UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-16097

THE MEN’S WEARHOUSE, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas		74-1790172
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
6380 Rogerdale Houston, Texas (Address of Principal Executive Offices)		77072-1624 (Zip Code)

(281) 776-7000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ. No o.

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ. No o.

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o. No þ.

     The number of shares of common stock of the Registrant, par value $.01 per share, outstanding at December 3, 2010 was 52,817,839 excluding 18,118,350 shares classified as Treasury Stock.

 

 

REPORT INDEX

Part and Item No.		Page No.
PART I — Financial Information
Item 1 — Condensed Consolidated Financial Statements
General Information			1
Condensed Consolidated Balance Sheets as of October 30, 2010 (unaudited), October 31, 2009 (unaudited) (as adjusted-Note 16) and January 30, 2010 (unaudited) (as adjusted-Note 16)			2
Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended October 30, 2010 (unaudited) and October 31, 2009 (unaudited) (as adjusted-Note 16)			3
Condensed Consolidated Statements of Other Comprehensive Income for the Three and Nine Months Ended October 30, 2010 (unaudited) and October 31, 2009 (unaudited) (as adjusted-Note 16)			4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 30, 2010 (unaudited) and October 31, 2009 (unaudited) (as adjusted-Note 16)			5
Notes to Condensed Consolidated Financial Statements (unaudited)			6
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3 — Quantitative and Qualitative Disclosures about Market Risk			42
Item 4 — Controls and Procedures			43
PART II — Other Information
Item 1 — Legal Proceedings			43
Item 1A— Risk Factors			44
Item 6 — Exhibits			45
SIGNATURES			45
EX-18
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

Forward-Looking and Cautionary Statements

     Certain statements made in this Quarterly Report on Form 10-Q and in other public filings and press releases by the Company contain “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risk and uncertainty. These forward-looking statements may include, but are not limited to, references to future capital expenditures, acquisitions, sales, earnings, margins, costs, number and costs of store openings, demand for clothing, market trends in the retail and corporate apparel clothing business, currency fluctuations, inflation and various economic and business trends. Forward-looking statements may be made by management orally or in writing, including, but not limited to, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and other sections of our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and the Securities Act of 1933.

     Forward-looking statements are not guarantees of future performance and a variety of factors could cause actual results to differ materially from the anticipated or expected results expressed in or suggested by these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, actions by governmental entities, domestic and international economic activity and inflation, our successful execution of internal operating plans and new store and new market expansion plans, including successful integration of acquisitions, performance issues with key suppliers, disruption in buying trends due to homeland security concerns, severe weather, foreign currency fluctuations, government export and import policies, aggressive advertising or marketing activities of competitors and legal proceedings. Future results will also be dependent upon our ability to continue to identify and complete successful expansions and penetrations into existing and new markets and our ability to integrate such expansions with our existing operations. Refer to “Risk Factors” in our Annual Report on Form 10-K for the year ended January 30, 2010 and Item 1A contained in Part II of this Quarterly Report on Form 10-Q for a more complete discussion of these and other factors that might affect our performance and financial results. These forward-looking statements are intended to relay the Company’s expectations about the future, and speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

     The condensed consolidated financial statements herein include the accounts of The Men’s Wearhouse, Inc. and its subsidiaries and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair statement of the results for the three and nine months ended October 30, 2010 and October 31, 2009.

     Our business historically has been seasonal in nature, and the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended January 30, 2010 and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year then ended filed with the SEC.

     Unless the context otherwise requires, “Company”, “we”, “us” and “our” refer to The Men’s Wearhouse, Inc. and its subsidiaries.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

		October 30,				October 31,				January 30,
		2010				2009				2010
						(as adjusted-				(as adjusted-
						Note 16)				Note 16)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	197,843			$	198,538			$	186,018
Accounts receivable, net			65,069				17,304				16,745
Inventories			509,422				476,760				434,881
Other current assets			62,830				47,744				72,732
Total current assets			835,164				740,346				710,376
PROPERTY AND EQUIPMENT, net			333,007				370,191				344,746
TUXEDO RENTAL PRODUCT, net			86,121				100,653				102,479
GOODWILL			90,580				59,111				59,414
INTANGIBLE ASSETS, net			38,678				5,279				4,287
OTHER ASSETS			21,831				7,376				12,850
TOTAL ASSETS		$	1,405,381			$	1,282,956			$	1,234,152
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable		$	145,138			$	121,374			$	83,052
Accrued expenses and other current liabilities			130,550				106,082				117,047
Income taxes payable			12,294				24,743				23,936
Current maturities of long-term debt			45,584				—				—
Total current liabilities			333,566				252,199				224,035
LONG-TERM DEBT			—				42,985				43,491
DEFERRED TAXES AND OTHER LIABILITIES			72,664				63,087				62,236
Total liabilities			406,230				358,271				329,762
COMMITMENTS AND CONTINGENCIES (Note 4 and Note 15)
EQUITY:
Preferred stock			—				—				—
Common stock			709				704				705
Capital in excess of par			336,942				323,864				327,742
Retained earnings			1,023,467				979,540				956,032
Accumulated other comprehensive income			37,651				33,203				32,537
Treasury stock, at cost			(412,761	)			(412,626	)			(412,626	)
Total equity attributable to common shareholders			986,008				924,685				904,390
Noncontrolling interest			13,143				—				—
Total equity			999,151				924,685				904,390
TOTAL LIABILITIES AND EQUITY		$	1,405,381			$	1,282,956			$	1,234,152

See Notes to Condensed Consolidated Financial Statements.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)

		For the Three Months Ended								For the Nine Months Ended
		October 30,				October 31,				October 30,				October 31,
		2010				2009				2010				2009
						(as adjusted-								(as adjusted-
						Note 16)								Note 16)
Net sales:
Clothing product		$	405,784			$	333,882			$	1,136,383			$	1,057,246
Tuxedo rental services			111,297				97,702				325,913				298,688
Alteration and other services			33,022				30,431				98,262				96,423
Total net sales			550,103				462,015				1,560,558				1,452,357
Cost of sales:
Clothing product, including buying and distribution costs			204,044				147,987				531,858				484,081
Tuxedo rental services			17,484				16,497				50,846				50,004
Alteration and other services			24,598				23,096				73,108				70,876
Occupancy costs			68,978				72,394				208,472				218,028
Total cost of sales			315,104				259,974				864,284				822,989
Gross margin			234,999				202,041				696,274				629,368
Selling, general and administrative expenses			200,588				172,595				571,406				525,704
Operating income			34,411				29,446				124,868				103,664
Interest income			83				289				163				778
Interest expense			(357	)			(308	)			(937	)			(957	)
Earnings before income taxes			34,137				29,427				124,094				103,485
Provision for income taxes			8,789				10,141				42,222				38,517
Net earnings including noncontrolling interest			25,348				19,286				81,872				64,968
Less: Net earnings attributable to noncontrolling interest			89				—				89				—
Net earnings attributable to common shareholders		$	25,259			$	19,286			$	81,783			$	64,968
Net earnings per common share attributable to common shareholders (Note 3):
Basic		$	0.47			$	0.37			$	1.54			$	1.24
Diluted		$	0.47			$	0.36			$	1.54			$	1.23
Weighted average common shares outstanding (Note 3):
Basic			52,702				52,208				52,589				52,072
Diluted			52,895				52,442				52,776				52,218
Cash dividends declared per common share		$	0.09			$	0.07			$	0.27			$	0.21

See Notes to Condensed Consolidated Financial Statements.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

		For the Three Months Ended								For the Nine Months Ended
		October 30,				October 31,				October 30,				October 31,
		2010				2009				2010				2009
						(as adjusted-								(as adjusted-
						Note 16)								Note 16)
Net earnings including noncontrolling interest		$	25,348			$	19,286			$	81,872			$	64,968
Change in derivative fair values, net of tax			(94	)			—				—				—
Currency translation adjustments, net of tax			1,487				(785	)			5,164				18,911
Other comprehensive income including noncontrolling interest			26,741				18,501				87,036				83,879
Other comprehensive income attributable to noncontrolling interest:
Net earnings			(89	)			—				(89	)			—
Currency translation adjustments, net of tax			(50	)			—				(50	)			—
Other comprehensive income attributable to noncontrolling interest			(139	)			—				(139	)			—
Other comprehensive income attributable to common shareholders		$	26,602			$	18,501			$	86,897			$	83,879

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

		For the Nine Months Ended
		October 30,				October 31,
		2010				2009
						(as adjusted-
						Note 16)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings including noncontrolling interest		$	81,872			$	64,968
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			57,210				64,879
Tuxedo rental product amortization			31,732				33,149
Loss on disposition of assets			209				2,012
Asset impairment charges			3,350				—
Gain on bargain purchase acquisition			(524	)			—
Deferred rent expense			2,138				1,640
Share-based compensation			8,787				7,603
Excess tax benefits from share-based plans			(952	)			(208	)
Deferred tax benefit			(1,724	)			(7,755	)
Increase in accounts receivable			(23,708	)			(769	)
Increase in inventories			(6,502	)			(27,968	)
Increase in tuxedo rental product			(14,492	)			(34,871	)
Decrease in other assets			4,194				29,919
Increase in accounts payable, accrued expenses and other current liabilities			36,760				6,214
Increase (decrease) in income taxes payable			(12,271	)			25,450
Decrease in other liabilities			(197	)			(1,863	)
Net cash provided by operating activities			165,882				162,400
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(43,835	)			(44,466	)
Acquisitions of businesses, net of cash			(97,786	)			—
Proceeds from sales of available-for-sale investments			—				19,410
Proceeds from sales of property and equipment			76				—
Net cash used in investing activities			(141,545	)			(25,056	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock			2,503				3,032
Payments on revolving credit facility			—				(25,000	)
Cash dividends paid			(14,318	)			(11,029	)
Tax payments related to vested deferred stock units			(2,748	)			(1,634	)
Excess tax benefits from share-based plans			952				208
Purchase of treasury stock			(144	)			(90	)
Net cash used in financing activities			(13,755	)			(34,513	)
Effect of exchange rate changes			1,243				8,295
INCREASE IN CASH AND CASH EQUIVALENTS			11,825				111,126
Balance at beginning of period			186,018				87,412
Balance at end of period		$	197,843			$	198,538

See Notes to Condensed Consolidated Financial Statements.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Significant Accounting Policies

     Basis of Presentation — The condensed consolidated financial statements herein include the accounts of The Men’s Wearhouse, Inc. and its subsidiaries (the “Company”) and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 30, 2010.

     The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates.

     On August 6, 2010, we acquired Dimensions Clothing Limited (“Dimensions”) and certain assets of Alexandra plc (“Alexandra”), two leading providers of corporate clothing uniforms and workwear in the United Kingdom (refer to Note 2 to the Condensed Consolidated Financial Statements for further details regarding the acquisitions). As a result of these acquisitions, in the third quarter of fiscal 2010, the Company revised its segment reporting to reflect two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities. Prior period amounts reported as one operating segment have been revised to conform with our new segment reporting structure. Refer to Note 13 to the Condensed Consolidated Financial Statements for further segment information.

     On September 1, 2010, the Company assigned its rights to receive an aggregate of $2.6 million of the proceeds from life insurance policies on the life of George Zimmer, Chairman of the Board and Chief Executive Officer, to Mr. Zimmer and a trust for the benefit of Mr. Zimmer in exchange for a cash payment of $2.6 million from Mr. Zimmer. The Company acquired the right to receive a portion of the proceeds from the life insurance policies as a result of paying premiums in the amount of $2.6 million on the policies. All such premium payments were made by the Company prior to 2003.

     Noncontrolling Interest — Noncontrolling interest in our condensed consolidated balance sheets represents the proportionate share of equity attributable to the minority shareholders of our consolidated United Kingdom subsidiaries. Noncontrolling interest is adjusted each period to reflect the allocation of comprehensive income to or the absorption of comprehensive losses by the noncontrolling interest.

     Derivative Financial Instruments — Derivative financial instruments are recorded in the condensed consolidated balance sheet at fair value as other current assets or accrued expenses and other current liabilities. The Company has not elected to apply hedge accounting to our derivative financial instruments. The gain or loss on derivative financial instruments is recorded in cost of sales in the condensed consolidated statements of earnings. See Note 12 to the Condensed Consolidated Financial Statements.

     Recent Accounting Guidance — In January 2010, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that expands the required disclosures about fair value measurements. This guidance provides for new disclosures requiring the Company to (a) disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers and (b) present separately information about purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements. This guidance also provides clarification of existing disclosures requiring the Company to (i) determine each class of assets and liabilities based on the nature and risks of the investments rather than by major security type and (ii) for each class of assets and liabilities, disclose the valuation techniques and inputs used to measure fair value for both Level 2 and Level 3 fair value measurements. We adopted this guidance effective January 31, 2010, except for the presentation of purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements, which will be effective for fiscal years beginning after December 15, 2010. The adoption of the first phase of this guidance did not have a material impact on our financial position, results of operations or cash flows.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

2. Acquisitions

     On August 6, 2010, we acquired Dimensions and certain assets of Alexandra, two leading providers of corporate clothing uniforms and workwear in the United Kingdom (“UK”), to expand our corporate apparel operations. The results of operations for Dimensions and Alexandra have been included in the condensed consolidated financial statements since that date. The acquired businesses are organized under a UK-based holding company, of which the Company controls 86% and certain existing shareholders of Dimensions control 14%. The Company has the right to acquire the remaining outstanding shares of the UK-based holding company after fiscal 2013 on terms set forth in the Investment, Shareholders’ and Stock Purchase Agreement.

     The acquisition-date cash consideration transferred for the Dimensions and Alexandra acquisitions was $79.8 million and $18.0 million, respectively, totaling $97.8 million (£61 million), and was funded through the Company’s cash on hand.

     The following table summarizes the preliminary estimates of the fair values of the identifiable assets acquired and liabilities assumed in the Dimensions and Alexandra acquisitions as of the date of acquisition. The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revisions, which may result in adjustments to the preliminary values presented below, when management’s appraisals and estimates are finalized.

		As of August 6, 2010
(in thousands)		Dimensions				Alexandra				Total
Current non-cash assets		$	25,127			$	—			$	25,127
Inventory			48,340				16,980				65,320
Property and equipment			5,374				283				5,657
Intangible assets			35,474				1,501				36,975
Total identifiable assets acquired			114,315				18,764				133,079
Current liabilities			41,003				279				41,282
Other liabilities			10,292				—				10,292
Total liabilities assumed			51,295				279				51,574
Net identifiable assets acquired			63,020				18,485				81,505
Goodwill			29,809				—				29,809
Subtotal			92,829				18,485				111,314
Less: Fair value of noncontrolling interest			(13,004	)			—				(13,004	)
Less: Gain on bargain purchase			—				(524	)			(524	)
Net assets acquired		$	79,825			$	17,961			$	97,786

     Goodwill is calculated as the excess of the purchase price over the net assets acquired. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Dimensions. All of the goodwill has been assigned to our corporate apparel reporting segment and is non-deductible for tax purposes.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

     Acquired intangible assets for both acquisitions consist primarily of customer-related contract and relationship intangibles and trademarks, which are being amortized over their estimated useful lives of primarily 12 years. Acquired intangible assets also include $1.3 million related to certain trademarks of Alexandra which are not subject to amortization but will be evaluated at least annually for impairment.

     In connection with the Alexandra acquisition, we recognized a preliminary gain on a bargain purchase of approximately $0.5 million which is included in “Selling, general and administrative expenses” (“SG&A”) in the 2010 condensed consolidated statements of earnings. The transaction resulted in a bargain purchase because the previous UK business of Alexandra plc was in administration (similar to bankruptcy) and was being sold through a bidding process. The gain on bargain purchase is subject to revisions until management’s appraisals and estimates of the fair value of the identifiable assets acquired and liabilities assumed are finalized, which may result in adjustments to the preliminary gain on bargain purchase reported for the period ended October 30, 2010.

     The $13.0 million noncontrolling interest fair value as of the August 6, 2010 acquisition date was determined based upon the $79.8 million fair value of consideration transferred to acquire our 86% interest in the UK businesses.

     Total costs incurred for the acquisitions of Dimensions and Alexandra were $1.4 million and $4.1 million for the three and nine months ended October 30, 2010 and are included in SG&A in the condensed consolidated statement of earnings.

     The acquired businesses contributed net sales of $50.6 million, gross margin of $13.6 million and a net loss, including the pretax $4.1 million in acquisition costs, of $2.5 million to the Company’s condensed consolidated statement of earnings from the date of acquisition to the period ended October 30, 2010.

     The following table presents unaudited pro forma financial information as if the closing of our acquisition of Dimensions had occurred on February 1, 2009, after giving effect to certain purchase accounting adjustments. The acquisition of Alexandra was not material to the Company’s financial position or results of operations, therefore pro forma operating results for Alexandra have not been included below.

		For the Three Months Ended								For the Nine Months Ended
		October 30,				October 31,				October 30,				October 31,
(in thousands, except per share data)		2010				2009				2010				2009
Total net sales		$	552,728			$	499,723			$	1,623,168			$	1,547,932
Net earnings attributable to common shareholders		$	26,220			$	20,959			$	86,463			$	70,064
Net earnings per common share attributable to common shareholders:
Basic		$	0.49			$	0.40			$	1.63			$	1.33
Diluted		$	0.49			$	0.40			$	1.62			$	1.33

     This pro forma information is not necessarily indicative of the results of operations that actually would have resulted had the Dimensions acquisition occurred on the dates indicated above or that may result in the future and does not reflect potential synergies, integration costs or other such costs and savings.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

3. Earnings per Share

     We calculate earnings per common share attributable to common shareholders using the two-class method in accordance with the guidance for determination of whether instruments granted in share-based payment transactions are participating securities. Our unvested restricted stock and deferred stock units contain rights to receive nonforfeitable dividends or dividend equivalents, respectively, and thus are participating securities requiring the two-class method of computing earnings per common share attributable to common shareholders. The two-class method is an earnings allocation formula that determines earnings per common share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

     Basic earnings per common share attributable to common shareholders is determined using the two-class method and is computed by dividing net earnings attributable to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per common share attributable to common shareholders reflects the more dilutive earnings per common share amount calculated using the treasury stock method or the two-class method.

     The following table sets forth the computation of basic and diluted earnings per common share attributable to common shareholders (in thousands, except per share amounts). Basic and diluted earnings per common share attributable to common shareholders are computed using the actual net earnings available to common shareholders and the actual weighted-average common shares outstanding rather than the rounded numbers presented within our condensed consolidated statement of earnings and the accompanying notes. As a result, it may not be possible to recalculate earnings per common share attributable to common shareholders in our condensed consolidated statement of earnings and the accompanying notes.

		For the Three Months								For the Nine Months
		Ended								Ended
		October 30,				October 31,				October 30,				October 31,
		2010				2009				2010				2009
Numerator
Total net earnings attributable to common shareholders		$	25,259			$	19,286			$	81,783			$	64,968
Net earnings allocated to participating securities (restricted stock and deferred stock units)			(236	)			(192	)			(758	)			(643	)
Net earnings attributable to common shareholders		$	25,023			$	19,094			$	81,025			$	64,325
Denominator
Basic weighted average common shares outstanding			52,702				52,208				52,589				52,072
Effect of dilutive securities:
Stock options and equity-based compensation			193				234				187				146
Diluted weighted average common shares outstanding			52,895				52,442				52,776				52,218
Net earnings per common share attributable to common shareholders:
Basic		$	0.47			$	0.37			$	1.54			$	1.24
Diluted		$	0.47			$	0.36			$	1.54			$	1.23

     In each of the three and nine months ended October 30, 2010, 0.9 million anti-dilutive stock options were excluded from the calculation of diluted earnings per common share. For the three and nine months ended October 31, 2009, 0.7 million and 1.0 million anti-dilutive stock options were excluded from the calculation of diluted earnings per common share, respectively.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

4. Debt

     Our Amended and Restated Credit Agreement (the “Credit Agreement”) with a group of banks, which was last amended on February 2, 2007, provides for a total senior secured revolving credit facility of $200.0 million, which can be expanded to $250.0 million upon additional lender commitments, that matures on February 11, 2012. The Credit Agreement also provided our Canadian subsidiaries with a secured term loan used to fund the repatriation of US$74.7 million of Canadian earnings in January 2006 under the American Jobs Creation Act of 2004. The Canadian term loan matures on February 10, 2011. The Credit Agreement is secured by the stock of certain of the Company’s subsidiaries. The Credit Agreement has several borrowing and interest rate options including the following indices: (i) an alternate base rate (equal to the greater of the prime rate or the federal funds rate plus 0.5%) or (ii) LIBO rate or (iii) CDO rate. Advances under the Credit Agreement bear interest at a rate per annum using the applicable indices plus a varying interest rate margin up to 1.125%. The Credit Agreement also provides for fees applicable to unused commitments ranging from 0.100% to 0.175%. As of October 30, 2010, there was US$45.6 million outstanding under the Canadian term loan with an effective interest rate of 1.9%, and no borrowings outstanding under the revolving credit facility.

     The Credit Agreement contains certain restrictive and financial covenants, including the requirement to maintain certain financial ratios. The restrictive provisions in the Credit Agreement reflect an overall covenant structure that is generally representative of a commercial loan made to an investment-grade company. Our debt, however, is not rated, and we have not sought, and are not seeking, a rating of our debt. We were in compliance with the covenants in the Credit Agreement as of October 30, 2010.

     We are in the process of amending and restating the Credit Agreement to provide for a total secured revolving credit facility of $200.0 million, which can be expanded to $300.0 million upon additional lender commitments, to mature in December 2015. In addition, as amended and restated, the revolving facility is expected to allow for borrowings in multiple currencies, including US dollars, Canadian dollars and pounds Sterling, and to make certain adjustments to the financial covenants. In addition to use for general corporate purposes, we intend to use borrowings under the amended and restated facility to pay off the Canadian term loan discussed above. We anticipate closing the amendment and restatement of our credit facility in the fourth quarter of fiscal 2010.

     We utilize letters of credit primarily to secure inventory purchases and as collateral for workers compensation claims. At October 30, 2010, letters of credit totaling approximately $23.0 million were issued and outstanding. Borrowings available under our Credit Agreement at October 30, 2010 were $177.0 million.

5. Supplemental Cash Flows

     Supplemental disclosure of cash flow information is as follows (in thousands):

		For the Nine Months Ended
		October 30,				October 31,
		2010				2009
Cash paid (received) during the nine months for:
Interest		$	785			$	827
Income taxes, net			55,322				(3,518	)
Schedule of noncash investing and financing activities:
Tax benefit (deficiency) related to share-based plans			662				(537	)
Treasury stock contributed to employee stock plan			9				—
Cash dividends declared			4,783				3,691

     We had unpaid capital expenditure purchases accrued in accounts payable, accrued expenses and other current liabilities of approximately $2.1 million and $2.9 million at October 30, 2010 and October 31, 2009, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

6. Goodwill and Other Intangible Assets

     Goodwill

     Goodwill allocated to the Company’s reportable segments and changes in the net carrying amount of goodwill for the nine months ended October 30, 2010 are as follows (in thousands):

						Corporate
		Retail				Apparel				Total
Balance at January 30, 2010		$	58,120			$	1,294			$	59,414
Translation adjustment			1,249				108				1,357
Goodwill of acquired business			—				29,809				29,809
Balance at October 30, 2010		$	59,369			$	31,211			$	90,580

     The goodwill of acquired business resulted from our August 6, 2010 acquisition of Dimensions, a leading provider of corporate clothing uniforms and workwear in the UK. As indicated in Note 2 to the Condensed Consolidated Financial Statements (“Acquisitions”), the preliminary estimates of the fair value of the identifiable assets acquired and liabilities assumed for our August 6, 2010 acquisitions are not yet final and are subject to revisions until management’s appraisals and estimates are finalized, including goodwill, which may result in adjustments to the preliminary values as reported for the corporate apparel reportable segment at October 30, 2010.

     Goodwill is evaluated for impairment annually as of our fiscal year end. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. No additional impairment evaluation was considered necessary during the first nine months of 2010.

     Intangible Assets

     The gross carrying amount and accumulated amortization of our other intangibles, which are included in intangible assets, net in the accompanying condensed consolidated balance sheet, are as follows (in thousands):

		October 30,				October 31,				January 30,
		2010				2009				2010
Amortizable intangible assets:
Trademarks, tradenames, customer relationships and other intangibles		$	49,389			$	16,327			$	15,305
Accumulated amortization			(11,993	)			(11,048	)			(11,018	)
Total amortizable intangible assets, net			37,396				5,279				4,287
Infinite-lived intangible assets:
Trademarks			1,282				—				—
Total intangible assets, net		$	38,678			$	5,279			$	4,287

     The increases in amortizable and infinite-lived intangible assets at October 30, 2010 relate to intangible assets acquired in our acquisitions of Dimensions and Alexandra on August 6, 2010. Refer to Note 2 to the Condensed Consolidated Financial Statements for further information regarding these intangible assets and preliminary assessment values.

     The pretax amortization expense associated with intangible assets subject to amortization totaled approximately $1.5 million and $1.7 million for the nine months ended October 30, 2010 and October 31, 2009, respectively, and approximately $2.2 million for the year ended January 30, 2010. Pretax amortization associated with intangible assets subject to amortization at October 30, 2010 is estimated to be $1.0 million for the remainder of fiscal year 2010, $3.4 million for fiscal year 2011, $3.3 million for fiscal year 2012, $3.2 million for fiscal year 2013 and $3.1 million for fiscal year 2014.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

7. Other Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes and Other Liabilities

Other current assets consist of the following (in thousands):

		October 30,				October 31,				January 30,
		2010				2009				2010
Prepaid expenses		$	29,851			$	25,773			$	30,896
Current deferred tax asset			26,521				17,922				36,408
Other			6,458				4,049				5,428
Total other current assets		$	62,830			$	47,744			$	72,732
Accrued expenses and other current liabilities consist of the following (in thousands):
Accrued salary, bonus, sabbatical and vacation		$	35,689			$	32,509			$	40,032
Sales, payroll and property taxes payable			19,081				15,227				12,524
Accrued workers compensation and medical costs			17,090				16,772				17,484
Customer deposits, prepayments and refunds payable			14,130				10,204				9,523
Unredeemed gift certificates			11,921				12,351				14,980
Loyalty program reward certificates			7,002				6,134				6,342
Cash dividends declared			4,783				3,691				4,753
Other			20,854				9,194				11,409
Total accrued expenses and other current liabilities		$	130,550			$	106,082			$	117,047
Deferred taxes and other liabilities consist of the following (in thousands):
Deferred rent and landlord incentives		$	47,544			$	44,695			$	44,656
Non-current deferred and other income tax liabilities			17,433				11,337				10,976
Other			7,687				7,055				6,604
Total deferred taxes and other liabilities		$	72,664			$	63,087			$	62,236

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

8. Shareholders’ Equity and Noncontrolling Interest

     A reconciliation of the total carrying amount of the Company’s equity accounts for the fiscal year ended January 30, 2010 and for the nine months ended October 30, 2010 is as follows (in thousands):

																						Total
														Accumulated								Equity
						Capital in								Other								Attributable to
		Common				Excess of				Retained				Comprehensive				Treasury				Common				Noncontrolling				Total
		Stock				Par Value				Earnings				Income				Stock				Shareholders				Interest				Equity
Balances – January 30, 2010 (as adjusted-Note 16)		$	705			$	327,742			$	956,032			$	32,537			$	(412,626	)		$	904,390			$	—			$	904,390
Net earnings			—				—				81,783				—				—				81,783				89				81,872
Other comprehensive income (a)			—				—				—				5,114				—				5,114				50				5,164
Cash dividends paid			—				—				(9,565	)			—				—				(9,565	)			—				(9,565	)
Cash dividends declared			—				—				(4,783	)			—				—				(4,783	)			—				(4,783	)
Share-based compensation			—				8,787				—				—				—				8,787				—				8,787
Common stock issued to stock discount plan			1				1,511				—				—				—				1,512				—				1,512
Common stock issued upon exercise of stock options			1				990				—				—				—				991				—				991
Common stock issued pursuant to restricted stock and deferred stock unit awards			2				(2	)			—				—				—				—				—				—
Tax payments related to vested deferred stock units			—				(2,748	)			—				—				—				(2,748	)			—				(2,748	)
Tax benefit related to share-based plans			—				662				—				—				—				662				—				662
Treasury stock purchased			—				—				—				—				(144	)			(144	)			—				(144	)
Treasury stock issued to profit sharing plan			—				—				—				—				9				9				—				9
Fair value of noncontrolling interest associated with businesses acquired			—				—				—				—				—				—				13,004				13,004
Balances – October 30, 2010		$	709			$	336,942			$	1,023,467			$	37,651			$	(412,761	)		$	986,008			$	13,143			$	999,151

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

     A reconciliation of the total carrying amount of the Company’s equity accounts for the fiscal year ended January 31, 2009 and for the nine months ended October 31, 2009 is as follows (in thousands):

																						Total
														Accumulated								Equity
						Capital in								Other								Attributable to
		Common				Excess of				Retained				Comprehensive				Treasury				Common				Noncontrolling				Total
		Stock				Par Value				Earnings				Income				Stock				Shareholders				Interest				Equity
Balances – January 31, 2009		$	700			$	315,404			$	924,288			$	14,292			$	(412,536	)		$	842,148			$	—			$	842,148
Cumulative adjustment for change in accounting principle (Note 16)			—				—				1,339				—				—				1,339				—				1,339
Net earnings			—				—				64,968				—				—				64,968				—				64,968
Other comprehensive income (a)			—				—				—				18,911				—				18,911				—				18,911
Cash dividends paid			—				—				(7,364	)			—				—				(7,364	)			—				(7,364	)
Cash dividends declared			—				—				(3,691	)			—				—				(3,691	)			—				(3,691	)
Share-based compensation			—				7,603				—				—				—				7,603				—				7,603
Common stock issued to stock discount plan			1				1,438				—				—				—				1,439				—				1,439
Common stock issued upon exercise of stock options			1				1,592				—				—				—				1,593				—				1,593
Common stock issued pursuant to restricted stock and deferred stock unit awards			2				(2	)			—				—				—				—				—				—
Tax payments related to vested deferred stock units			—				(1,634	)			—				—				—				(1,634	)			—				(1,634	)
Tax deficiency related to share-based plans			—				(537	)			—				—				—				(537	)			—				(537	)
Treasury stock purchased			—				—				—				—				(90	)			(90	)			—				(90	)
Balances – October 31, 2009 (as adjusted- Note 16)		$	704			$	323,864			$	979,540			$	33,203			$	(412,626	)		$	924,685			$	—			$	924,685

9. Treasury Stock

     As of October 30, 2010, we had 18,118,350 shares held in treasury stock. The change in our treasury shares for the year ended January 30, 2010 and for the nine months ended October 30, 2010 is provided below:

		Treasury
		Shares
Balance, January 31, 2009			18,104,310
Purchases of treasury stock			7,292
Balance, January 30, 2010			18,111,602
Treasury stock issued to profit sharing plan			(386	)
Purchases of treasury stock			7,134
Balance, October 30, 2010			18,118,350

     In January 2006, the Board of Directors authorized a $100.0 million share repurchase program of our common stock. This authorization superceded any remaining previous authorizations. In August 2007, the Company’s Board of Directors approved a replenishment of the Company’s share repurchase program to $100 million by authorizing $90.3 million to be added to the remaining $9.7 million of the then current program. No shares were purchased under the August 2007 authorization during the first nine months of 2010 or 2009. At October 30, 2010, the remaining balance available under the August 2007 authorization was $44.3 million.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

     During the nine months ended October 30, 2010, 7,134 shares at a cost of $0.1 million were repurchased at an average price per share of $20.24 in a private transaction to satisfy tax withholding obligations arising upon the vesting of certain restricted stock. During the nine months ended October 30, 2009, 7,292 shares at a cost of $0.1 million were repurchased at an average price per share of $12.29 in a private transaction to satisfy tax withholding obligations arising upon the vesting of certain restricted stock.

10. Share-Based Compensation Plans

     We maintain several equity plans under which we may grant stock options, stock appreciation rights, restricted stock, deferred stock units and performance based awards to full-time key employees and non-employee directors. We account for share-based awards in accordance with the FASB standard regarding share-based payments, which requires the compensation cost resulting from all share-based payment transactions be recognized in the financial statements. The amount of compensation cost is measured based on the grant-date fair value of the instrument issued and is recognized over the vesting period. Share-based compensation expense recognized for the three and nine months ended October 30, 2010 was $3.1 million and $8.8 million, respectively. Share-based compensation expense recognized for the three and nine months ended October 31, 2009 was $2.4 million and $7.6 million, respectively.

Stock Options

     The following table summarizes stock option activity for the nine months ended October 30, 2010:

						Weighted-
						Average
						Exercise
		Shares				Price
Outstanding at January 30, 2010			1,642,905			$	20.29
Granted			50,000				18.79
Exercised			(68,627	)			14.44
Expired			(5,374	)			20.89
Outstanding at October 30, 2010			1,618,904			$	20.49
Exercisable at October 30, 2010			756,392			$	18.75

     The weighted-average grant date fair value of the 50,000 stock options granted during the nine months ended October 30, 2010 was $8.27 per share. The following table summarizes the weighted average assumptions used to fair value stock options at the date of grant using the Black-Scholes option pricing model for the nine months ended October 30, 2010. No stock options were granted during the three months ended October 30, 2010.

		For the Nine
		Months Ended
		October 30,
		2010
Risk-free interest rate			1.80	%
Expected lives		5.0 years
Dividend yield			1.65	%
Expected volatility			57.03	%

     The assumptions presented in the table above represent the weighted average of the applicable assumptions used to fair value stock options. Expected volatility is based on historical volatility of our common stock. The expected term represents the period of time the options are expected to be outstanding after their grant date. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the average of the annual dividend divided by the market price of our common stock at the time of declaration.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

     As of October 30, 2010, we have unrecognized compensation expense related to nonvested stock options of approximately $5.5 million which is expected to be recognized over a weighted average period of 2.9 years.

     Restricted Stock and Deferred Stock Units

     The following table summarizes restricted stock and deferred stock unit activity for the nine months ended October 30, 2010:

						Weighted-
						Average
						Grant-Date
		Shares				Fair Value
Nonvested at January 30, 2010			506,133			$	22.35
Granted			335,116				23.97
Vested (1)			(338,545	)			21.26
Forfeited			(10,310	)			23.73
Nonvested at October 30, 2010			492,394			$	24.17

     During the nine months ended October 30, 2010, 20,196 restricted stock shares and 314,920 deferred stock units were granted and 19,360 restricted stock shares and 319,185 deferred stock units vested. No shares of restricted stock were forfeited during the nine months ended October 30, 2010. Total nonvested shares of 492,394 at October 30, 2010 include 69,334 nonvested restricted stock shares.

     As of October 30, 2010, we have unrecognized compensation expense related to nonvested restricted stock shares and deferred stock units of approximately $6.1 million which is expected to be recognized over a weighted average period of 1.2 years.

     Employee Stock Purchase Plan

     The Employee Stock Discount Plan (“ESDP”) allows employees to authorize after-tax payroll deductions to be used for the purchase of up to 2,137,500 shares of our common stock at 85% of the lesser of the fair market value on the first day of the offering period or the fair market value on the last day of the offering period. We make no contributions to this plan but pay all brokerage, service and other costs incurred. The plan, as amended, allows participants to purchase no more than 125 shares during any calendar quarter.

     During the nine months ended October 30, 2010, employees purchased 92,352 shares under the ESDP, which had a weighted-average share price of $16.38 per share. As of October 30, 2010, 1,085,148 shares were reserved for future issuance under the ESDP.

11. Fair Value Measurements

     Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. The hierarchy can be described as follows: Level 1- observable inputs such as quoted prices in active markets; Level 2- inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3- unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

     Effective January 31, 2010, we adopted enhanced disclosure requirements for fair value measurements. There were no transfers into or out of Level 1 and Level 2 during the three and nine months ended October 30, 2010.

     Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

						Fair Value Measurements at Reporting Date Using
						Quoted Prices
						in Active				Significant
						Markets for				Other				Significant
						Identical				Observable				Unobservable
		October 30,				Instruments				Inputs				Inputs
(in thousands)		2010				(Level 1)				(Level 2)				(Level 3)
Assets:
Derivative financial instruments		$	364			$	—			$	364			$	—
Liabilities:
Derivative financial instruments		$	548			$	—			$	548			$	—