Men's Wearhouse gross margin slides to 42.77%
Source: Men's Wearhouse Date: 2008-03-17
The Men's Wearhouse announced its consolidated financial results for the fourth quarter and fiscal year ended February 2, 2008.
This year's 13 week fourth quarter operating income was $21.5 million compared to $73.2 million for last year's 14 week quarter and net income was $14.8 million compared to $52.3 million last year.
Diluted earnings per share were $0.28 for the fourth quarter ended February 2, 2008 compared to $0.95 last year. MW Tux (formerly After Hours), after acquisition funding costs, decreased the diluted earnings per share for the fourth quarter by $0.37.
Fiscal year 2007's 52 week operating income was $228.7 million compared to $223.9 million for last year's 53 week period and net income was $147.0 million compared to $148.6 million last year.
Diluted earnings per share were $2.73 for the full year compared to $2.71 last year. MW Tux (formerly After Hours), after acquisition funding costs, increased the diluted earnings per share for fiscal year 2007 by $0.02.
It should be noted that the seasonality of MW Tux (formerly After Hours) revenues is heavily concentrated in April, May and June.
Second quarter, followed by third quarter, is the highest revenue quarter and first and fourth quarters are considered off season.
As a result, MW Tux (formerly After Hours) typically has income in the second and third quarters and losses in the first and fourth quarters.
In the summer of 2008, theCompany expects to close its Canadian based manufacturing facility, operated by its subsidiary, Golden Brand.
The company estimates the pre tax cost to close the facility to be approximately $8.5 million or the equivalent of $0.10 per diluted share outstanding for the fiscal year.
The estimated pre tax cost for first quarter is $5.5 million or the equivalent of $0.06 per diluted share outstanding, for second quarter is $1.3 million or the equivalent of $0.02 per diluted share outstanding and for third quarter is $1.7 million or the equivalent of $0.02 per diluted share outstanding.
For the fiscal year, the Company expects adjusted diluted earnings per share to be $1.90 to $2.10 excluding the Golden Brand closure costs.
Including these costs, diluted earnings per share are expected to be $1.80 to $2.00. This guidance assumes same store sales in the U.S. to decrease in the mid single digit range and in Canada to be flat.
For the first quarter, the Company expects adjusted diluted earnings per share to be $0.20 to $0.24 excluding the Golden Brand closure costs. Including these costs, diluted earnings per share are expected to be $0.14 to $0.18.
This guidance assumes same store sales in the U.S. to decrease in the high single digit range and in Canada to decrease in the low single digit range.
MW Tux (formerly After Hours) was acquired at the beginning of April 2007. Thus February and March, which are considered off season, were not included in first quarter fiscal 2007 results. The February and March diluted earnings per share impact on first quarter is estimated to be dilutive by $0.22.
For the second quarter, the Company expects adjusted diluted earnings per share to be $0.80 to $0.86 excluding the Golden Brand closure costs. Including these costs, diluted earnings per share are expected to be $0.78 to $0.84.
This guidance assumes same store sales in the U.S, including MW Tux (formerly After Hours) stores, to decrease in the mid to high single digit range and in Canada to increase in the low single digit range.
The guidance includes an estimated effective tax rate of approximately 38.3% for the first and second quarters and approximately 37.9% for the full year. The fully diluted shares outstanding are estimated to be 52.1 million.
