The Men's Wearhouse Management Discusses Q2 2012 Results - Earnings Call Transcript

The Men's Wearhouse (MW)

Q2 2012 Earnings Call

September 06, 2012 9:00 am ET

Executives

Ken Dennard - Founder and Managing Partner

George A. Zimmer - Co-Founder and Executive Chairman

Diana M. Wilson - Interim Chief Financial Officer, Executive Vice President and Treasurer

Douglas S. Ewert - Chief Executive Officer, President and Director

Analysts

Brian J. Tunick - JP Morgan Chase & Co, Research Division

Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division

Margaret B. Whitfield - Sterne Agee & Leach Inc., Research Division

Janet Kloppenburg

John D. Kernan - Cowen and Company, LLC, Research Division

David M. Mann - Johnson Rice & Company, L.L.C., Research Division

Joseph Altobello - Oppenheimer & Co. Inc., Research Division

Betty Y. Chen - Wedbush Securities Inc., Research Division

Susan R. Sansbury - Miller Tabak + Co., LLC, Research Division

Bruce M. Zessar - Advisory Research Holdings, Inc.

Presentation

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Men's Wearhouse Second Quarter Earnings Conference Call. [Operator Instructions] This conference is being recorded today, September 6, 2012. I would now like to turn the conference over to Ken Dennard of DRG&L. Please go ahead, sir.

Ken Dennard

Thank you, Erin, and good morning, everyone. We appreciate you joining us early here for the Men's Wearhouse conference call to review 2012 second quarter results and the company's outlook. We'd also like to welcome our Internet participants listening to the call, as it is being obviously webcast. Before I turn the call to management, I have a few housekeeping details to run through. For those of you who didn't receive an e-mail of the earnings release yesterday afternoon from me and would like to be added to that list, you can contact me or my offices, DRG&L. That number is (713) 529-6600, and you can find our -- the contact information or you could e-mail me at ken@dennard.com.

There'll also be a replay of today's call available via webcast on the company's website, which is, of course, menswearhouse.com in the Investor Relations section. Plus there'll be a recorded replay available by phone, which will be available for week, and that information is in yesterday's release.

Please note that the information reported on this call speaks only as of today, September 6, 2012, and therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening. In addition, the comments made by the management of Men's Wearhouse today during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of management of Men's Wearhouse, however, various risks, uncertainties and contingencies could cause actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to read the company's annual report on Form 10-K, its quarterly reports on Form 10-Q or -- and current reports on Form 8-K to understand certain of those risks, uncertainties and contingencies.

And now with that all being said, I'd like to turn the call over to Men's Wearhouse founder and Executive Chairman, George Zimmer. George.

George A. Zimmer

Thanks, Ken, and good morning. On our last quarterly call, we reaffirmed our annual guidance of $2.70 to $2.78 earnings per share. Today, we're raising our annual guidance to $2.74 to $2.80, and later in the call, Diana Wilson, our Interim CFO, will talk about both the financial results and outlook. Obviously, there's a difference in how the Street and the company anticipate quarterly estimates. The simple answer is this: As we close unproductive tuxedo rental stores, our productivity and profitability rises in the fourth quarter. In fact, this year, our fourth quarter will be positive. And although we understand that a mid-single-digit comp increase this year at Men's Wearhouse stores is not last year's double-digit increase, we feel it's a good number considering overall macroeconomic conditions and the fact that we are comparing against such a favorable increase last year. Not only is our comp good at Men's Wearhouse stores, but at Moores stores as well. That makes sense because we run Moores like an extension of Men's Wearhouse.

And finally, we've launched the new television campaign at the end of the first quarter, which appears to be effective. It's simple. Me, driving around downtown, passing a lot of young, hip, and even tattooed customers promoting modern fit clothing, which Doug will comment on during his remarks.

During our last call, it was too early to judge the new campaign, but now we are excited about it. This is the umbrella marketing strategy covering television and social media for Men's Wearhouse, Men's Wearhouse and Tux, and Moores stores, which represent over 75% of the total company volume.

Before hearing from Doug Ewert, our CEO, let me introduce our Interim CFO, Diana Wilson. Diana began her career in public accounting, working with our Vice Chairman David Edwab, before joining Men's Wearhouse. Diana has been with Men's Wearhouse for 13 years and has been looking at our financial statements for longer than that. Certainly, we all wish Neill well in his new job at Francesca's. And I'm sure you will appreciate Diana's accounting background and attention to detail as reflected in her career path from Chief Accounting Officer to her new position as Interim CFO. Diana?

Diana M. Wilson

Thanks, George, and good morning, everyone. We hope you've had a chance to review the information in the press release we issued yesterday evening. We have come to realize that there hasn't always been enough time to study our results before the conference call, so we've revised our earnings release and conference call schedule. We believe this will improve the quarterly reporting process and will provide our shareholders, analysts and others that follow us more time to digest our results before we have our conference call. And we plan to make our comments more focused on the performance of our retail segment brand, as well as our Corporate Apparel segment to provide better insight into our consolidated results.

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