Men`s Wearhouse reports fiscal 2008 Q2 results

Fashion

Men`s Wearhouse reports fiscal 2008 Q2 results

The Men`s Wearhouse announced its consolidated financial results for the second quarter ended August 2, 2008. Diluted earnings per share were $0.63 for the second quarter ended August 2, 2008. Adjusted diluted earnings per share were $0.72 after excluding $4.5 million (net of tax), $0.09 per diluted share outstanding, of closure costs incurred in connection with the Company`s previously announced planned closure of the Canadian based manufacturing facility operated by the Company`s subsidiary, Golden Brand. This compares to adjusted diluted earnings per share guidance given July 9, 2008 of $0.70 to $0.74. SECOND Quarter Highlights: • Total company sales decreased 4.2% for the quarter. • Apparel sales, representing 70.81% of 2008 total net sales, decreased 4.0% primarily due to decreases in the Company`s comparable store sales driven by a reduction in store traffic levels. • Tuxedo rental revenues, representing 23.37% of 2008 total net sales, decreased 5.3%. This decline was primarily driven by reduced tuxedo rental sales at the Company`s stores acquired from After Hours. These declines were partially offset by increases at the Company`s Men`s Wearhouse stores. • Gross margin before occupancy costs, as a percentage of total net sales, decreased 27 basis points from 60.20% to 59.93%. Decreases in clothing product margins, as a percentage of related sales, of 110 basis points were offset by an increase in tuxedo rental services gross margin, as a percentage of related sales, of 302 basis points from 80.66% to 83.68%. • Occupancy costs increased, as a percentage of total net sales, by 154 basis points from 11.99% to 13.53% primarily due to the deleveraging effect of reduced comparable store sales and increased rental rates for new and renewed leases. • Selling, general, and administrative expenses were $198.9 million. Excluding $7.3 million in costs associated with the closing of Golden Brand, SG&A expenses of $191.6 million were essentially flat compared to the prior year quarter and as a percentage of total net sales increased 144 basis points from 33.69% to 35.13%. This increase was primarily due to the deleveraging effect of reduced net sales. • Operating income was $54.2 million. Excluding $7.3 million in costs associated with the closing of Golden Brand, operating income was $61.5 million, or 11.27% of total net sales compared to $82.7 million, or 14.52% of total net sales for the same period last year. • The effective tax rate for the 2008 second quarter was 39.0%. THIRD QUARTER 2008 GUIDANCE On July 11, 2008, the Canadian based manufacturing facility operated by the Company`s subsidiary, Golden Brand, was closed. The Company estimates the pre tax cost to close the facility will be approximately $9.8 million or the equivalent of $0.12 per diluted share outstanding for the fiscal year. The pre tax cost for the first quarter was $0.9 million or the equivalent of $0.01 per diluted share outstanding. The pre tax cost for the second quarter was $7.3 million or the equivalent of $0.09 per diluted share outstanding and the pre tax cost for the third quarter is estimated at $1.6 million or the equivalent of $0.02 per diluted share outstanding.More Men`s Wearhouse News...More Fashion News - United States Of America...12

     Favourite      Print this story  Comments  Submit Press Release