Men's Wearhouse Reports Fiscal 2012 Third Quarter Results
- Q3 2012 GAAP diluted earnings per share grew 20% to $0.95 versus last year's comparable adjusted third quarter earnings per share
- Company updates guidance for fiscal fourth quarter and fiscal full year 2012
HOUSTON, Dec. 5, 2012 /PRNewswire/ -- The Men's Wearhouse (NYSE: MW) today announced its consolidated financial results for the fiscal third quarter ended October 27, 2012 and will file its Form 10-Q tomorrow morning, December 6, 2012.
Comparable diluted earnings per share rose 20% over last year's third quarter and were within the $0.95 to $0.98 guidance range given on September 5, 2012.
Net earnings for the 2012 fiscal third quarter was $48.8 million, or $0.95 diluted earnings per share, compared to net earnings of $39.9 million, or $0.77 diluted earnings per share, in the same period in 2011. Last year's third quarter adjusted diluted earnings per share was $0.79 after excluding $1.0 million ($0.7 million after tax or $0.01 per diluted share) in acquisition related integration costs and $0.7 million ($0.5 million after tax or $0.01 per diluted share) for a non-cash asset impairment charge.
Total net sales for the fiscal 2012 third quarter increased 7.9% to $631.0 million from $584.6 million for the same period a year ago. Retail segment sales increased by 7.7% or $40.2 million and corporate apparel sales increased by 10.1% or $6.1 million.
Doug Ewert, Men's Wearhouse president and chief executive officer, stated, "Sales at our flagship brand Men's Wearhouse stores, which represented 65% of our total third quarter sales, were above both prior year sales and our plan for the quarter. Comparable store sales increased 9.5% as our customers responded well to our promotions and value proposition in the third quarter. In addition, our higher margin tuxedo rental revenues had a U.S. comparable store sales increase of 10.9% in the third quarter, driven by increased unit rental rates and unit rentals as well as the absence of the rentals shift last year to the fourth quarter for the 11-11-11 event date.
"Moores, our retail brand in Canada, was 11% of our total sales mix in the 2012 third quarter and delivered a comparable store sales increase of 3.0%," continued Ewert. "K&G, with 12% of our total third quarter sales, had a comparable store sales decrease of 4.2%. 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 third quarter sales, had a sales increase of 10.1% as planned launch dates for customer uniform programs occurred."
The following is a summary of net sales for third quarter and year to date fiscal 2012. The dollars shown are U.S. dollars in millions and due to rounded numbers may not sum. Comparable store sales do not include ecommerce sales and the Moores' comparable store sales change is based on the Canadian dollar.
| Third Quarter Net Sales Summary – Fiscal 2012 |
|||||
| Net Sales |
Comparable Store Sales Change |
||||
| Net Sales Change |
Current Year |
Current Year |
Prior Year |
||
| Total Retail Segment |
7.7% |
$40.2 |
$564.0 |
||
| Men's Wearhouse |
10.6% |
$38.9 |
$407.4 |
9.5% |
5.5% |
| K&G |
(3.5%) |
($2.8) |
$77.3 |
(4.2%) |
1.6% |
| Moores |
4.8% |
$3.3 |
$72.3 |
3.0% |
8.6% |
| MW Cleaners |
14.4% |
$0.9 |
$7.0 |
||
| Corporate Apparel Segment |
10.1% |
$6.1 |
$66.9 |
||
| Total Company |
7.9% |
$46.4 |
$631.0 |
||
| 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 |
4.6% |
$74.9 |
$1,705.4 |
||
| Men's Wearhouse |
6.9 % |
$78.2 |
$1,208.4 |
5.9% |
9.0% |
| K&G |
(3.2%) |
($9.0) |
$270.4 |
(3.8%) |
5.7% |
| Moores |
1.8% |
$3.7 |
$206.2 |
3.9% |
6.2% |
| MW Cleaners |
11.4% |
$2.1 |
$20.5 |
||
| Corporate Apparel Segment |
(8.2%) |
($15.5) |
$174.4 |
||
| Total Company |
3.3% |
$59.3 |
$1,879.9 |
||
2012 FINANCIAL GUIDANCE
For the fiscal year, the Company expects GAAP diluted earnings per share in a range of $2.57 to $2.63, an increase of 8.0% to 10.5% over the prior year adjusted diluted earnings per share of $2.38. Fiscal 2012 is a 53-week year with an extra week included in the fourth quarter. Diluted earnings per share from the extra week are estimated at $0.03.
For the fourth quarter, GAAP diluted earnings per share is expected to be in a range of $0.01 to a loss of $0.05 per share, as compared to the prior year adjusted loss per share of $0.05.
"Our current guidance reflects a lowered earnings expectation from our previous fourth quarter guidance, which was for diluted EPS in a range of $0.12 to $0.15," commented Ewert. "The guidance for the 2012 fiscal year is also lower than our previous estimate of $2.74 to $2.80. The revised guidance results from our lower than expected retail clothing sales in November and a more cautious outlook for the remainder of this fiscal year.
"We experienced negative November comparable store clothing sales in both the US and Canada as a result of lower traffic levels at our retail stores. We believe the storms in the northeast US at the start of the month, as well as consumer distractions caused by the presidential election, the "fiscal cliff" and other economic concerns, contributed to our reduced traffic levels. We further believe that a more cautious outlook for traffic trends and clothing sales through the fourth quarter is now warranted and have revised our guidance accordingly."
The following is a summary of guidance information. All comparable store sales growth is based on a 52-week comparable time period. Comparisons to prior year are to adjusted numbers which exclude acquisition related integration costs and a non-cash asset impairment charge.
| Guidance |
Guidance |
||
| 4Q FY 2012 |
FY 2012 |
||
| GAAP Diluted EPS |
|||
| $(0.05) to $0.01 |
$2.57 to $2.63 |
||
| Sales |
|||
| Total Sales Increase |
+9.5% to +10.5% |
+4.7% to +5.0% |
|
| Comparable Store Sales Growth |
|||
| MW: 63% of FY12 Total Sales |
+1% to +3% |
+4% to +5% |
|
| -- MW Tuxedo Rental Revenues |
+6% to +7% |
+6% to +7% |
|
| K&G: 15% of FY12 Total Sales |
-3% to -4% |
-3% to -4% |
|
| Moores: 11% of FY12 Total Sales |
+1% to +2% |
+2% to +3% |
|
| Corporate Apparel: 10% of FY12 Total Sales |
+17% to +18% |
-2% to -3% |
|
| Gross Margin Total Gross Margin Increase |
+8.7% to +11.2% |
+5.8% to +6.3% |
|
| Change in Gross Margin as Percent of Sales |
-0.30% to +0.25% |
+0.45% to +0.55% |
|
| SG&A |
|||
| Increase in SG&A |
+7.9% to +8.3% |
+5.9% to +6.1% |
|
| Other |
|||
| Effective Tax Rate |
52.0% |
33.5% |
|
| Weighted Average Shares (millions) |
51.007 |
51.023 |
|
| Average Foreign Exchange Conversion Rates |
|||
| -- US Dollar to the Pound |
1.608 |
1.590 |
|
| -- US Dollar to the Canadian Dollar |
1.000 |
1.001 |
|
| Dilutive Effect of Participating Securities |
$0.00 |
$0.03 |
|
CONFERENCE CALL AND WEBCAST INFORMATION
At 9:00am Eastern time on Thursday, December 6, 2012, Company management will host a conference call and real time webcast to review fiscal third quarter 2012 results and its outlook for the fourth quarter and full year 2012.
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 December 13, 2012 by calling 303-590-3030 and entering the access code of 4574470#, or a webcast archive will be available free on the website for approximately 90 days.
STORE INFORMATION
| October 27, 2012 |
October 28, 2011 |
January 28, 2012 |
||||||
| Number of Stores |
Sq. Ft. (000's) |
Number of Stores |
Sq. Ft. (000's) |
Number of Stores |
Sq. Ft. (000's) |
|||
| Men's Wearhouse |
625 |
3,570.7 |
597 |
3,399.6 |
607 |
3,462.7 |
||
| Men's Wearhouse and Tux |
303 |
417.5 |
361 |
503.7 |
343 |
474.6 |
||
| Moores, Clothing for Men |
118 |
747.8 |
117 |
741.9 |
117 |
741.7 |
||
| K&G (a) |
98 |
2,326.6 |
100 |
2,375.4 |
99 |
2,351.2 |
||
| Total |
1,144 |
7,062.6 |
1,175 |
7,020.6 |
1,166 |
7,030.2 |
||
(a) 92, 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 1,144 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, DRG&L
(832) 594-4004
| THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES |
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
||||||||
| (Unaudited) |
||||||||
| FOR THE THREE MONTHS ENDED |
||||||||
| October 27, 2012 AND October 29, 2011 |
||||||||
| (In thousands, except per share data) |
||||||||
| Three Months Ended |
Variance |
|||||||
| % of |
% of |
Basis |
||||||
| 2012 |
Sales |
2011 |
Sales |
Dollar |
% |
Points |
||
| Net sales: |
||||||||
| Retail clothing product |
$ 401,692 |
63.66% |
$ 377,307 |
64.54% |
$ 24,385 |
6.46% |
(0.88) |
|
| Tuxedo rental services |
124,648 |
19.75% |
112,005 |
19.16% |
12,643 |
11.29% |
0.60 |
|
| Alteration and other services |
37,701 |
5.98% |
34,480 |
5.90% |
3,221 |
9.34% |
0.08 |
|
| Total retail sales |
564,041 |
89.39% |
523,792 |
89.60% |
40,249 |
7.68% |
(0.21) |
|
| Corporate apparel clothing product sales |
66,933 |
10.61% |
60,810 |
10.40% |
6,123 |
10.07% |
0.21 |
|
| Total net sales |
630,974 |
100.00% |
584,602 |
100.00% |
46,372 |
7.93% |
0.00 |
|
| Total cost of sales |
340,277 |
53.93% |
316,433 |
54.13% |
23,844 |
7.54% |
(0.20) |
|
| Gross margin (a): |
||||||||
| Retail clothing product |
225,191 |
56.06% |
215,638 |
57.15% |
9,553 |
4.43% |
(1.09) |
|
| Tuxedo rental services |
108,151 |
86.77% |
96,244 |
85.93% |
11,907 |
12.37% |
0.84 |
|
| Alteration and other services |
9,698 |
25.72% |
7,811 |
22.65% |
1,887 |
24.16% |
3.07 |
|
| Occupancy costs |
(71,198) |
(12.62%) |
(69,425) |
(13.25%) |
(1,773) |
(2.55%) |
0.63 |
|
| Total retail gross margin |
271,842 |
48.20% |
250,268 |
47.78% |
21,574 |
8.62% |
0.42 |
|
| Corporate apparel clothing product margin |
18,855 |
28.17% |
17,901 |
29.44% |
954 |
5.33% |
(1.27) |
|
| Total gross margin |
290,697 |
46.07% |
268,169 |
45.87% |
22,528 |
8.40% |
0.20 |
|
| Selling, general and administrative expenses |
218,188 |
34.58% |
208,147 |
35.60% |
10,041 |
4.82% |
(1.03) |
|
| Operating income |
72,509 |
11.49% |
60,022 |
10.27% |
12,487 |
20.80% |
1.22 |
|
| Net interest |
(136) |
(0.02%) |
(284) |
(0.05%) |
148 |
(52.11%) |
0.03 |
|
| Earnings before income taxes |
72,373 |
11.47% |
59,738 |
10.22% |
12,635 |
21.15% |
1.25 |
|
| Provision for income taxes |
23,304 |
3.69% |
19,836 |
3.39% |
3,468 |
17.48% |
0.30 |
|
| Net earnings including noncontrolling interest |
49,069 |
7.78% |
39,902 |
6.83% |
9,167 |
22.97% |
0.95 |
|
| Net earnings attributable to noncontrolling interest |
(226) |
(0.04%) |
(25) |
0.00% |
(201) |
804.00% |
(0.03) |
|
| Net earnings attributable to common shareholders |
$ 48,843 |
7.74% |
$ 39,877 |
6.82% |
$ 8,966 |
22.48% |
0.92 |
|
| Net earnings per diluted common share attributable to common shareholders |
$ 0.95 |
$ 0.77 |
||||||
| Weighted average diluted common shares outstanding: |
50,919 |
51,339 |
||||||
| (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 NINE MONTHS ENDED |
||||||||
| October 27, 2012 AND October 29, 2011 |
||||||||
| (In thousands, except per share data) |
||||||||
| Nine Months Ended |
Variance |
|||||||
| % of |
% of |
Basis |
||||||
| 2012 |
Sales |
2011 |
Sales |
Dollar |
% |
Points |
||
| Net sales: |
||||||||
| Retail clothing product |
$1,235,185 |
65.71% |
$1,189,357 |
65.33% |
$45,828 |
3.85% |
0.38 |
|
| Tuxedo rental services |
357,261 |
19.00% |
333,413 |
18.31% |
23,848 |
7.15% |
0.69 |
|
| Alteration and other services |
112,975 |
6.01% |
107,767 |
5.92% |
5,208 |
4.83% |
0.09 |
|
| Total retail sales |
1,705,421 |
90.72% |
1,630,537 |
89.56% |
74,884 |
4.59% |
1.16 |
|
| Corporate apparel clothing product sales |
174,429 |
9.28% |
189,978 |
10.44% |
(15,549) |
(8.18%) |
(1.16) |
|
| Total net sales |
1,879,850 |
100.00% |
1,820,515 |
100.00% |
59,335 |
3.26% |
0.00 |
|
| Total cost of sales |
1,014,847 |
53.99% |
996,468 |
54.74% |
18,379 |
1.84% |
(0.75) |
|
| Gross margin (a): |
||||||||
| Retail clothing product |
686,040 |
55.54% |
661,419 |
55.61% |
24,621 |
3.72% |
(0.07) |
|
| Tuxedo rental services |
308,516 |
86.36% |
287,683 |
86.28% |
20,833 |
7.24% |
0.07 |
|
| Alteration and other services |
29,269 |
25.91% |
27,415 |
25.44% |
1,854 |
6.76% |
0.47 |
|
| Occupancy costs |
(209,263) |
(12.27%) |
(205,006) |
(12.57%) |
(4,257) |
(2.08%) |
0.30 |
|
| Total retail gross margin |
814,562 |
47.76% |
771,511 |
47.32% |
43,051 |
5.58% |
0.45 |
|
| Corporate apparel clothing product margin |
50,441 |
28.92% |
52,536 |
27.65% |
(2,095) |
(3.99%) |
1.26 |
|
| Total gross margin |
865,003 |
46.01% |
824,047 |
45.26% |
40,956 |
4.97% |
0.75 |
|
| Selling, general and administrative expenses |
659,957 |
35.11% |
631,370 |
34.68% |
28,587 |
4.53% |
0.43 |
|
| Operating income |
205,046 |
10.91% |
192,677 |
10.58% |
12,369 |
6.42% |
0.32 |
|
| Net interest |
(806) |
(0.04%) |
(781) |
(0.04%) |
(25) |
3.20% |
0.00 |
|
| Earnings before income taxes |
204,240 |
10.86% |
191,896 |
10.54% |
12,344 |
6.43% |
0.32 |
|
| Provision for income taxes |
69,021 |
3.67% |
67,532 |
3.71% |
1,489 |
2.20% |
(0.04) |
|
| Net earnings including noncontrolling interest |
135,219 |
7.19% |
124,364 |
6.83% |
10,855 |
8.73% |
0.36 |
|
| Net (earnings) loss attributable to noncontrolling interest |
(99) |
(0.01%) |
16 |
0.00% |
(115) |
718.75% |
(0.01) |
|
| Net earnings attributable to common shareholders |
$ 135,120 |
7.19% |
$ 124,380 |
6.83% |
$10,740 |
8.63% |
0.36 |
|
| Net earnings per diluted common share attributable to common shareholders |
$ 2.62 |
$ 2.37 |
||||||
| Weighted average diluted common shares outstanding: |
51,029 |
51,776 |
||||||
| (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) |
||||
| October 27, |
October 29, |
|||
| 2012 |
2011 |
|||
| ASSETS |
||||
| Current assets: |
||||
| Cash and cash equivalents |
$ 138,016 |
$ 138,545 |
||
| Accounts receivable, net |
82,966 |
66,094 |
||
| Inventories |
623,860 |
616,758 |
||
| Other current assets |
68,519 |
61,088 |
||
| Total current assets |
913,361 |
882,485 |
||
| Property and equipment, net |
379,969 |
348,785 |
||
| Tuxedo rental product, net |
118,202 |
85,876 |
||
| Goodwill |
88,473 |
88,707 |
||
| Intangible assets, net |
31,992 |
35,378 |
||
| Other assets |
4,431 |
3,579 |
||
| Total assets |
$ 1,536,428 |
$ 1,444,810 |
||
| LIABILITIES AND EQUITY |
||||
| Current liabilities: |
||||
| Accounts payable |
$ 170,549 |
$ 155,610 |
||
| Accrued expenses and other current liabilities |
149,244 |
146,391 |
||
| Income taxes payable |
4,939 |
22,727 |
||
| Total current liabilities |
324,732 |
324,728 |
||
| Deferred taxes and other liabilities |
92,057 |
76,429 |
||
| Total liabilities |
416,789 |
401,157 |
||
| Equity: |
||||
| Preferred stock |
- |
- |
||
| Common stock |
725 |
717 |
||
| Capital in excess of par |
380,099 |
356,414 |
||
| Retained earnings |
1,202,922 |
1,108,662 |
||
| Accumulated other comprehensive income |
40,735 |
41,504 |
||
| Treasury stock, at cost |
(517,894) |
(476,749) |
||
| Total equity attributable to common shareholders |
1,106,587 |
1,030,548 |
||
| Noncontrolling interest |
13,052 |
13,105 |
||
| Total equity |
1,119,639 |
1,043,653 |
||
| Total liabilities and equity |
$ 1,536,428 |
$ 1,444,810 |
||
| THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES |
||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
| (Unaudited) |
||||
| FOR THE NINE MONTHS ENDED |
||||
| October 27, 2012 AND October 29, 2011 |
||||
| (In thousands) |
||||
| Nine Months Ended |
||||
| 2012 |
2011 |
|||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||
| Net earnings including noncontrolling interest |
$ 135,219 |
$ 124,364 |
||
| Non-cash adjustments to net earnings: |
||||
| Depreciation and amortization |
61,798 |
56,572 |
||
| Tuxedo rental product amortization |
25,330 |
25,923 |
||
| Other |
18,339 |
26,164 |
||
| Changes in operating assets and liabilities |
(74,177) |
(85,477) |
||
| Net cash provided by operating activities |
166,509 |
147,546 |
||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||
| Capital expenditures |
(90,085) |
(66,960) |
||
| Proceeds from sales of property and equipment |
25 |
59 |
||
| Net cash used in investing activities |
(90,060) |
(66,901) |
||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||
| Proceeds from issuance of common stock |
6,918 |
5,995 |
||
| Cash dividends paid |
(27,832) |
(18,880) |
||
| Tax payments related to vested deferred stock units |
(4,421) |
(2,955) |
||
| Excess tax benefits from share-based plans |
2,737 |
1,592 |
||
| Repurchases of common stock |
(41,296) |
(63,988) |
||
| Net cash used in financing activities |
(63,894) |
(78,236) |
||
| Effect of exchange rate changes |
155 |
(235) |
||
| INCREASE IN CASH AND CASH EQUIVALENTS |
12,710 |
2,174 |
||
| Balance at beginning of period |
125,306 |
136,371 |
||
| Balance at end of period |
$ 138,016 |
$ 138,545 |
||
SOURCE Men's Wearhouse, Inc.
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