Men’s Wearhouse Q1 net sales up by 1.1 percent

Total company net sales increased 1.1 percent for the first quarter ended April 28, 2012. Retail segment sales increased 3.1 percent. Q1 2012 GAAP diluted earnings per share were $0.52 compared to per share guidance of $0.53 to $0.54.

This result was driven by retail clothing product sales. Men’s Wearhouse sales also increased due to an increase in both average unit selling prices and units sold per transaction that more than offset a decrease in the average number of transactions per store. K&G sales declined due to lower average unit selling prices that offset increases in both units sold per transaction and average number of transactions per store.

GAAP diluted earnings per share were $0.52 for the quarter. This compares to GAAP diluted earnings per share guidance given March 7, 2012, of $0.53 to $0.54. In first quarter fiscal 2011, GAAP diluted earnings per share were $0.52 and 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 related integration costs.

Tuxedo rental services revenues had U.S. comparable store sales of 8.1 percent driven primarily by an increase in units rented. Corporate apparel segment sales decreased 16.4 percent primarily due to later launch dates for customer new uniform programs in fiscal 2012 as compared to fiscal 2011. Total company gross margin increased 3 percent to $254 million and as a percentage of sales increased 82 basis points. Retail segment total gross margin, as a percentage of related net sales, increased 69 basis points. This increase was primarily attributable to higher product margins driven by higher average unit selling prices in the U.S. and Canada. Corporate apparel segment gross margin, as a percentage of related sales, decreased from 27.8 percent in the first quarter of 2011 to 26.5 percent in the first quarter of 2012 due mainly to the decreased new uniform program sales by its UK-based operations. Total company SG&A expenses increased compared to prior year adjusted SG&A by 5.3 percent to $213.1 million and as a percentage of sales increased 147 basis points.

During the quarter Men’s Wearhouse opened up 29 new stores, three new Moores stores and one new K&G store. But the group also expected to close up to 47 Men’s Wearhouse and Tux stores and two K&G stores. Founded in 1973, Men’s Wearhouse is one of North America’s largest specialty retailers of men’s apparel with 1,162 stores. Additionally, Men’s Wearhouse operates a global corporate apparel and workwear group consisting of Twin Hill in the United States and Dimensions and Alexandra in the UK.