TAILORED BRANDS INC - FORM 8-K - EX-99.1 - PRESS RELEASE OF THE MEN'S WEARHOUSE, INC. DATED DECEMBER 6, 2011

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8-K - FORM 8-K - TAILORED BRANDS INC	d265861d8k.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 THIRD QUARTER RESULTS


•		*Q3 2011 GAAP diluted earnings per share was $0.77 and adjusted diluted earnings per share was $0.79 compared to adjusted diluted earnings per share guidance of $0.64 to $0.66*

•		*Q3 2011 adjusted diluted earnings per share increased 39% over prior year adjusted diluted earnings per share of $0.57*

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

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

HOUSTON – December 6, 2011 – The Men’s Wearhouse (NYSE: MW) today announced its consolidated financial results for the third quarter ended October 29, 2011.


Third Quarter Net Sales Summary – Fiscal 2011

	U.S. dollars, in millions				Total Net Sales Change %	Comparable Store Sales Change % (c)

	Current Year		Prior Year			Current Year	Prior Year

Total Company		$ 584.6(a)	$	550.1(a)	6.3%

Total Retail Segment		$ 523.8	$	494.6	5.9%

MW		368.5		349.1	5.6%	5.5%	9.6%

K&G		80.2		78.0	2.7%	1.6%	- 0.2%

Moores Canada		69.0		61.5	12.2%	8.6% (b)	5.6% (b)

Corporate Apparel Segment		$ 60.8	$	55.5	9.5%


Year-To-Date Net Sales Summary – Fiscal 2011

	U.S. dollars, in millions				Total Net Sales Change %	Comparable Store Sales Change % (c)

	Current Year		Prior Year			Current Year	Prior Year

Total Company		$ 1,820.5(a)	$	1,560.6(a)	16.7%

Total Retail Segment		$ 1,630.5	$	1,496.7	8.9%

MW		1,130.2		1,034.8	9.2%	9.0%	4.8%

K&G		279.4		263.9	5.9%	5.7%	- 3.5%

Moores Canada		202.5		180.4	12.2%	6.2% (b)	2.1% (b)

Corporate Apparel Segment		$ 190.0	$	63.8	197.6%

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

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

Page 1

PER SHARE INFORMATION

GAAP diluted earnings per share were $0.77 for the third quarter ended October 29, 2011. Adjusted diluted earnings per share were $0.79 after excluding $1.0 million ($0.7 million after tax or $0.01 per diluted share outstanding) in acquisition related integration costs and $0.7 million ($0.5 million after tax or $0.01 per diluted share outstanding) for non-cash asset impairment charges. This compares to adjusted diluted earnings per share guidance given September 7, 2011 of $0.64 to $0.66. In third quarter fiscal 2010, GAAP diluted earnings per share were $0.47 and adjusted diluted earnings per share were $0.57 after excluding $1.4 million ($1.1 million after tax or $0.02 per diluted share outstanding) in acquisition and acquisition related integration costs, $2.0 million ($1.5 million after tax or $0.03 per diluted share outstanding) in tuxedo distribution closure costs and $3.2 million ($2.4 million after tax or $0.05 per diluted share outstanding) for non-cash asset impairment charges.

GAAP diluted earnings per share were $2.37 for the nine months ended October 29, 2011. Adjusted diluted earnings per share were $2.43 after excluding $2.5 million ($1.6 million after tax or $0.03 per diluted share outstanding) in acquisition related integration costs and $1.7 million ($1.1 million after tax or $0.02 per diluted share outstanding) for non-cash asset impairment charges. For the nine months ended October 30, 2010, GAAP diluted earnings per share were $1.54 and adjusted diluted earnings per share were $1.66 after excluding $4.1 million ($2.7 million after tax or $0.05 per diluted share outstanding) in acquisition and acquisition related integration costs, $2.0 million ($1.5 million after tax or $0.03 per diluted share outstanding) in tuxedo distribution closure costs and $3.4 million ($2.2 million after tax or $0.04 per diluted share outstanding) for non-cash asset impairment charges.

Note: Due to rounded numbers, the adjusted earnings per share may not sum.

THIRD QUARTER HIGHLIGHTS

Total Company net sales increased 6.3% for the quarter.

•

Retail segment sales increased 5.9%.

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This increase was primarily attributable to increased retail clothing product sales driven by increases in average unit selling prices and units sold per transaction offsetting fewer transactions per store.

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Tuxedo rental services revenues had U.S. comparable store sales of 1.9% driven by an increase in average rental price.

•

Corporate apparel segment sales increased 9.5% primarily due to one additional week in the current year quarter of U.K. operations acquired on August 6, 2010 and increased catalog and internet sales at our U.K. operations and increased catalog sales at our U.S. operations.

Page 2

Total Company gross margin increased 14.1% to $268.2 million and as a percentage of sales, increased 315 basis points.

•

Retail segment total gross margin, as a percentage of related net sales, increased 324 basis points. This increase was primarily attributable to higher product margins driven by higher average net selling prices per unit at all brands and lower K&G product cost charge-offs.

•

Corporate apparel segment gross margin, as a percentage of related sales, increased from 26.5% in the third quarter of 2010 to 29.4% in the third quarter of 2011 due mainly to an improved mix of higher margin UK customers in the 2011 results, partially offset by higher Twin Hill product costs.

Total Company adjusted SG&A expenses increased 6.4% to $206.4 million* and as a percentage of sales increased 5 basis points.

•

The Company’s corporate apparel segment drove 1.7% of the quarter over quarter increase and the balance, 4.7%, was related to payroll related costs and increased expenses associated with increased sales in the Company’s retail segment.

Adjusted operating income increased 50.4% to $61.7 million* and as a percentage of sales, increased 310 basis points.

•

The financial results of the U.K. operations, excluding acquisition integration costs, were $0.03 accretive to the Company’s third quarter diluted earnings per share. Integration costs were $1.0 million ($0.7 million after tax or $0.01 per diluted share outstanding).

Total inventories increased 21.1% primarily to support increased retail sales and planned promotions in the fourth quarter as well as replenish comparatively oversold levels in the prior year as we embarked on a more aggressive promotional cadence.

The Company repurchased 500,000 shares of its common stock during the third quarter at an average cost of $29.98 per share.

Total cash and cash equivalents at quarter end were $138.5 million.

* Adjusted SG&A and adjusted operating income for third quarter 2011 excludes $1.0 million in acquisition related integration costs and $0.7 million for non cash asset impairment charges. Adjusted SG&A and adjusted operating income for third quarter 2010 excludes $1.4 million in acquisition and acquisition related integration costs, $2.0 million in tuxedo distribution closure costs and $3.2 million in non cash asset impairment charges.

Page 3

2011 GUIDANCE

For the fiscal year, GAAP diluted earnings per share is expected to be in a range of $2.21 to $2.24. Adjusted diluted earnings per share are expected to be in a range of $2.28 to $2.31. Adjusted earnings per share exclude acquisition related integration costs of $4.0 million ($2.6 million after tax or $0.05 per diluted share outstanding) and impairment charges of $1.7 million ($1.1 million after tax or $0.02 per diluted share outstanding). Both GAAP and adjusted earnings per share reflect the dilutive effect of participating securities which approximates $0.03 for the full year.

Estimated fourth quarter GAAP and adjusted diluted loss per share include a $0.02 per share negative impact from previous guidance due to the shifting of certain costs into the fourth quarter, which favorably impacted the third quarter, and severance costs due to a reorganization in the Company’s technology workgroup.

For the fourth quarter of the fiscal year, GAAP diluted loss per share is expected to be in a range of ($0.17) to ($0.14). Adjusted diluted loss per share is expected to be in a range of ($0.15) to ($0.12). Adjusted earnings per share exclude acquisition related integration costs of $1.5 million ($1.0 million after tax or $0.02 per diluted share outstanding). Neither GAAP nor adjusted loss per share have an impact from the dilutive effect of participating securities.

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


	Guidance FY 2011	Guidance 4Q FY 2011

Total Sales Increase	13.3% to 13.4% (1)	3.5% to 4.0% (1)

Comparable Store Sales Growth (2)

MW	+7% to +8%	+5% to +6%
K&G	+3% to +4%	-2% to flat
Moores	+5% to +6%	+3 to +4%
Gross Margin	43.70% to 43.75% (3)	38.65% to 38.85% (3)
S G & A (as % of Sales)	35.95% to 36.00% (4)	40.75% to 40.95% (4)
Effective Tax Rate	34.6%	43.0%
Weighted Average Shares Outstanding (millions)	51.7	51.4
Foreign Exchange Conversion (avg.)

US Dollar to GBP	1.62	1.63
US Dollar to Canadian Dollar	1.01	0.98

Footnotes to Guidance:

Includes US$222 million for full year FY 2011 and US$51 million for 4Q FY 2011 of sales from acquired operations of Dimensions and Alexandra.

Includes an assumed U.S. comparable store increase in tuxedo rental revenues of 4% to 5% for the full year FY 2011 and a 14% to 15% increase in 4Q FY 2011.

Occupancy costs are expected to be flat to a 1% decrease for full year FY 2011 and 1% to 2% increase for 4Q FY 2011.

Excludes acquisition related integration costs and impairment charges.

Page 4

CONFERENCE CALL AND WEBCAST INFORMATION

At 5:00 p.m. Eastern time on Tuesday, December 6, 2011, Company management will host a conference call and real time webcast to review the third quarter of fiscal 2011 and its outlook for the fourth quarter and full year of fiscal 2011.

To access the conference call, dial 480-629-9818. 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, 2011 by calling 303-590-3030 and entering the access code of 4488091#, or a webcast archive will be available free on the website for approximately 90 days.

STORE INFORMATION


	October 29, 2011				October 30, 2010				January 29, 2011

	Number of Stores		Sq. Ft. (000’s)		Number of Stores		Sq. Ft. (000’s)		Number of Stores		Sq. Ft. (000’s)

Men’s Wearhouse		597		3,399.6		586		3,319.3		585		3,319.0

Men’s Wearhouse and Tux		361		503.7		408		561.0		388		535.7

Moores, Clothing for Men		117		741.9		117		737.1		117		737.8

K&G ^(a⁾		100		2,375.4		102		2,391.8		102		2,394.1

Total		1,175		7,020.6		1,213		7,009.2		1,192		6,986.6

⁽^a⁾	92, 91 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 1,175 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. 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 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 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.dimensions.co.uk, www.alexandra.co.uk and www.twinhill.com.

Page 5

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

FOR THE THREE MONTHS ENDED

October 29, 2011 AND October 30, 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	$	377,307		64.54%	$	350,250		63.67%	$	27,057		7.73%		0.87
Tuxedo rental services		112,005		19.16%		111,297		20.23%		708		0.64%		(1.07)
Alteration and other services		34,480		5.90%		33,022		6.00%		1,458		4.42%		(0.10)

Total retail sales		523,792		89.60%		494,569		89.90%		29,223		5.91%		(0.31)
Corporate apparel clothing product sales		60,810		10.40%		55,534		10.10%		5,276		9.50%		0.31

Total net sales		584,602		100.00%		550,103		100.00%		34,499		6.27%		0.00

Total cost of sales		316,433		54.13%		315,104		57.28%		1,329		0.42%		(3.15)

Gross margin (a):
Retail clothing product		215,638		57.15%		187,019		53.40%		28,619		15.30%		3.76
Tuxedo rental services		96,244		85.93%		93,813		84.29%		2,431		2.59%		1.64
Alteration and other services		7,811		22.65%		8,424		25.51%		(613)		(7.28%)		(2.86)
Occupancy costs		(69,425)		(13.25%)		(68,978)		(13.95%)		(447)		(0.65%)		0.69

Total retail gross margin		250,268		47.78%		220,278		44.54%		29,990		13.61%		3.24
Corporate apparel clothing product margin		17,901		29.44%		14,721		26.51%		3,180		21.60%		2.93

Total gross margin		268,169		45.87%		234,999		42.72%		33,170		14.11%		3.15

Selling, general and administrative expenses		208,147		35.60%		200,588		36.46%		7,559		3.77%		(0.86)


Operating income		60,022		10.27%		34,411		6.26%		25,611		74.43%		4.01

Net interest		(284)		(0.05%)		(274)		(0.05%)		(10)		3.65%		0.00


Earnings before income taxes		59,738		10.22%		34,137		6.21%		25,601		74.99%		4.01

Provision for income taxes		19,836		3.39%		8,789		1.60%		11,047		125.69%		1.80


Net earnings including noncontrolling interest		39,902		6.83%		25,348		4.61%		14,554		57.42%		2.22

Net earnings attributable to noncontrolling interest		(25)		0.00%		(89)		(0.02%)		64		(71.91%)		0.01


Net earnings attributable to common shareholders	$	39,877		6.82%	$	25,259		4.59%	$	14,618		57.87%		2.23


Net earnings per diluted common share attributable to common shareholders	$	0.77			$	0.47


Weighted average diluted common shares outstanding:		51,339				52,895

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

Page 6

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

FOR THE NINE MONTHS ENDED

October 29, 2011 AND October 30, 2010

(In thousands, except per share data)


	Nine Months Ended								Variance

	2011		% of Sales		2010		% of Sales		Dollar		%		Basis Points


Net sales:
Retail clothing product		$1,189,357		65.33%		$ 1,072,539		68.73%		$116,818		10.89%		(3.40)
Tuxedo rental services		333,413		18.31%		325,913		20.88%		7,500		2.30%		(2.57)
Alteration and other services		107,767		5.92%		98,262		6.30%		9,505		9.67%		(0.38)

Total retail sales		1,630,537		89.56%		1,496,714		95.91%		133,823		8.94%		(6.34)
Corporate apparel clothing product sales		189,978		10.44%		63,844		4.09%		126,134		197.57%		6.34

Total net sales		1,820,515		100.00%		1,560,558		100.00%		259,957		16.66%		0.00

Total cost of sales		996,468		54.74%		864,284		55.38%		132,184		15.29%		(0.65)

Gross margin (a):
Retail clothing product		661,419		55.61%		587,626		54.79%		73,793		12.56%		0.82
Tuxedo rental services		287,683		86.28%		275,067		84.40%		12,616		4.59%		1.89
Alteration and other services		27,415		25.44%		25,154		25.60%		2,261		8.99%		(0.16)
Occupancy costs		(205,006)		(12.57%)		(208,472)		(13.93%)		3,466		1.66%		1.36

Total retail gross margin		771,511		47.32%		679,375		45.39%		92,136		13.56%		1.93
Corporate apparel clothing product margin		52,536		27.65%		16,899		26.47%		35,637		210.88%		1.18

Total gross margin		824,047		45.26%		696,274		44.62%		127,773		18.35%		0.65

Selling, general and administrative expenses		631,370		34.68%		571,406		36.62%		59,964		10.49%		(1.93)


Operating income		192,677		10.58%		124,868		8.00%		67,809		54.30%		2.58

Net interest		(781)		(0.04%)		(774)		(0.05%)		(7)		0.90%		(0.01)


Earnings before income taxes		191,896		10.54%		124,094		7.95%		67,802		54.64%		2.59

Provision for income taxes		67,532		3.71%		42,222		2.71%		25,310		59.95%		1.00


Net earnings including noncontrolling interest		124,364		6.83%		81,872		5.25%		42,492		51.90%		1.58

Net (earnings) loss attributable to noncontrolling interest		16		0.00%		(89)		(0.01%)		105		(117.98%)		0.01


Net earnings attributable to common shareholders		$ 124,380		6.83%		$ 81,783		5.24%		$ 42,597		52.09%		1.59


Net earnings per diluted common share attributable to common shareholders		$ 2.37				$ 1.54


Weighted average diluted common shares outstanding:		51,776				52,776

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

Page 7

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	October 29, 2011		October 30, 2010
ASSETS

Current assets:
Cash and cash equivalents		$ 138,545		$ 197,843
Accounts receivable, net		66,094		65,069
Inventories		616,758		509,422
Other current assets		61,088		62,830


Total current assets		882,485		835,164
Property and equipment, net		348,785		333,007
Tuxedo rental product, net		85,876		86,121
Goodwill		88,707		90,580
Intangible assets, net		35,378		38,678
Other assets		3,579		21,831


Total assets		$1,444,810		$1,405,381


LIABILITIES AND EQUITY

Current liabilities:
Accounts payable		$ 155,610		$ 145,138
Accrued expenses and other current liabilities		146,391		130,550
Income taxes payable		22,727		12,294
Current maturities of long-term debt		-		45,584


Total current liabilities		324,728		333,566

Deferred taxes and other liabilities		76,429		72,664


Total liabilities		401,157		406,230


Equity:
Preferred stock		-		-
Common stock		717		709
Capital in excess of par		356,414		336,942
Retained earnings		1,108,662		1,023,467
Accumulated other comprehensive income		41,504		37,651
Treasury stock, at cost		(476,749)		(412,761)


Total equity attributable to common shareholders		1,030,548		986,008

Noncontrolling interest		13,105		13,143


Total equity		1,043,653		999,151


Total liabilities and equity		$1,444,810		$1,405,381

Page 8

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

FOR THE NINE MONTHS ENDED

October 29, 2011 AND October 30, 2010

(In thousands)


	Nine Months Ended
	2011		2010

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings including noncontrolling interest	$	124,364	$	81,872
Non-cash adjustments to net earnings:
Depreciation and amortization		56,572		57,210
Tuxedo rental product amortization		25,923		31,732
Other		26,164		11,284
Changes in assets and liabilities		(85,477)		(16,216)


Net cash provided by operating activities		147,546		165,882


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(66,960)		(43,835)
Acquisitions of businesses, net of cash		-		(97,786)
Proceeds from sales of property and equipment		59		76


Net cash used in investing activities		(66,901)		(141,545)


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		5,995		2,503
Cash dividends paid		(18,880)		(14,318)
Tax payments related to vested deferred stock units		(2,955)		(2,748)
Excess tax benefits from share-based plans		1,592		952
Purchase of treasury stock		(63,988)		(144)


Net cash used in financing activities		(78,236)		(13,755)


Effect of exchange rate changes		(235)		1,243


INCREASE IN CASH AND CASH EQUIVALENTS		2,174		11,825

Balance at beginning of period		136,371		186,018

Balance at end of period	$	138,545	$	197,843

Page 9

TAILORED BRANDS INC - FORM 8-K - EX-99.1 - PRESS RELEASE OF THE MEN'S WEARHOUSE, INC. DATED DECEMBER 6, 2011 - December 6, 2011

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