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Clothing product sales drop at Men's Wearhouse
11
Mar '10
The Men's Wearhouse announced its consolidated financial results for the fourth quarter ended January 30, 2010.

Diluted loss per share was $0.36 for the fourth quarter ended January 30, 2010. Adjusted loss per share was $0.11. This excludes a $13.1 million (net of tax) or $0.25 per diluted share non-cash asset impairment charge. This compares to diluted loss per share guidance given December 8, 2009 of $0.15 to $0.19. Prior year fourth quarter GAAP diluted earnings per share were $0.03 and adjusted loss per share was $0.06 excluding $5.8 million (net of tax) or $0.11 per diluted share gain from an asset sale and $1.2 million (net of tax) or $0.02 per diluted share for a non-cash asset impairment charge.

Diluted earnings per share were $0.86 for fiscal year 2009. Adjusted diluted earnings per share were $1.11. This excludes a $13.1 million (net of tax) or $0.25 per diluted share non-cash asset impairment charge.

Fourth Quarter Review

• Total Company sales decreased 4.0% for the quarter.
o Clothing product sales, representing 85.3% of fiscal fourth quarter 2009 total net sales, decreased 4.1% due to decreases in the Company's comparable store sales primarily driven by a reduction in store traffic levels and a lower domestic average ticket.
o Tuxedo rental sales, representing 7.7% of fiscal fourth quarter 2009 total net sales, decreased 1.2%.
• Gross margin before occupancy costs, as a percentage of total net sales, decreased 105 basis points from 53.7% to 52.7%. Clothing product margins, as a percentage of related sales, decreased 127 basis points primarily due to increased promotional activities.
• Occupancy costs increased, as a percentage of total net sales, by 35 basis points from 15.3% to 15.7%. On an absolute dollar basis, occupancy costs decreased 1.9% from $73.0 million in the prior year to $71.6 million.
• In the fourth quarter, the Company incurred a pretax non-cash asset impairment charge related to 157 stores (145 Men's Wearhouse and Tux stores and 12 K&G stores) in the amount of $19.5 million. Selling, general, and administrative expenses, excluding this charge, were $184.3 million in the current year and decreased 4.3% from the prior year's adjusted SG&A of $192.6 million which excludes an $8.8 million pretax gain from an asset sale and a $1.8 million pretax non-cash asset impairment charge. As a percentage of total net sales, adjusted SG&A decreased 10 basis points from 40.4% to 40.3%. Adjusted SG&A excluding advertising decreased 3.8% from the adjusted prior year quarter.
• Operating loss excluding the $19.5 million pretax non-cash asset impairment charge was $15.1 million or negative 3.3% of total net sales compared to adjusted operating loss of $9.6 million or negative 2.0% of total net sales for the same period last year, which excludes an $8.8 million pretax gain from an asset sale and a $1.8 million pretax non-cash asset impairment charge.
• Cash andcash equivalent balances as of the end of the fourth quarter of 2009 were $186.0 million, an increase of $81.5 million over the cash and cash equivalent balances plus amounts held in short-term investments as of the same period last year.

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