TAILORED BRANDS INC - FORM 8-K - EX-99.1

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8-K - FORM 8-K - TAILORED BRANDS INC	h82878e8vk.htm

Exhibit 99.1


		*News Release*

		Contacts:
For Immediate Release
		Neill Davis, Men’s Wearhouse (281) 776-7000 Ken Dennard, DRG&L (713) 529-6600

MEN’S WEARHOUSE REPORTS
FISCAL 2011 FIRST QUARTER RESULTS

•		*Q1 2011 GAAP diluted earnings per share was $0.52 and adjusted diluted earnings per share was $0.53*

•		*Company provides guidance for second quarter and updated guidance for full year of fiscal 2011*

•		*Conference call at 5:00 pm Eastern today*

HOUSTON — June 8, 2011 — The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the first quarter ended April 30, 2011.


First Quarter Net Sales Summary — Fiscal 2011
										Comparable Store Sales
	U.S. dollars, in millions						Total Net Sales			Change % (c)
	Current Year			Prior Year			Change %			Current Year			Prior Year
Total Company	$	580.4	(a)	$	473.5	(a)		22.6	%
Total Retail Segment	$	520.7		$	469.8			10.8	%
MW		354.7			318.3			11.4	%		10.8	%		2.4	%
K&G		106.7			98.3			8.6	%		9.3	%		- 4.9	%
Moores Canada		53.2			47.4			12.2	%		6.0%	(b)		0.2%	(b)
Corporate Apparel Segment	$	59.7		$	3.7			1,521.1	%


(a)		Due to rounded numbers, total Company may not sum.

(b)		Comparable store sales change is based on the Canadian dollar.

(c)		Does not include ecommerce sales.

GAAP diluted earnings per share were $0.52 for the first quarter ended April 30, 2011. Adjusted diluted earnings per share were $0.53 after excluding $0.7 million ($0.4 million after tax or $0.01 per diluted share outstanding) in acquisition integration expenses. This compares to adjusted diluted earnings per share updated guidance given May 5, 2011 of $0.47 to $0.50 and original guidance given March 9, 2011 of $0.27 to $0.30. In first quarter of 2010, GAAP diluted earnings per share were $0.26.

Page 1

FIRST QUARTER REVIEW

Total Company net sales increased 22.6% for the quarter.

In our retail segment, comparable store sales increased at each of our brands due to increased units per transaction, higher average ticket and, at K&G and Moores, an increase in customer traffic. There was also a 3.9% comparable store sales increase in tuxedo rental services revenues.

Corporate apparel segment net sales increased $56.0 million to $59.7 million for the quarter compared to the same prior year quarter. The increase was primarily due to US$54.0 million in revenues from our acquisitions of Dimensions and Alexandra in the UK on August 6, 2010.

Total gross margin, as a percentage of total net sales, was flat at 42.5%. Occupancy costs as a percent of sales decreased, alteration margin as a percent of sales increased and tuxedo rental margins increased. These increases were offset by a decrease in retail segment clothing margin as a percent of sales, which resulted mainly from increased promotions, and the increased mix of the lower margin corporate apparel segment.

Selling, general and administrative expenses were $203.0 million for the first quarter and increased 13.0% from the prior year’s SG&A of $179.7 million. Excluding $0.7 million in acquisition integration costs, first quarter SG&A expenses were $202.3 million or an increase of 12.6% to the prior year quarter. Adjusted SG&A related to the acquired UK operations resulted in an 8.0% increase. The remaining 4.6% adjusted increase was primarily due to increased payroll related costs and increased expenses associated with increased sales. As a percentage of total net sales, adjusted SG&A decreased 308 basis points from 37.9% to 34.9%.

Operating income was $43.6 million. Excluding $0.7 million in acquisition integration costs, operating income was $44.3 million or 7.6% of total net sales. This compares with the prior year operating income of $21.4 million or 4.5% of total net sales.

The financial results of the combined UK operations, excluding acquisition integration costs, were $0.01 accretive to the Company’s first quarter diluted earnings per share. Integration costs were $0.7 million ($0.4 million after tax or $0.01 per diluted share outstanding).

Total inventories of $521.1 million increased 18.8% from the prior year first quarter of $438.7 million. Excluding inventory from the acquired UK operations, inventories decreased 1.1%.

The Company had no borrowings under its bank credit facility at the end of first quarter fiscal 2011.

During the quarter, the Company repurchased 1.8 million shares for a total of $49.0 million.

Page 2

2011 GUIDANCE

For the fiscal year, GAAP diluted earnings per share is expected to be in a range of $2.00 to $2.08. Adjusted diluted earnings per share are expected to be in a range of $2.04 to $2.12. Adjusted earnings per share exclude acquisition integration expenses of $3.5 million ($2.2 million after tax or $0.04 per diluted share outstanding).

For the second quarter of the fiscal year, GAAP diluted earnings per share is expected to be in a range of $1.01 to $1.04. Adjusted diluted earnings per share are expected to be in a range of $1.02 to $1.05. Adjusted earnings per share exclude acquisition integration expenses of $0.9 million ($0.6 million after tax or $0.01 per diluted share outstanding).

The financial results of the combined UK acquisitions, excluding acquisition integration expenses, are expected to be accretive to the Company’s full year and second quarter diluted earnings per share.


	Guidance	Guidance
	FY 2011	2Q FY 2011
Total Sales Increase	12% to 13% (1)	20% to 21% (1)
Comparable Store Sales Growth (2)
MW	+5% to +7%	+8% to +9%
K&G	+3% to +4%	+2% to +3%
Moores	+2% to +3%	+6% to +7%
Gross Profit Margin	43.05% to 43.25% (3)	46.65% to 46.80% (3)
S G & A (as % of Sales)	36.00% to 36.20% (4)	33.65% to 33.80% (4)
Effective Tax Rate	35.7%	35.9%
Weighted Average Shares Outstanding (millions)	52.0	51.8
GAAP EPS	$2.00 to $2.08	$1.01 to $1.04
Adjusted EPS	$2.04 to $2.12 (4)	$1.02 to $1.05 (4)
Foreign Exchange Conversion (avg.)
US Dollar to GBP	1.60	1.59
US Dollar to Canadian Dollar	1.03	1.03

Footnotes to Guidance:


1.		Includes US$224 million for full year FY 2011 and US$63 million for 2Q FY2011 of sales from acquired operations of Dimensions and Alexandra.

2.		Includes an assumed U.S. comparable store increase in tuxedo rental revenues of 7% to 8% for the full year FY 2011 and a 6% to 7% increase in 2Q FY 2011.

3.		Occupancy costs are expected to be flat for full year FY 2011 and decrease low single digit for 2Q FY 2011.

4.		Excludes acquisition integration costs.

Page 3

CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 p.m. Eastern time on Wednesday, June 8, 2011, Company management will host a conference call and real time webcast to review the first quarter of fiscal 2011 and its outlook for the second quarter and full year of fiscal 2011.

To access the conference call, dial 480-629-9819. To access the live webcast presentation, visit the Investor Relations section of the Company’s website at www.menswearhouse.com. A telephonic replay will be available through June 15, 2011 by calling 303-590-3030 and entering the access code of 4444587#, or a webcast archive will be available free on the website for approximately 90 days.

STORE INFORMATION


	April 30, 2011				May 1, 2010				January 29, 2011
	Number		Sq. Ft.		Number		Sq. Ft.		Number		Sq. Ft.
	of Stores		(000’s)		of Stores		(000’s)		of Stores		(000’s)

Men’s Wearhouse		587		3,340.0		582		3,292.7		585		3,319.0
Men’s Wearhouse and Tux		382		528.4		447		614.1		388		535.7
Moores, Clothing for Men		117		737.4		117		735.5		117		737.8
K&G ^(a)		101		2,392.4		106		2,465.6		102		2,394.1

Total		1,187		6,998.2		1,252		7,107.9		1,192		6,986.6


^(a)		91, 95 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 1,187 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. Additionally, Men’s Wearhouse operates a global corporate apparel and workwear group consisting of TwinHill in the United States and Dimensions and Alexandra 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 January 29, 2011.

For additional information on Men’s Wearhouse, please visit the company’s website at www.menswearhouse.com. The website for K&G is www.kgstores.com. The website for Moores is www.mooresclothing.com. The website for Dimensions is www.dimensions.co.uk, the website for Alexandra is www.alexandra.co.uk and the website for TwinHill is www.twinhill.com.

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		THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES
		CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
		In thousands, except per share data
		(Unaudited)

FOR THE THREE MONTHS ENDED
April 30, 2011 AND May 1, 2010
(In thousands, except per share data)


	Three Months Ended												Variance
				% of						% of									Basis
	2011			Sales			2010			Sales			Dollar			%			Points

Net sales:
Retail clothing product	$	410,261			70.69	%	$	364,690			77.03	%	$	45,571			12.50	%		(6.34	)
Tuxedo rental services		73,141			12.60	%		72,154			15.24	%		987			1.37	%		(2.64	)
Alteration and other services		37,309			6.43	%		32,941			6.96	%		4,368			13.26	%		(0.53	)

Total retail sales		520,711			89.72	%		469,785			99.22	%		50,926			10.84	%		(9.50	)
Corporate apparel clothing product sales		59,673			10.28	%		3,681			0.78	%		55,992			1,521.11	%		9.50

Total net sales		580,384			100.00	%		473,466			100.00	%		106,918			22.58	%		0.00

Total cost of sales		333,751			57.51	%		272,463			57.55	%		61,288			22.49	%		(0.04	)


Gross margin (a):
Retail clothing product		222,888			54.33	%		200,100			54.87	%		22,788			11.39	%		(0.54	)
Tuxedo rental services		63,334			86.59	%		60,828			84.30	%		2,506			4.12	%		2.29
Alteration and other services		11,008			29.50	%		8,877			26.95	%		2,131			24.01	%		2.56
Occupancy costs		(67,171	)		(12.90	%)		(69,691	)		(14.83	%)		2,520			3.62	%		1.93

Total retail gross margin		230,059			44.18	%		200,114			42.60	%		29,945			14.96	%		1.58
Corporate apparel clothing product margin		16,574			27.77	%		889			24.15	%		15,685			1,764.34	%		3.62

Total gross margin		246,633			42.49	%		201,003			42.45	%		45,630			22.70	%		0.04


Selling, general and administrative expenses		202,996			34.98	%		179,650			37.94	%		23,346			13.00	%		(2.97	)

Operating income		43,637			7.52	%		21,353			4.51	%		22,284			104.36	%		3.01

Net interest		(268	)		(0.05	%)		(225	)		(0.05	%)		(43	)		(19.11	%)		0.00

Earnings before income taxes		43,369			7.47	%		21,128			4.46	%		22,241			105.27	%		3.01

Provision for income taxes		16,177			2.79	%		7,566			1.60	%		8,611			113.81	%		1.19


Net earnings including noncontrolling interest		27,192			4.69	%		13,562			2.86	%		13,630			100.50	%		1.82

Net loss attributable to noncontrolling interest		233			0.04	%		—			0.00	%		233			100.00	%		0.04


Net earnings attributable to common shareholders	$	27,425			4.73	%	$	13,562			2.86	%	$	13,863			102.22	%		1.86


Net earnings per diluted common share attributable to common shareholders	$	0.52					$	0.26


Weighted average diluted common shares outstanding:		52,197						52,628


(a)		Gross margin percent of sales is calculated as a percentage of related sales.

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		THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)


	April 30,			May 1,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	145,657		$	219,562
Accounts receivable, net		72,004			24,640
Inventories		521,082			438,671
Other current assets		67,911			67,510

Total current assets		806,654			750,383

Property and equipment, net		329,592			336,771
Tuxedo rental product, net		95,180			101,731
Goodwill		91,021			60,780
Intangible assets, net		38,343			3,225
Other assets		7,642			13,465


Total assets	$	1,368,432		$	1,266,355


LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	153,144		$	99,720
Accrued expenses and other current liabilities		170,847			136,183
Income taxes payable		597			2,826
Current maturities of long-term debt		—			45,780

Total current liabilities		324,588			284,509
Deferred taxes and other liabilities		70,736			62,741


Total liabilities		395,324			347,250


Equity:
Preferred stock		—			—
Common stock		714			707
Capital in excess of par		343,846			329,030
Retained earnings		1,024,168			964,834
Accumulated other comprehensive income		52,793			37,304
Treasury stock, at cost		(461,760	)		(412,770	)


Total equity attributable to common shareholders		959,761			919,105

Noncontrolling interest		13,347			—


Total equity		973,108			919,105


Total liabilities and equity	$	1,368,432		$	1,266,355

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		THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

FOR THE THREE MONTHS ENDED
April 30, 2011 AND May 1, 2010
(In thousands)


	Three Months Ended
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings including noncontrolling interest	$	27,192		$	13,562
Non-cash adjustments to net earnings:
Depreciation and amortization		18,652			18,690
Tuxedo rental product amortization		5,546			6,978
Other		9,823			9,312
Changes in assets and liabilities		17,821			732


Net cash provided by operating activities		79,034			49,274


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(14,284	)		(11,099	)
Proceeds from sales of property and equipment		22			—


Net cash used in investing activities		(14,262	)		(11,099	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		1,539			783
Cash dividends paid		(6,409	)		(4,756	)
Tax payments related to vested deferred stock units		(2,955	)		(2,656	)
Excess tax benefits from share-based plans		691			763
Purchase of treasury stock		(48,999	)		(144	)


Net cash used in financing activities		(56,133	)		(6,010	)


Effect of exchange rate changes		647			1,379


INCREASE IN CASH AND CASH EQUIVALENTS		9,286			33,544

Balance at beginning of period		136,371			186,018

Balance at end of period	$	145,657		$	219,562

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TAILORED BRANDS INC - FORM 8-K - EX-99.1 - June 8, 2011

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