Form 8-K MENS WEARHOUSE INC For: Mar 11

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 11, 2015

The Men’s Wearhouse, Inc.

(Exact name of registrant as specified in its charter)

281-776-7000

(Registrant’s telephone number,
including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On March 11, 2015, The Men’s Wearhouse, Inc. (the “Company”) issued a press release reporting its earnings results for its fourth quarter and fiscal year ended January 31, 2015. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 and Exhibit 99.1 attached hereto is intended to be furnished under Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is included in this Form 8-K.

99.1                           Press Release of the Company dated March 11, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 99.1

MEN’S WEARHOUSE REPORTS FISCAL 2014 RESULTS

·                  Legacy business continued strong performance

·                  Integration synergy run-rate ahead of schedule

·                  Company increases fiscal year 2017 EPS guidance to include K&G

·                  Conference call scheduled for Thursday, March 12th at 9:00 a.m. Eastern time

FREMONT, CA — March 11, 2015 — The Men’s Wearhouse (NYSE: MW) today announced consolidated financial results for the fiscal fourth quarter and year ended January 31, 2015.

GAAP loss per share for fiscal fourth quarter 2014 was $0.75 and adjusted loss per share was $0.03 excluding non-operating items(1).

GAAP loss per share for fiscal year 2014 was $0.01 and adjusted EPS was $2.58 excluding non-operating items(1).  Results for Jos. A. Bank are included in our financial statements beginning June 18, 2014, the date of the closing of the acquisition.

Doug Ewert, Men’s Wearhouse chief executive officer, commented, “We continue to be pleased with the robust earnings performance of our legacy brands.  Fueling this performance in the fourth quarter are comparable sales increases of 6.8% at Men’s Wearhouse, 8.6% at Moores and 6.8% at K&G.  And while Jos. A. Bank’s comparable sales were negative 6.6%, they were above our expectations.”

Ewert added, “We are extremely proud of the work done to date to incorporate Jos. A. Bank.  We have made significant progress on integrating Jos. A. Bank into the infrastructure of Men’s Wearhouse and have developed a robust process around synergy identification and realization.  In the nine months since the acquisition, Jos. A. Bank has transitioned many of the back office functions, began store training programs, began the work to instill its employees with the Men’s Wearhouse culture, and launched tuxedo rental in all its Jos. A. Bank locations.  All of this progress was made while exceeding our initial synergy run-rate target of $15 million as we ended the year with run-rate synergies of $35 million.

“Fiscal year 2015 will be the year of strategic transition for Jos. A. Bank as we work on unlocking customer facing opportunities.  Much of this work lies in systems conversions which will be completed in the second half of 2015.  As such, we are looking forward to the growth in sales and gross margins that we anticipate achieving in late 2015 and into 2016.

“We continue to be confident in our 2017 EPS guidance which has now been increased to include K&G. We expect profits to accelerate in 2016 with rebounding sales after three consecutive years of negative comps at Jos. A. Bank, realized cost synergies and modest growth in the legacy business. With the

(1) Adjusted information is non-GAAP financial information provided to enhance the user’s overall understanding of the Company’s current financial performance.  Reconciliations of adjusted financial information to GAAP results are included in the tables at the end of this release.

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stable platform our legacy brands provide, we are able to focus on this transitional year for Jos. A. Bank as we complete the transition and integration of all the key areas during the year,” concluded Ewert.

FOURTH QUARTER AND FISCAL YEAR SALES REVIEW

The tables that follow are a summary of net sales for fiscal 2014 fourth quarter and full year ended January 31, 2015.  The dollars shown are U.S. dollars in millions and due to rounded numbers may not sum.  The Moores comparable sales change is based on the Canadian dollar.  The comparable sales shown below for Jos. A. Bank are a comparison to the full periods, not a comparison of the acquisition period since June 18, 2014. Comparable sales exclude the net sales of a store for any month of one period if the store was not owned or open throughout the same month of the prior period and include e-commerce net sales.

Fourth Quarter Net Sales Summary — Fiscal 2014

Full Year Net Sales Summary — Fiscal 2014

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Net sales at our largest brand, Men’s Wearhouse, which represented 41% of total fourth quarter sales, were up 8.4% from last year’s fourth quarter and comparable sales increased 6.8%.  On a comparable basis, increases in clothing product average unit retails (or the net selling price per unit) and average transactions per store more than offset a decrease in units sold per transaction. The higher margin tuxedo rental revenues comparable sales increased 5.7% in the fourth quarter of 2014.

Jos. A. Bank was 36% of the Company’s total fourth quarter sales.  Comparable sales for the fourth quarter decreased 6.6% with decreases in clothing product average unit retails and average transactions per store offset somewhat by an increase in units sold per transaction.  Moores, our Canadian retail brand, was 6% of the total fourth quarter sales and had a comparable sales increase of 8.6% due to an increase in clothing product average unit retails that more than offset a decrease in average transactions per store.  However, net sales for Moores only increased 0.8% due to an unfavorable change in the currency translation rate.  K&G was 9% of the Company’s total fourth quarter sales with a comparable sales increase of 6.8% due to an increase in average transactions per store which more than offset a decrease in average unit retails.  The Corporate Apparel segment, which represented 7% of total fourth quarter sales, had a sales decrease of 1.4%.

FISCAL FOURTH QUARTER CONSOLIDATED RESULTS REVIEW

Sales

Total net sales increased 65.6%, or $367.8 million, to $928.4 million from $560.6 million.

Retail segment sales for the quarter increased by 74.1%, or $368.7 million, due to $337.0 million in sales at Jos. A. Bank and an increase in comparable sales at all other retail brands.

Corporate apparel sales decreased by 1.4%, or $0.9 million.

Gross Margin

Total GAAP gross margin was $347.5 million.  Adjusted consolidated gross margin of $363.3 million increased $154.5 million or 74.0% compared to the prior year quarter.  The total adjusted gross margin rate increased 188 basis points primarily due to increased margin rates in all of our legacy retail brands.

Adjusted retail segment gross margin increased $155.5 million, or 81.6%.  The adjusted retail segment gross margin rate increased 164 basis points including Jos. A. Bank and increased 158 basis points excluding Jos. A. Bank.

Corporate apparel gross margin decreased $1.0 million, or 5.5%, and decreased 122 basis points.

Advertising

Advertising expenses increased $26.7 million to $59.2 million, an increase of 82.1%, or 58 basis points, compared to the prior quarter primarily due to Jos. A. Bank advertising expenses.

SG&A

GAAP SG&A expenses increased $104.2 million, including the $42.6 million arbitration settlement, to $330.3 million, an increase of 46.1% but a decrease of 475 basis points.  Adjusted SG&A expenses were 687 basis points favorable to the prior year with the leverage of Jos. A. Bank SG&A primarily achieved from the higher mix of retail clothing sales in the fourth quarter.  Additionally, all legacy retail brands had favorable basis point decreases.  On an absolute dollar basis, adjusted SG&A increased by $72.1 million, or 34.8%, primarily due to the addition of Jos. A. Bank SG&A and payroll related costs at Men’s Wearhouse.

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Operating Income/Loss

GAAP operating loss was $42.0 million compared to GAAP operating loss of $49.7 million last year.  Adjusted operating income was $24.9 million, an increase of $55.7 million, or 180.9%, over the prior year adjusted operating loss of $30.8 million.

Interest and Taxes

Net interest expense for the fourth quarter was $26.5 million.

The effective tax rate for the fourth quarter was 47.5%.  Excluding the impact of acquisition and integration costs, the adjusted effective tax rate was 19.4%.  The 19.4% rate is a benefit as the fourth quarter is a loss.

Net Loss

GAAP net loss was $35.9 million compared to GAAP net loss of $30.4 million last year.  GAAP loss per share was $0.75 compared to $0.64 in the prior year quarter.  Adjusted net loss was $1.3 million, or $0.03 adjusted loss per share, compared to adjusted net loss of $17.9 million, or $0.38 adjusted loss per share last year.

JOS. A. BANK STANDALONE FISCAL FOURTH QUARTER HIGHLIGHTS(2)

Total sales decreased 5.4% to $337.0 million from prior year fourth quarter.  Total clothing margin excluding occupancy costs decreased 165 basis points to 51.6%.

Occupancy costs increased from $35.7 million in the prior year, or 10.0% of total sales, to $37.1 million, or 11.0% of total sales in the current period primarily due to deleveraging caused by the decrease in Jos. A. Bank comparable sales and the impact of new stores.

FISCAL YEAR RESULTS REVIEW

Sales

Total net sales increased 31.5%, or $779.3 million, to $3,252.5 million, up from $2,473.2 million.

Year-to-date retail segment sales increased by 34.5%, or $768.8 million, due to $684.0 million in sales at Jos. A. Bank since the closing of the acquisition and an increase in comparable sales at all other retail brands.

Corporate apparel sales increased by 4.3%, or $10.6 million.

Gross Margin

Total GAAP gross margin was $1,358.6 million.  Adjusted consolidated gross margin of $1,401.9 million was an increase of $312.9 million, or 28.7%, compared to the prior year.  The total adjusted gross margin rate decreased 93 basis points primarily due to lower margins at Jos. A. Bank.

Adjusted retail segment gross margin increased $309.7 million, or 30.5%.  The adjusted retail segment gross margin rate decreased 137 basis points including Jos. A. Bank and increased 49 basis points excluding Jos. A. Bank.

Corporate apparel gross margin increased $3.2 million, or 4.4%, and increased 4 basis points.

(2) Based on adjusted information provided to enhance the user’s overall understanding of Jos. A. Bank’s current financial performance and includes reclassifications to conform Jos. A. Bank’s historical results with the Company’s current external reporting presentation.  A reconciliation of the Jos. A. Bank selected metrics is included in the table at the end of this release.

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Advertising

Advertising expenses increased $67.2 million to $168.3 million, an increase of 66.5% or 109 basis points, primarily due to the Jos. A. Bank advertising expenses and the brand advertising associated with the rollout of Joseph Abboud.

SG&A

GAAP SG&A expenses increased $268.3 million to $1,117.1 million, an increase of 31.6% and 3 basis points.  Adjusted SG&A expenses were 312 basis points favorable to the prior year.  On an absolute dollar basis adjusted SG&A increased by $156.6 million, or 19.1%, primarily due to the addition of Jos. A. Bank SG&A.

Operating Income

GAAP operating income was $73.2 million compared to GAAP operating income of $129.6 million last year.  Adjusted operating income was $257.6 million, an increase of $89.1 million, or 52.9%, over the prior year adjusted operating income of $168.5 million.

Interest and Taxes

Net interest expense for the year was $65.7 million.

The effective tax rate for the year was 101.8%.  Excluding the impact of non-deductible transaction costs, the adjusted effective tax rate was 34.8%.

Net Earnings/Loss

GAAP net loss was $0.4 million compared to GAAP net earnings of $83.8 million last year.  GAAP loss per share was $0.01 compared to a GAAP diluted earnings of $1.70 last year.  Adjusted net earnings were $124.8 million, or $2.58 adjusted diluted earnings per share, compared to adjusted net earnings of $109.3 million, or $2.21 adjusted diluted earnings per share last year.

BALANCE SHEET

In connection with the acquisition of Jos. A. Bank, debt at the end of the fourth quarter was approximately $1.7 billion.

Inventories increased $338.9 million to $938.3 million from $599.5 million due primarily to Jos. A. Bank and inventory related to Joseph Abboud.  The remaining increase was primarily driven by new store openings at Men’s Wearhouse.

Capital expenditures for the fiscal year 2014 were $96.4 million compared to $108.2 million in the prior year.

HISTORICAL CONSOLIDATED BASELINES OF OPERATING RESULTS

We are providing historical baselines of operating results for fiscal year 2014.  These baselines include Jos. A. Bank operations for the full year and exclude items we believe are not indicative of our core operating results as well as certain items related to the acquisition of Jos. A. Bank.  We plan to evaluate future results against this historical baseline.

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Historical Consolidated Baseline for Fiscal Year 2014 by Quarter (1)

(1) See Use of Non-GAAP Financial Measures for reconciliation to GAAP.

FINANCIAL GUIDANCE

The Company has increased its 2017 guidance to include K&G operations and now expects adjusted EPS to be in the range of $5.75 to $6.25.

For fiscal year 2015, the Company expects adjusted diluted earnings per share in a range of $2.70 to $2.90, an increase of 13.9% to 22.4% over the prior year historical baseline diluted earnings per share of $2.37.  The historical baseline diluted earnings per share is calculated using adjusted weighted average diluted shares of 48.2 million, adjusted tax rate of 34.8% and the expected fiscal year 2015 net interest expense of approximately $105 million.

The Company expects Jos. A. Bank comparable sales to continue to be down throughout the first half of the year with improvement in the second half and gross margin to increase for the year but follow a similar pattern to sales.

CALL AND WEBCAST INFORMATION

At 9:00 a.m. Eastern time on Thursday, March 12, 2015, management will host a conference call and real time webcast to discuss fiscal 2014 fourth quarter and full year results.

To access the conference call, dial 412-902-0030.  To access the live webcast presentation, visit the Investor Relations section of the Company’s website at http://ir.menswearhouse.com. A telephonic replay will be available through March 19, 2015 by calling 201-612-7415 and entering the access code of 13602155#, or a webcast archive will be available free on the website for approximately 90 days.

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STORE INFORMATION

(a)  Excludes 15 franchise stores.

(b)  83 and 85 stores, respectively, offering women’s apparel.

Founded in 1973, Men’s Wearhouse is one of North America’s largest specialty retailers of men’s apparel with 1,758 stores.  The Men’s Wearhouse, Jos. A. Bank, Moores and K&G stores carry a full selection of suits, sport coats, furnishings and accessories in exclusive and non-exclusive merchandise brands and Men’s Wearhouse and Tux stores carry a limited selection.  Most K&G stores carry a full selection of women’s apparel.  Tuxedo rentals are available in the Men’s Wearhouse, Jos. A. Bank, Moores and Men’s Wearhouse and Tux stores.  Additionally, Men’s Wearhouse operates a global corporate apparel and workwear group consisting of Twin Hill in the United States and Dimensions, Alexandra and Yaffy in the United Kingdom.

This press release contains forward-looking information.  The forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not guarantees of future performance and a variety of factors could cause actual results to differ materially from the anticipated or expected results expressed in or suggested by these forward-looking statements.  These forward-looking statements may be significantly impacted by various factors, including, but not limited to: actions by governmental entities, domestic and international economic activity and inflation, success, or lack thereof, in executing our internal operating plans and new store and new market expansion plans, including successful integration of acquisitions, including Jos. A. Bank, performance issues with key suppliers, disruption in buying trends due to homeland security concerns, severe weather, foreign currency fluctuations, government export and import policies, aggressive advertising or marketing activities of competitors, and legal proceedings. Future results will also be dependent upon our ability to continue to identify and complete successful expansions and penetrations into existing and new markets and our ability to integrate such expansions with our existing operations.

The forward-looking statements in this press release speak only as of the date hereof. Except for the ongoing obligations of Men’s Wearhouse to disclose material information under the federal securities laws, Men’s Wearhouse undertakes no obligation to revise or update publicly any forward-looking statement, except as required by law.  Other factors that may impact the forward-looking statements are described in Men’s Wearhouse’s annual report on Form 10-K for the fiscal year ended February 1, 2014 and quarterly reports on Form 10-Q.  For additional information on Men’s Wearhouse, please visit the Company’s websites at www.menswearhouse.com, www.josbank.com, www.josephabboud.com, www.mooresclothing.com, www.kgstores.com, www.twinhill.com, www.dimensions.co.uk and www.alexandra.co.uk.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

(Unaudited)

For the Three Months Ended January 31, 2015 and February 1, 2014

(In thousands, except per share data)

(a)  Gross margin percent of sales is calculated as a percentage of related sales.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

(Unaudited)

For the Twelve Months Ended January 31, 2015 and February 1, 2014

(In thousands, except per share data)