Tailoring Growth at Men's Wearhouse: Fool by Numbers

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On May 22, Men's Wearhouse (NYSE: MW) released first-quarter earnings for the period ended May 5.

• Total sales increased 14.2%, but comps were 1.3% lower, despite the company projecting a gain of 1% to 2%. Luckily, Canadians are improving their wardrobes, boosting comps 5.8% higher in the country.
• Earnings at Men's Wearhouse jumped 49.1%, as the retailer earned $40.9 million in the first quarter.
• The company expects to easily top analyst estimates in the second quarter. Thanks to its acquisition of After Hours, it projects earnings of $0.88 to $0.92 per share. It also raised its annual outlook to a range of $2.84-$2.94 per share.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$496.1	$434.6	14.2%
Net Profit	$40.9	$28.9	49.1%
EPS	$0.75	$0.53	41.5%
Diluted Shares*	54,709	54,719	(0.0%)

*Expressed in thousands

Get back to basics with the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	45.6%	42.1%	3.5
Operating Margin	13.2%	10.7%	2.5
Net Margin	8.3%	6.6%	1.6

*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$125.5	$264.1	(52.5%)
Inventory	$474.4	$432.4	9.7%

Liabilities	Q1 2007	Q1 2006	Change
Long-Term Debt	$78.1	$207.4	(62.3%)

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2007	Q1 2006	Change
Cash From Ops	$40.3	$10.8	273.5%
Capital Expenditures	$11.7	$12.3	(5.2%)
Free Cash Flow	$28.6	($1.5)	N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

• Quick Take: Men's Wearhouse Dressed Down
• A Natty Quarter at Men's Wearhouse
• A Second Look at Men's Wearhouse

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Mike Cianciolo held no position in Men's Wearhouse.