.6 million.
- In the fourth quarter, the Company incurred a pretax non-cash asset impairment charge related to 157 stores (145 Men's Wearhouse and Tux stores and 12 K&G stores) in the amount of $19.5 million. Selling, general, and administrative expenses, excluding this charge, were $184.3 million in the current year and decreased 4.3% from the prior year's adjusted SG&A of $192.6 million which excludes an $8.8 million pretax gain from an asset sale and a $1.8 million pretax non-cash asset impairment charge. As a percentage of total net sales, adjusted SG&A decreased 10 basis points from 40.4% to 40.3%. Adjusted SG&A excluding advertising decreased 3.8% from the adjusted prior year quarter.
- Operating loss excluding the $19.5 million pretax non-cash asset impairment charge was $15.1 million or negative 3.3% of total net sales compared to adjusted operating loss of $9.6 million or negative 2.0% of total net sales for the same period last year, which excludes an $8.8 million pretax gain from an asset sale and a $1.8 million pretax non-cash asset impairment charge.
- Cash and cash equivalent balances as of the end of the fourth quarter of 2009 were $186.0 million, an increase of $81.5 million over the cash and cash equivalent balances plus amounts held in short-term investments as of the same period last year.
- Total inventories as of the end of the fourth quarter of 2009 were $431.5 million, a decrease of 2.0% from the prior year same period of $440.1 million.
- Long term debt as of the end of the fourth quarter of 2009 was $43.5 million, a decrease of $19.4 million from the same period last year.
- Fiscal 2009 total capital expenditures were $56.9 million, which consisted of $29.9 million for new stores, store remodels and store relocations and $27.0 million related to information technology and distribution centers and other corporate projects.
- During fiscal 2009, the Company opened 5 new Men's Wearhouse stores and 1 Men's Wearhouse and Tux store and closed 4 Men's Wearhouse stores, 1 K&G store, and 36 Men's Wearhouse and Tux stores.
FIRST QUARTER 2010 GUIDANCE
- For the first quarter of the fiscal year, the Company expects GAAP diluted earnings per share in a range of $0.12 to $0.16.
- The Company anticipates comparable store sales at its MW stores to be flat to a decline in the low single digit range, at K&G a decrease in the low single digit range and at Moores a flat to low single digit decrease. Included in this outlook is a low single digit increase in tuxedo rental revenues.
- Total gross profit for the first quarter is expected to increase in the low 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 low single digit range from the prior year.
- This guidance includes an estimated effective tax rate of 35.2% for the first quarter.
- Fully diluted shares outstanding of 52.5 million are estimated for the first quarter.
- Capital expenditures for the full year are targeted in a range of $55 million to $60 million and depreciation and amortization is estimated at $75 million.
UPDATED CONFERENCE CALL AND WEBCAST INFORMATION
At 5:00 pm Eastern time on Wednesday, March 10, 2010, company management will host a conference call and real time web cast to review the fiscal fourth quarter and full year 2009 and provide its outlook for first quarter 2010.
To access the conference call, dial 480-629-9867. 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 17, 2010 by calling 303-590-3030 and entering the access code of 4248288#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
January 30, 2010 January 31, 2009
---------------- ----------------
Number of Sq. Ft. Number of Sq. Ft.
Stores (000's) Stores (000's)
---------- ------- ---------- -------
Men's Wearhouse 581 3,284.4 580 3,263.1
--------------- --- ------- --- -------
Men's Wearhouse and Tux 454 623.4 489 665.0
----------------------- --- ----- --- -----
Moores, Clothing for Men 117 734.6 117 729.3
------------------------ --- ----- --- -----
K&G (a) 107 2,475.6 108 2,493.4
------ --- ------- --- -------
Total 1,259 7,118.0 1,294 7,150.8
(a) 94 and 93 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 1,259 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 year ended January 31, 2009 and subsequent Forms 10-Q.
For additional information on Men's Wearhouse, please visit the Company's website at www.menswearhouse.com.
CONTACT: |
Neill Davis, EVP & CFO, Men's Wearhouse (281) 776-7000 |
|
Ken Dennard, DRG&E (713) 529-6600 |
||
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE THREE MONTHS ENDED
January 30, 2010 AND January 31, 2009
(In thousands, except per share data)
Three Months Ended
------------------
% of % of
2009 Sales 2008 Sales
---- ----- ---- -----
Net sales:
Clothing product $390,140 85.33% $406,690 85.37%
Tuxedo rental
services 35,380 7.74% 35,806 7.52%
Alteration and other
services 31,698 6.93% 33,864 7.11%
------ ---- ------ ----
Total net sales 457,218 100.00% 476,360 100.00%
Total cost of sales 287,943 62.98% 293,370 61.59%
------- ----- ------- -----
Gross margin (a) 169,275 37.02% 182,990 38.41%
Selling, general and
administrative
expenses 203,818 44.58% 185,550 38.95%
------- ----- ------- -----
Operating loss (34,543) (7.56%) (2,560) (0.54%)
Net interest (153) (0.03%) (350) (0.07%)
---- ------- ---- -------
Loss before income
taxes (34,696) (7.59%) (2,910) (0.61%)
Benefit for income
taxes (15,778) (3.45%) (4,399) (0.92%)
------- ------ ------ ------
Net earnings (loss) $(18,918) (4.14%) $1,489 0.31%
======== ====== ====== ====
Net earnings (loss) per
diluted common share $(0.36) $0.03
====== =====
Weighted average
diluted common
shares outstanding: 52,297 52,037
====== ======
(a) Gross margin as a percentage of related sales:
Three Months Ended
------------------
% of % of
Related Related
2009 Sales 2008 Sales
---- ------- ---- -------
Clothing margin $204,967 52.54% $218,819 53.80%
Tuxedo margin 27,967 79.05% 25,860 72.22%
Alteration and other
services margin 7,985 25.19% 11,307 33.39%
Occupancy costs (71,644) (15.67%) (72,996) (15.32%)
------- ------ ------- ------
Gross margin $169,275 37.02% $182,990 38.41%
======== ===== ======== =====
Variance
--------
Basis
Dollar % Points
------ --- ------
Net sales:
Clothing product $(16,550) (4.07%) 0.05
Tuxedo rental services (426) (1.19%) 0.22
Alteration and other services (2,166) (6.40%) (0.18)
------ ------ -----
Total net sales (19,142) (4.02%) 0.00
Total cost of sales (5,427) (1.85%) 1.39
------ ------ ----
Gross margin (a) (13,715) (7.49%) (1.39)
Selling, general and
administrative expenses 18,268 9.85% 5.63
------ ---- ----
Operating loss (31,983) (1,249.34%) (7.02)
Net interest 197 56.29% 0.04
--- ----- ----
Loss before income taxes (31,786) (1,092.30%) (6.98)
Benefit for income taxes (11,379) (258.67%) (2.53)
------- --------- -----
Net earnings (loss) $(20,407) (1,370.52%) (4.45)
======== =========== =====
Net earnings (loss) per diluted
common share
Weighted average diluted common
shares outstanding:
(a) Gross margin as a percentage of related sales:
Variance
--------
Basis
Dollar % Points
------ --- ------
Clothing margin $(13,852) (6.33%) (1.27)
Tuxedo margin 2,107 8.15% 6.82
Alteration and other services
margin (3,322) (29.38%) (8.20)
Occupancy costs 1,352 1.85% (0.35)
----- ---- -----
Gross margin $(13,715) (7.49%) (1.39)
======== ======= =====
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE TWELVE MONTHS ENDED
January 30, 2010 AND January 31, 2009
(In thousands, except per share data)
Twelve Months Ended
-------------------
% of % of
2009 Sales 2008 Sales
---- ----- ---- -----
Net sales:
Clothing product $1,447,386 75.80% $1,515,704 76.84%
Tuxedo rental
services 334,068 17.49% 329,951 16.73%
Alteration and
other services 128,121 6.71% 126,763 6.43%
------- ---- ------- ----
Total net
sales 1,909,575 100.00% 1,972,418 100.00%
Total cost of
sales 1,111,849 58.22% 1,121,906 56.88%
--------- ----- --------- -----
Gross margin (a) 797,726 41.78% 850,512 43.12%
Selling, general
and administrative
expenses 729,522 38.20% 760,041 38.53%
------- ----- ------- -----
Operating income 68,204 3.57% 90,471 4.59%
Net interest (332) (0.02%) (1,708) (0.09%)
---- ------- ------ ------
Earnings before
income taxes 67,872 3.55% 88,763 4.50%
Provision for
income taxes 22,364 1.17% 29,919 1.52%
------ ---- ------ ----
Net earnings $45,508 2.38% $58,844 2.98%
======= ==== ======= ====
Net earnings
per diluted
common share (b) $0.86 $1.13
===== =====
Weighted average
diluted common
shares outstanding: 52,280 51,944
====== ======
(a) Gross margin as a percentage of related sales:
Twelve Months Ended
-------------------
% of % of
Related Related
2009 Sales 2008 Sales
---- -------- ---- --------
Clothing margin $777,215 53.70% $843,075 55.62%
Tuxedo margin 276,651 82.81% 270,436 81.96%
Alteration and other
services margin 33,532 26.17% 30,598 24.14%
Occupancy costs (289,672) (15.17%) (293,597) (14.89%)
-------- ------ -------- ------
Gross margin $797,726 41.78% $850,512 43.12%
======== ===== ======== =====
(b) Calculated based on net earnings less net earnings allocated to
participating securities for the twelve months ended January 30,
2010.
Variance
--------
Basis
Dollar % Points
------ --- ------
Net sales:
Clothing product $(68,318) (4.51%) (1.05)
Tuxedo rental services 4,117 1.25% 0.77
Alteration and other
services 1,358 1.07% 0.28
----- ---- ----
Total net sales (62,843) (3.19%) 0.00
Total cost of sales (10,057) (0.90%) 1.35
------- ------ ----
Gross margin (a) (52,786) (6.21%) (1.35)
Selling, general and
administrative expenses (30,519) (4.02%) (0.33)
------- ------ -----
Operating income (22,267) (24.61%) (1.02)
Net interest 1,376 80.56% 0.07
----- ----- ----
Earnings before income taxes (20,891) (23.54%) (0.95)
Provision for income taxes (7,555) (25.25%) (0.35)
------ ------- -----
Net earnings $(13,336) (22.66%) (0.60)
======== ======= =====
Net earnings per diluted
common share (b)
Weighted average diluted
common shares outstanding:
(a) Gross margin as a percentage of related sales:
Variance
--------
Basis
Dollar % Points
------ --- ------
Clothing margin $(65,860) (7.81%) (1.92)
Tuxedo margin 6,215 2.30% 0.85
Alteration and other
services margin 2,934 9.59% 2.03
Occupancy costs 3,925 1.34% (0.28)
----- ---- -----
Gross margin $(52,786) (6.21%) (1.35)
======== ====== =====
(b) Calculated based on net earnings less net earnings allocated to
participating securities for the twelve months ended January 30,
2010.
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 30, January 31,
2010 2009
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $186,018 $87,412
Short-term investments - 17,121
Accounts receivable, net 16,745 16,315
Inventories 431,492 440,099
Other current assets 74,075 70,668
------ ------
Total current assets 708,330 631,615
Property and equipment, net 344,746 387,472
Tuxedo rental product, net 102,479 96,691
Goodwill 59,414 57,561
Other assets, net 17,137 14,391
------ ------
Total assets $1,232,106 $1,187,730
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $83,052 $108,800
Accrued expenses and other current
liabilities 117,047 111,404
Income taxes payable 23,936 19
------ ---
Total current liabilities 224,035 220,223
Long-term debt 43,491 62,916
Deferred taxes and other liabilities 62,236 62,443
------ ------
Total liabilities 329,762 345,582
------- -------
Shareholders' equity:
Preferred stock - -
Common stock 705 700
Capital in excess of par 327,742 315,404
Retained earnings 953,986 924,288
Accumulated other comprehensive income 32,537 14,292
------ ------
Total 1,314,970 1,254,684
Treasury stock, at cost (412,626) (412,536)
-------- --------
Total shareholders' equity 902,344 842,148
------- -------
Total liabilities and equity $1,232,106 $1,187,730
========== ==========
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE TWELVE MONTHS ENDED
January 30, 2010 AND January 31, 2009
(In thousands)
Twelve Months Ended
-------------------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $45,508 $58,844
Non-cash adjustments to net earnings:
Depreciation and amortization 86,090 90,665
Tuxedo rental product
amortization 37,184 38,180
Asset impairment charges 19,473 1,812
Other (16,379) 10,130
Changes in assets and
liabilities (8,721) (70,141)
------ -------
Net cash provided by
operating activities 163,155 129,490
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (56,912) (88,225)
Proceeds from sale of
distribution facility - 9,588
Purchases of available-for-
sale investments - (17,121)
Proceeds from sales of
available-for-sale
investments 19,410 59,921
Other investing activities 797 811
--- ---
Net cash used in investing
activities (36,705) (35,026)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock 4,106 2,853
Proceeds from revolving
credit facility - 150,600
Payments on revolving credit
facility (25,000) (130,975)
Payments on Canadian term
loan - (31,880)
Cash dividends paid (14,722) (14,600)
Purchase of treasury stock (90) (156)
Other financing activities (1,242) (1,261)
------ ------
Net cash used in financing
activities (36,948) (25,419)
------- -------
Effect of exchange rate
changes 9,104 (21,079)
----- -------
INCREASE IN CASH AND CASH
EQUIVALENTS 98,606 47,966
Balance at beginning of
period 87,412 39,446
------ ------
Balance at end of period $186,018 $87,412
======== =======
SOURCE Men's Wearhouse
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