Corporate apparel segment net sales up at Men's Wearhouse
The Men's Wearhouse announced its consolidated financial results for the first quarter ended April 30, 2011.
GAAP diluted earnings per share were $0.52 for the first quarter ended April 30, 2011. Adjusted diluted earnings per share were $0.53 after excluding $0.7 million ($0.4 million after tax or $0.01 per diluted share outstanding) in acquisition integration expenses. This compares to adjusted diluted earnings per share updated guidance given May 5, 2011 of $0.47 to $0.50 and original guidance given March 9, 2011 of $0.27 to $0.30. Infirst quarter of 2010, GAAP diluted earnings per share were $0.26.
First quarter review
Total Company net sales increased 22.6% for the quarter.
In our retail segment, comparable store sales increased at each of our brands due to increased units per transaction, higher average ticket and, at K&G and Moores, an increase in customer traffic. There was also a 3.9% comparable store sales increase in tuxedo rental services revenues.
Corporate apparel segment net sales increased $56.0 million to $59.7 million for the quarter compared to the same prior year quarter. The increase was primarily due to US$54.0 million in revenues from our acquisitions of Dimensions and Alexandra in the UK on August 6, 2010.
Total gross margin, as a percentage of total net sales, was flat at 42.5%. Occupancy costs as a percent of sales decreased, alteration margin as a percent of sales increased and tuxedo rental margins increased. These increases were offset by a decrease in retail segment clothing margin as a percent of sales, which resulted mainly from increased promotions, and the increased mix of the lower margin corporate apparel segment.
Selling, general and administrative expenses were $203.0 million for the first quarter and increased 13.0% from the prior year's SG&A of $179.7 million. Excluding $0.7 million in acquisition integration costs, first quarter SG&A expenses were $202.3 million or an increase of 12.6% to the prior year quarter. Adjusted SG&A related to the acquired UK operations resulted in an 8.0% increase. The remaining 4.6% adjusted increase was primarily due to increased payroll related costs and increased expenses associated with increased sales. As a percentage of total net sales, adjusted SG&A decreased 308 basis points from 37.9% to 34.9%.
Operating income was $43.6 million. Excluding $0.7 million in acquisition integration costs, operating income was $44.3 million or 7.6% of total net sales. This compares with the prior year operating income of $21.4 million or 4.5% of total net sales.
The financial results of the combined UK operations, excluding acquisition integration costs, were $0.01 accretive to the Company's first quarter diluted earnings per share. Integration costs were $0.7 million ($0.4 million after tax or $0.01 per diluted share outstanding).
Total inventories of $521.1 million increased 18.8% from the prior year first quarter of $438.7 million. Excluding inventory from the acquired UK operations, inventories decreased 1.1%.