Clothing product sales drop at Men's Wearhouse
The Men's Wearhouse announced its consolidated financial results for the fourth quarter and fiscal year ended January 31, 2009.
Diluted earnings per share were $0.03 for the fourth quarter ended January 31, 2009. Adjusted loss per share was $0.06. This excludes a $5.8 million (net of tax) or $0.11 per diluted share outstanding gain from an eminent domain sale of a distribution center and a $1.2 million (net of tax) or $0.02 per diluted share outstanding non-cash fixed asset impairment charge.
Diluted earnings per share were $1.13 for fiscal year 2008. Adjusted diluted earnings per share were $1.17. This excludes a $6.6 million (net of tax) or $0.13 per diluted share outstanding cost to close the Canadian based manufacturing facility operated by the Company's subsidiary, Golden Brand, a $5.8 million (net of tax) or $0.11 per diluted share outstanding gain from an eminent domain sale of a distribution center and a $1.2 million (net of tax) or $0.02 per diluted share outstanding non-cash fixed asset impairment charge.
FOURTH QUARTER REVIEW:
• Total Company sales decreased 11.0% for the quarter.
• Clothing product sales, representing 85.4% of fiscal fourth quarter 2008 total net sales, decreased 12.8% due to decreases in the Company's comparable store sales primarily driven by a reduction in store traffic levels.
• Tuxedo rental sales, representing 7.5% of fiscal fourth quarter 2008 total net sales, increased 3.0%.
• Gross margin before occupancy costs, as a percentage of total net sales, decreased 294 basis points from 56.68% to 53.74%. Decreases in clothing product margins, as a percentage of related sales, of 396 basis points were offset by the impact of the higher margin tuxedo rental revenues that increased from 6.50% to 7.52% as a percentage of total sales.
• Occupancy costs increased, as a percentage of total net sales, by 141 basis points from 13.91% to 15.32% primarily due to the deleveraging effect of reduced comparable store sales.
• In the fourth quarter, the Company realized a pretax gain of $8.8 million from an eminent domain sale of a distribution center and incurred a pretax non-cash fixed asset impairment charge in the amount of $1.8 million. Selling, general, and administrative expenses, excluding these items, decreased 7.1% from the prior year quarter of $207.3 million to $192.6 million due primarily to cost-cutting measures implemented during the quarter.
• Operating loss excluding the $8.8 million gain on the distribution center sale and the $1.8 million impairment charge was $9.6 million or negative 2.0% of total net sales compared to $21.5 million or 4.0% of total net sales for the same period last year.
• The Company realized an income tax benefit for the quarter due to favorable developments on certain outstanding income tax matters and a true up of the tax provision for the full year.
FISCAL 2009 GUIDANCE:
Due primarily to the lack of forward visibility as to macro economic conditions, the Company is implementing modifications to its forward guidance practices beginning with fiscal 2009. The Company will provide specific financial related guidance for the first half of the fiscal year and plans to update that guidance when it reports first quarter earnings. The Company has provided below additional guidance around certain elements which management believes will influence the Company's annual results. Finally, the Company will eliminate its past practice of providing mid quarter updates on earnings per share guidance.