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The Men's Wearhouse Inc. Reports Operating Results (10-Q)

December 08, 2011 | About:
10qk

10qk

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The Men's Wearhouse Inc. (MW) filed Quarterly Report for the period ended 2011-10-29.

Mens Wearhouse Inc. has a market cap of $1.66 billion; its shares were traded at around $32.51 with a P/E ratio of 16.1 and P/S ratio of 0.8. The dividend yield of Mens Wearhouse Inc. stocks is 1.4%. Mens Wearhouse Inc. had an annual average earning growth of 5.3% over the past 10 years.

Highlight of Business Operations:

For the three months ended October 29, 2011, the acquired businesses contributed net sales of $53.9 million, gross margin of $17.0 million and net earnings, including the pretax $1.0 million in integration costs, of $0.9 million to the Companys condensed consolidated net earnings attributable to common shareholders. For the nine months ended October 29, 2011, the acquired businesses contributed net sales of $171.1 million, gross margin of $48.5 million and net earnings, including the pretax $2.5 million in integration costs, of $2.1 million to the Companys condensed consolidated net earnings attributable to common shareholders. From the date of acquisition to the period ended October 30, 2010, the acquired businesses contributed net sales of $50.6 million, gross margin of $13.6 million and net earnings, including the pretax

In fiscal 2010, we recognized retail segment pre-tax costs of $3.1 million for the ceased tuxedo rental distribution operations at these four facilities, including $0.9 million for severance payments, $0.7 million for facility remediation costs and $1.5 million for the write-off of fixed assets. As of October 30, 2010, we had recognized retail segment pre-tax cost of $2.0 million of the total $3.1 million recorded in fiscal 2010 for the ceased tuxedo rental distribution operations. For the three and nine months ended October 29, 2011, we recognized retail segment pre-tax costs of $0.2 million and $0.8 million, respectively, related to the ceased tuxedo rental distribution operations primarily for the write-off of fixed assets and facility remediation costs. These charges are included in Selling, general and administrative expenses in our condensed consolidated statement of earnings. Net cash payments of $0.3 million related to the ceased tuxedo rental distribution operations were paid in the nine months ended October 29, 2011. No amounts are included in accrued expenses and other current liabilities at October 29, 2011. We expect to incur additional charges of approximately $20 thousand in connection with the ceased tuxedo rental distribution operations at these four facilities in the fourth quarter of fiscal 2011 for facility remediation costs.

We had revenues of $584.6 million and net earnings attributable to common shareholders of $39.9 million for the quarter ended October 29, 2011, compared to revenues of $550.1 million and net earnings attributable to common shareholders of $25.3 million for the quarter ended October 30, 2010. We had revenues of $1,820.5 million and net earnings attributable to common shareholders of $124.4 million for the nine months ended October 29, 2011, compared to revenues of $1,560.6 million and net earnings attributable to common shareholders of $81.8 million for the nine months ended October 30, 2010. We increased our revenues by $34.5 million or 6.3% and our gross margin by $33.2 million or 14.1% for the third quarter of 2011 as compared to the same prior year period. We increased our revenues by $260.0 million or 16.7% and our gross margin by $127.8 million or 18.4% for the first nine months of 2011 as compared to the same prior year period. Our UK-based acquisitions acquired on August 6, 2010 contributed $3.3 million of the increased revenues and $3.4 million of the increased gross margin for the quarter ended October 29, 2011 and $120.5 million of the increased revenues and $34.9 million of the increased gross margin for the nine months ended October 29, 2011.

In the retail segment, total gross margin as a percentage of related sales increased from 45.4% in the first nine months of 2010 to 47.3% in the first nine months of 2011. On an absolute dollar basis total retail segment gross margin increased $92.1 million or 13.6% from the same prior year period to $771.5 million in the first nine months of 2011. Retail clothing product gross margin increased from 54.8% in the first nine months of 2010 to 55.6% in the first nine months of 2011 due primarily to improved average unit retails at K&G and lower K&G product cost charge-offs in 2011. The tuxedo rental services gross margin increased from 84.4% in the first nine months of 2010 to 86.3% in the first nine

Selling, general and administrative expenses increased to $631.4 million in the first nine months of 2011 from $571.4 million in the first nine months of 2010, an increase of $60.0 million or 10.5%. As a percentage of total net sales, these expenses decreased from 36.6% in the first nine months of 2010 to 34.7% in the first nine months of 2011. The components of this 1.9% net decrease in SG&A expenses as a percentage of total net sales and the related absolute dollar changes were as follows:

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