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:

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.