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

December 06, 2012 | About:
10qk

10qk

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The Men's Wearhouse Inc. (MW) filed Quarterly Report for the period ended 2012-10-27.

Men's Wearhouse has a market cap of $1.65 billion; its shares were traded at around $29.12 with a P/E ratio of 13.5 and P/S ratio of 0.7. The dividend yield of Men's Wearhouse stocks is 2.2%. Men's Wearhouse had an annual average earning growth of 9% over the past 10 years.

Highlight of Business Operations:

We had revenues of $631.0 million, gross margin of $290.7 million and net earnings attributable to common shareholders of $48.8 million for the quarter ended October 27, 2012, compared to revenues of $584.6 million, gross margin of $268.2 million and net earnings attributable to common shareholders of $39.9 million for the quarter ended October 29, 2011. We had revenues of $1,879.9 million, gross margin of $865.0 million and net earnings attributable to common shareholders of $135.1 million for the nine months ended October 27, 2012, compared to revenues of $1,820.5 million, gross margin of $824.0 million and net earnings attributable to common shareholders of $124.4 million for the nine months ended October 29, 2011. We increased our revenues by $46.4 million or 7.9%, our gross margin by $22.5 million or 8.4% and our net earnings attributable to common shareholders by $9.0 million or 22.5% for the third quarter of 2012 as compared to the same prior year period. We increased our revenues by $59.3 million or 3.3%, our gross margin by $41.0 million or 5.0% and our net earnings attributable to common shareholders by $10.7 million or 8.6% for the first nine months of 2012 as compared to the same prior year period.

In the retail segment, total gross margin as a percentage of related sales increased from 47.3% in the first nine months of 2011 to 47.8% in the first nine months of 2012. On an absolute dollar basis total retail segment gross margin increased $43.1 million or 5.6% from the same prior year period to $814.6 million in the first nine months of 2012. Retail clothing product gross margin decreased slightly from 55.6% in the first nine months of 2011 to 55.5% in the first nine months of 2012. On an absolute dollar basis retail clothing product margin increased $24.6 million. The tuxedo rental services gross margin increased slightly from 86.3% in the first

nine months of 2011 to 86.4% in the first nine months of 2012 primarily due to a decrease in per unit rental costs in 2012 offset by increased royalty expenses. The gross margin for alteration and other services increased from 25.4% to 25.9% mainly as a result of increased sales at Mens Wearhouse/Mens Wearhouse and Tux stores. Occupancy costs as a percentage of retail sales, which is relatively constant on a per store basis and includes store related rent, common area maintenance, utilities, repairs and maintenance, security, property taxes and depreciation, decreased from 12.6% in the first nine months of 2011 to 12.3% in the first nine months of 2012 mainly due to cost leverage from increased retail sales. On an absolute dollar basis, occupancy costs increased $4.3 million primarily due to higher rent and depreciation expense.

SG&A increased to $660.0 million in the first nine months of 2012 from $631.4 million in the first nine months of 2011, an increase of $28.6 million or 4.5%. As a percentage of total net sales, these expenses increased from 34.7% in the first nine months of 2011 to 35.1% in the first nine months of 2012. The components of this 0.4% net increase in SG&A expenses as a percentage of total net sales and the related absolute dollar changes were as follows:

At October 27, 2012, January 28, 2012 and October 29, 2011, cash and cash equivalents totaled $138.0 million, $125.3 million and $138.5 million, respectively. We had working capital of $588.6 million, $544.1 million and $557.8 million at October 27, 2012, January 28, 2012 and October 29, 2011, respectively. Our primary sources of working capital are cash flows from operations and available borrowings under our Credit Agreement (as defined below). The $44.5 million increase in working capital at October 27, 2012 compared to January 28, 2012 resulted mainly from net earnings adjusted for non-cash charges, increased accounts receivables and increased inventories, which more than offset an increase in accounts payable and purchases of shares of common stock made during the first nine months of 2012.

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