UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-16097

THE MEN’S WEARHOUSE, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas (State or Other Jurisdiction of Incorporation or Organization)		74-1790172 (I.R.S. Employer Identification Number)
6380 Rogerdale Houston, Texas (Address of Principal Executive Offices)		77072-1624 (Zip Code)

(281) 776-7000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ. No o.

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ. No o.

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o. No þ.

     The number of shares of common stock of the Registrant, par value $.01 per share, outstanding at December 1, 2011 was 51,262,224 excluding 20,447,822 shares classified as Treasury Stock.

 

 

REPORT INDEX

Part and Item No.		Page No.
PART I — Financial Information
Item 1 — Condensed Consolidated Financial Statements
General Information			1
Condensed Consolidated Balance Sheets as of October 29, 2011 (unaudited), October 30, 2010 (unaudited) and January 29, 2011			2
Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended October 29, 2011 (unaudited) and October 30, 2010 (unaudited)			3
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended October 29, 2011 (unaudited) and October 30, 2010 (unaudited)			4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 29, 2011 (unaudited) and October 30, 2010 (unaudited)			5
Notes to Condensed Consolidated Financial Statements (unaudited)			6
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3 — Quantitative and Qualitative Disclosures about Market Risk			35
Item 4 — Controls and Procedures			35
PART II — Other Information
Item 1 — Legal Proceedings			36
Item 1A — Risk Factors			36
Item 2— Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 6 — Exhibits			37
SIGNATURES			37
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Forward-Looking and Cautionary Statements

     Certain statements made in this Quarterly Report on Form 10-Q and in other public filings and press releases by the Company contain “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risk and uncertainty. These forward-looking statements may include, but are not limited to, references to future capital expenditures, acquisitions, sales, earnings, margins, costs, number and costs of store openings, demand for clothing, market trends in the retail and corporate apparel clothing business, currency fluctuations, inflation and various economic and business trends. Forward-looking statements may be made by management orally or in writing, including, but not limited to, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and other sections of our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and the Securities Act of 1933.

     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. Factors that might cause or contribute to such differences include, but are 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 integration of acquisitions; performance issues with key suppliers; disruption in buying practices 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. Refer to “Risk Factors” in our Annual Report on Form 10-K for the year ended January 29, 2011 for a more complete discussion of these and other factors that might affect our performance and financial results. These forward-looking statements are intended to convey the Company’s expectations about the future, and speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

     The condensed consolidated financial statements herein include the accounts of The Men’s Wearhouse, Inc. and its subsidiaries and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair statement of the results for the three and nine months ended October 29, 2011 and October 30, 2010.

     Our business historically has been seasonal in nature, and the operating results of the interim periods presented are not necessarily indicative of the results that may be achieved for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended January 29, 2011 and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year then ended filed with the SEC.

     Unless the context otherwise requires, “Company”, “we”, “us” and “our” refer to The Men’s Wearhouse, Inc. and its subsidiaries.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

		October 29,				October 30,				January 29,
		2011				2010				2011
		(Unaudited)				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	138,545			$	197,843			$	136,371
Accounts receivable, net			66,094				65,069				60,607
Inventories			616,758				509,422				486,499
Other current assets			61,088				62,830				80,531
Total current assets			882,485				835,164				764,008
PROPERTY AND EQUIPMENT, net			348,785				333,007				332,611
TUXEDO RENTAL PRODUCT, net			85,876				86,121				89,465
GOODWILL			88,707				90,580				87,994
INTANGIBLE ASSETS, net			35,378				38,678				37,348
OTHER ASSETS			3,579				21,831				8,892
TOTAL ASSETS		$	1,444,810			$	1,405,381			$	1,320,318
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable		$	155,610			$	145,138			$	123,881
Accrued expenses and other current liabilities			146,391				130,550				139,640
Income taxes payable			22,727				12,294				3,135
Current maturities of long-term debt			—				45,584				—
Total current liabilities			324,728				333,566				266,656
DEFERRED TAXES AND OTHER LIABILITIES			76,429				72,664				69,809
Total liabilities			401,157				406,230				336,465
COMMITMENTS AND CONTINGENCIES (Note 4 and Note 15)
EQUITY:
Preferred stock			—				—				—
Common stock			717				709				710
Capital in excess of par			356,414				336,942				341,663
Retained earnings			1,108,662				1,023,467				1,002,975
Accumulated other comprehensive income			41,504				37,651				38,366
Treasury stock, at cost			(476,749	)			(412,761	)			(412,761	)
Total equity attributable to common shareholders			1,030,548				986,008				970,953
Noncontrolling interest			13,105				13,143				12,900
Total equity			1,043,653				999,151				983,853
TOTAL LIABILITIES AND EQUITY		$	1,444,810			$	1,405,381			$	1,320,318

See Notes to Condensed Consolidated Financial Statements.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)

		For the Three Months Ended								For the Nine Months Ended
		October 29,				October 30,				October 29,				October 30,
		2011				2010				2011				2010
Net sales:
Retail clothing product		$	377,307			$	350,250			$	1,189,357			$	1,072,539
Tuxedo rental services			112,005				111,297				333,413				325,913
Alteration and other services			34,480				33,022				107,767				98,262
Total retail sales			523,792				494,569				1,630,537				1,496,714
Corporate apparel clothing product sales			60,810				55,534				189,978				63,844
Total net sales			584,602				550,103				1,820,515				1,560,558
Cost of sales:
Retail clothing product			161,669				163,231				527,938				484,913
Tuxedo rental services			15,761				17,484				45,730				50,846
Alteration and other services			26,669				24,598				80,352				73,108
Occupancy costs			69,425				68,978				205,006				208,472
Total retail cost of sales			273,524				274,291				859,026				817,339
Corporate apparel clothing product cost of sales			42,909				40,813				137,442				46,945
Total cost of sales			316,433				315,104				996,468				864,284
Gross margin:
Retail clothing product			215,638				187,019				661,419				587,626
Tuxedo rental services			96,244				93,813				287,683				275,067
Alteration and other services			7,811				8,424				27,415				25,154
Occupancy costs			(69,425	)			(68,978	)			(205,006	)			(208,472	)
Total retail gross margin			250,268				220,278				771,511				679,375
Corporate apparel clothing product gross margin			17,901				14,721				52,536				16,899
Total gross margin			268,169				234,999				824,047				696,274
Selling, general and administrative expenses			208,147				200,588				631,370				571,406
Operating income			60,022				34,411				192,677				124,868
Interest income			112				83				270				163
Interest expense			(396	)			(357	)			(1,051	)			(937	)
Earnings before income taxes			59,738				34,137				191,896				124,094
Provision for income taxes			19,836				8,789				67,532				42,222
Net earnings including noncontrolling interest			39,902				25,348				124,364				81,872
Net (earnings) loss attributable to noncontrolling interest			(25	)			(89	)			16				(89	)
Net earnings attributable to common shareholders		$	39,877			$	25,259			$	124,380			$	81,783
Net earnings per common share attributable to common shareholders (Note 3):
Basic		$	0.77			$	0.47			$	2.39			$	1.54
Diluted		$	0.77			$	0.47			$	2.37			$	1.54
Weighted average common shares outstanding (Note 3):
Basic			51,110				52,702				51,505				52,589
Diluted			51,339				52,895				51,776				52,776
Cash dividends declared per common share		$	0.12			$	0.09			$	0.36			$	0.27

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

		For the Three Months Ended								For the Nine Months Ended
		October 29,				October 30,				October 29,				October 30,
		2011				2010				2011				2010
Net earnings including noncontrolling interest		$	39,902			$	25,348			$	124,364			$	81,872
Change in derivative fair values, net of tax			—				(94	)			—				—
Currency translation adjustments, net of tax			(8,051	)			1,487				3,359				5,164
Total comprehensive income including noncontrolling interest			31,851				26,741				127,723				87,036
Less comprehensive income attributable to noncontrolling interest:
Net (earnings) loss			(25	)			(89	)			16				(89	)
Currency translation adjustments, net of tax			228				(50	)			(221	)			(50	)
Amounts attributable to noncontrolling interest			203				(139	)			(205	)			(139	)
Comprehensive income attributable to common shareholders		$	32,054			$	26,602			$	127,518			$	86,897

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

(Unaudited)

		For the Nine Months Ended
		October 29,				October 30,
		2011				2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings including noncontrolling interest		$	124,364			$	81,872
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			56,572				57,210
Tuxedo rental product amortization			25,923				31,732
Loss on disposition of assets			2,163				209
Asset impairment charges			1,709				3,350
Gain on bargain purchase acquisition			—				(524	)
Deferred rent expense			1,063				2,138
Share-based compensation			10,166				8,787
Excess tax benefits from share-based plans			(1,592	)			(952	)
Deferred tax (benefit) provision			12,655				(1,724	)
Increase in accounts receivable			(4,725	)			(23,708	)
Increase in inventories			(128,624	)			(6,502	)
Increase in tuxedo rental product			(22,159	)			(14,492	)
Decrease in other assets			11,678				4,194
Increase in accounts payable, accrued expenses and other current liabilities			32,886				36,760
Increase (decrease) in income taxes payable			26,036				(12,271	)
Decrease in other liabilities			(569	)			(197	)
Net cash provided by operating activities			147,546				165,882
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(66,960	)			(43,835	)
Acquisitions of businesses, net of cash			—				(97,786	)
Proceeds from sales of property and equipment			59				76
Net cash used in investing activities			(66,901	)			(141,545	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock			5,995				2,503
Cash dividends paid			(18,880	)			(14,318	)
Tax payments related to vested deferred stock units			(2,955	)			(2,748	)
Excess tax benefits from share-based plans			1,592				952
Purchase of treasury stock			(63,988	)			(144	)
Net cash used in financing activities			(78,236	)			(13,755	)
Effect of exchange rate changes			(235	)			1,243
INCREASE IN CASH AND CASH EQUIVALENTS			2,174				11,825
Balance at beginning of period			136,371				186,018
Balance at end of period		$	138,545			$	197,843

See Notes to Condensed Consolidated Financial Statements.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Significant Accounting Policies

     Basis of Presentation — The condensed consolidated financial statements herein include the accounts of The Men’s Wearhouse, Inc. and its subsidiaries (the “Company”) and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 29, 2011.

     The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual amounts could differ from those estimates.

     On August 6, 2010, we acquired Dimensions Clothing Limited (“Dimensions”) and certain assets of Alexandra plc (“Alexandra”), two leading providers of corporate clothing uniforms and workwear in the United Kingdom (refer to Note 2 for further details regarding the acquisitions). As a result of these acquisitions, in the third quarter of fiscal 2010, the Company revised its segment reporting to reflect two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities. Prior to these acquisitions our corporate apparel business did not have a significant effect on the revenues or expenses of the Company and we reported our business as one operating segment. Refer to Note 13 for further segment information.

     On September 1, 2010, the Company assigned its rights to receive an aggregate of $2.6 million of the proceeds from life insurance policies on the life of George Zimmer, Executive Chairman of the Board, to Mr. Zimmer and a trust for the benefit of Mr. Zimmer in exchange for a cash payment of $2.6 million from Mr. Zimmer. The Company acquired the right to receive a portion of the proceeds from the life insurance policies as a result of paying premiums in the amount of $2.6 million on the policies. All such premium payments were made by the Company prior to 2003.

     Recent Accounting Pronouncements — In September 2011, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding testing goodwill for impairment. The updated guidance will allow for companies to first assess qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. Under this amendment, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendment includes a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The amended guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of this update will only impact our testing of goodwill for impairment and will have no impact on our financial position, results of operations or cash flows. We are currently evaluating the impact of this updated guidance on our goodwill impairment testing process.

     In June 2011, the FASB issued updated guidance regarding the presentation of comprehensive income. The updated guidance allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total amount for comprehensive income. The update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The guidance will be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. The adoption of this update will only impact the presentation of comprehensive income in our condensed consolidated financial statements.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     In May 2011, the FASB updated the guidance regarding certain accounting and disclosure requirements related to fair value measurements. The updated guidance amends U.S. Generally Accepted Accounting Principles (“GAAP”) to create more commonality with International Financial Reporting Standards (“IFRS”) by changing some of the wording used to describe requirements for measuring fair value and for disclosing information about fair value measurements. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is not permitted. We do not expect the adoption of this update to have a material impact on our financial position, results of operations or cash flows.

     In December 2010, the FASB updated the disclosures of supplementary pro forma information for business combinations. This update specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This amendment also expands the supplemental pro forma disclosures related to business combinations to include a description of the nature and amount of material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This update is effective prospectively for business combinations for which the acquisition date is on or after the beginning of our 2011 fiscal year and is not expected to have a material impact on our financial position, results of operations or cash flows.

     In December 2010, the FASB issued guidance to clarify when to perform step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This update modifies step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts, requiring the entity to assess whether it is more likely than not that the reporting units’ goodwill is impaired in order to determine if the entity should perform step 2 of the goodwill impairment test for those reporting unit(s). The adoption of this update at the beginning of our 2011 fiscal year did not have a material impact on our financial position, results of operations or cash flows.

     In January 2010, the FASB issued authoritative guidance that expands the required disclosures about fair value measurements. This guidance provides for new disclosures requiring the Company to (a) disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers and (b) present separately information about purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements. This guidance also provides clarification of existing disclosures requiring the Company to (i) determine each class of assets and liabilities based on the nature and risks of the investments rather than by major security type and (ii) for each class of assets and liabilities, disclose the valuation techniques and inputs used to measure fair value for both Level 2 and Level 3 fair value measurements. We adopted this guidance at the beginning of our 2010 fiscal year, except for the presentation of purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements, which we adopted at the beginning of our 2011 fiscal year. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

2. Acquisitions

     On August 6, 2010, we acquired Dimensions and certain assets of Alexandra, two leading providers of corporate clothing uniforms and workwear in the United Kingdom (“UK”), to expand our corporate apparel operations. The results of operations for Dimensions and Alexandra have been included in the condensed consolidated financial statements since that date. The acquired businesses are organized under a UK-based holding company, of which the Company controls 86% and certain previous shareholders of Dimensions control 14%. The Company has the right to acquire the remaining outstanding shares of the UK-based holding company after fiscal 2013 on terms set forth in the Investment, Shareholders’ and Stock Purchase Agreement.

     The acquisition-date cash consideration transferred for the Dimensions and Alexandra acquisitions was $79.8 million and $18.0 million, respectively, totaling $97.8 million (£61 million), and was funded through the Company’s cash on hand.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed in the Dimensions and Alexandra acquisitions as of the date of acquisition (in thousands).

		As of August 6, 2010
		Dimensions				Alexandra				Total
Current non-cash assets		$	25,515			$	—			$	25,515
Inventory			48,340				16,980				65,320
Property and equipment			5,374				283				5,657
Intangible assets			35,474				1,501				36,975
Total identifiable assets acquired			114,703				18,764				133,467
Current liabilities			40,590				279				40,869
Other liabilities			8,273				—				8,273
Total liabilities assumed			48,863				279				49,142
Net identifiable assets acquired			65,840				18,485				84,325
Goodwill			26,989				—				26,989
Subtotal			92,829				18,485				111,314
Less: Fair value of noncontrolling interest			(13,004	)			—				(13,004	)
Less: Gain on bargain purchase			—				(524	)			(524	)
Net assets acquired		$	79,825			$	17,961			$	97,786

          Goodwill is calculated as the excess of the purchase price over the net assets acquired. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Dimensions. All of the goodwill has been assigned to our corporate apparel reporting segment and is non-deductible for tax purposes.

          Acquired intangible assets for both acquisitions consist primarily of customer relationship intangibles and trademarks, which are being amortized over their estimated useful lives of primarily 12 years. Acquired intangible assets also include $1.3 million related to certain trademarks of Alexandra which are not subject to amortization but will be evaluated at least annually for impairment.

          In connection with the Alexandra acquisition, we recognized a gain on a bargain purchase of approximately $0.5 million in fiscal 2010. The transaction resulted in a bargain purchase because the previous UK business of Alexandra plc was in administration (similar to bankruptcy) and was being sold through a bidding process.

          The $13.0 million noncontrolling interest fair value as of the August 6, 2010 acquisition date was determined based upon the $79.8 million fair value of consideration transferred to acquire our 86% interest in the UK businesses.

          Total integration costs incurred for the acquisitions of Dimensions and Alexandra were $1.0 million and $2.5 for the three and nine months ended October 29, 2011, respectively, and are included in selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of earnings. Total acquisition transaction and integration costs incurred for the acquisitions of Dimensions and Alexandra were $1.4 million and $4.1 for the three and nine months ended October 30, 2010, respectively, and are included in SG&A in the condensed consolidated statement of earnings.

          For the three months ended October 29, 2011, the acquired businesses contributed net sales of $53.9 million, gross margin of $17.0 million and net earnings, including the pretax $1.0 million in integration costs, of $0.9 million to the Company’s condensed consolidated net earnings attributable to common shareholders. For the nine months ended October 29, 2011, the acquired businesses contributed net sales of $171.1 million, gross margin of $48.5 million and net earnings, including the pretax $2.5 million in integration costs, of $2.1 million to the Company’s condensed consolidated net earnings attributable to common shareholders. From the date of acquisition to the period ended October 30, 2010, the acquired businesses contributed net sales of $50.6 million, gross margin of $13.6 million and net earnings, including the pretax

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

$4.1 million in acquisition transaction and integration costs, of $2.5 million to the Company’s condensed consolidated net earnings attributable to common shareholders.

     The following table presents unaudited pro forma consolidated financial information as if the closing of our acquisition of Dimensions had occurred on February 1, 2009, after giving effect to certain purchase accounting adjustments (in thousands, except per share data). The acquisition of Alexandra was not material to the Company’s financial position or results of operations, therefore pro forma operating results for Alexandra have not been included below.

		For the Three				For the Nine
		Months Ended				Months Ended
		October 30, 2010				October 30, 2010
Total net sales		$	552,728			$	1,623,168
Net earnings attributable to common shareholders		$	26,220			$	86,463
Net earnings per common share attributable to common shareholders:
Basic		$	0.49			$	1.63
Diluted		$	0.49			$	1.62

     This pro forma information is not necessarily indicative of the results of operations that actually would have resulted had the Dimensions acquisition occurred on the dates indicated above or that may result in the future and does not reflect potential synergies, integration costs or other such costs and savings.

     Subsequent to completion of the acquisitions, Alexandra operations were extended to The Netherlands and France through newly formed subsidiaries during the fourth quarter of fiscal 2010. These subsidiaries did not have a material impact on our financial position, results of operations or cash flows as of and for the three and nine months ended October 29, 2011.

3. Earnings per Share

     We calculate earnings per common share attributable to common shareholders using the two-class method in accordance with the guidance for determination of whether instruments granted in share-based payment transactions are participating securities. Our unvested restricted stock and deferred stock units contain rights to receive nonforfeitable dividends or dividend equivalents, respectively, and thus are participating securities requiring the two-class method of computing earnings per common share attributable to common shareholders. The two-class method is an earnings allocation formula that determines earnings per common share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

     Basic earnings per common share attributable to common shareholders is determined using the two-class method and is computed by dividing net earnings attributable to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per common share attributable to common shareholders reflects the more dilutive earnings per common share amount calculated using the treasury stock method or the two-class method.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     The following table sets forth the computation of basic and diluted earnings per common share attributable to common shareholders (in thousands, except per share amounts). Basic and diluted earnings per common share attributable to common shareholders are computed using the actual net earnings available to common shareholders and the actual weighted-average common shares outstanding rather than the rounded numbers presented within our condensed consolidated statement of earnings and the accompanying notes. As a result, it may not be possible to recalculate earnings per common share attributable to common shareholders in our condensed consolidated statement of earnings and the accompanying notes.

		For the Three Months Ended								For the Nine Months Ended
		October 29,				October 30,				October 29,				October 30,
		2011				2010				2011				2010
Numerator
Total net earnings attributable to common shareholders		$	39,877			$	25,259			$	124,380			$	81,783
Net earnings allocated to participating securities (restricted stock and deferred stock units)			(516	)			(236	)			(1,496	)			(758	)
Net earnings attributable to common shareholders		$	39,361			$	25,023			$	122,884			$	81,025
Denominator
Basic weighted average common shares outstanding			51,110				52,702				51,505				52,589
Effect of dilutive securities:
Stock options and equity-based compensation			229				193				271				187
Diluted weighted average common shares outstanding			51,339				52,895				51,776				52,776
Net earnings per common share attributable to common shareholders:
Basic		$	0.77			$	0.47			$	2.39			$	1.54
Diluted		$	0.77			$	0.47			$	2.37			$	1.54

     For the three and nine months ended October 29, 2011, 0.5 million and 0.4 million anti-dilutive stock options were excluded from the calculation of diluted earnings per common share, respectively. For the three and nine months ended October 30, 2010, 0.9 million anti-dilutive stock options were excluded from each of the calculations of diluted earnings per common share.

4. Debt

     On January 26, 2011, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with a group of banks to amend and restate our then existing credit facility, which provided the Company with a revolving credit facility, scheduled to mature on February 11, 2012, as well as a term loan to our Canadian subsidiaries, which was scheduled to mature on February 10, 2011. The term loan outstanding balance of US$46.7 million was paid in full during the fourth quarter of fiscal 2010.

     The Credit Agreement provides for a total senior revolving credit facility of $200.0 million, with increases to $300.0 million upon additional lender commitments, that matures on January 26, 2016. The Credit Agreement is secured by the stock of certain of our subsidiaries. The Credit Agreement has several borrowing and interest rate options including the following indices: (i) adjusted LIBO rate, (ii) adjusted EURIBO rate, (iii) CDO rate, (iv) Canadian prime rate or (v) an alternate base rate (equal to the greater of the prime rate, the federal funds rate plus 0.5% or the adjusted LIBO rate for a one month period plus 1.0%). Advances under the Credit Agreement bear interest at a rate per annum using the applicable indices plus a varying interest rate margin up to 2.75%. The Credit Agreement also provides for fees applicable to amounts available to be drawn under outstanding letters of credit which range from 2.00% to 2.75%, and a fee on unused commitments which ranges from 0.35% to 0.50%. As of October 29, 2011, there were no borrowings outstanding under the Credit Agreement.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     The Credit Agreement contains certain restrictive and financial covenants, including the requirement to maintain certain financial ratios. The restrictive provisions in the Credit Agreement reflect an overall covenant structure that is generally representative of a commercial loan made to an investment-grade company. Our debt, however, is not rated and we have not sought, and are not seeking, a rating of our debt. We were in compliance with the covenants in the Credit Agreement as of October 29, 2011.

     We utilize letters of credit primarily to secure inventory purchases and as collateral for workers compensation claims. At October 29, 2011, letters of credit totaling approximately $29.0 million were issued and outstanding. Borrowings available under our Credit Agreement at October 29, 2011 were $171.0 million.

5. Supplemental Cash Flows

     Supplemental disclosure of cash flow information is as follows (in thousands):

		For the Nine Months Ended
		October 29,				October 30,
		2011				2010
Cash paid during the nine months for:
Interest		$	713			$	785
Income taxes, net		$	16,376			$	55,322
Schedule of noncash investing and financing activities:
Tax benefit related to share-based plans		$	1,552			$	662
Treasury stock contributed to employee stock plan		$	—			$	9
Cash dividends declared		$	6,209			$	4,783

     We had unpaid capital expenditure purchases accrued in accounts payable, accrued expenses and other current liabilities of approximately $11.4 million and $2.1 million at October 29, 2011 and October 30, 2010, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

6. Other Current Assets, Accrued Expenses and Other Current Liabilities and Deferred Taxes and Other Liabilities

     Other current assets consist of the following (in thousands):

		October 29,				October 30,				January 29,
		2011				2010				2011
Prepaid expenses		$	30,035			$	29,851			$	31,009
Current deferred tax asset			24,138				26,521				32,151
Tax receivable			119				174				12,927
Other			6,796				6,284				4,444
Total other current assets		$	61,088			$	62,830			$	80,531

     Accrued expenses and other current liabilities consist of the following (in thousands):

Accrued salary, bonus, sabbatical and vacation		$	44,461			$	35,689			$	50,831
Sales, payroll and property taxes payable			22,934				19,081				17,005
Accrued workers compensation and medical costs			18,144				17,090				17,318
Customer deposits, prepayments and refunds payable			18,376				14,130				12,770
Unredeemed gift certificates			11,556				11,921				14,385
Loyalty program reward certificates			7,385				7,002				7,636
Cash dividends declared			6,209				4,783				6,396
Other			17,326				20,854				13,299
Total accrued expenses and other current liabilities		$	146,391			$	130,550			$	139,640

     Deferred taxes and other liabilities consist of the following (in thousands):

Deferred rent and landlord incentives		$	50,546			$	47,544			$	47,910
Non-current deferred and other income tax liabilities			19,292				17,433				15,079
Other			6,591				7,687				6,820
Total deferred taxes and other liabilities		$	76,429			$	72,664			$	69,809

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

7. Equity and Noncontrolling Interest

     A reconciliation of the total carrying amount of the Company’s equity accounts for the nine months ended October 29, 2011 is as follows (in thousands):

																						Total
														Accumulated								Equity
						Capital in								Other								Attributable to
		Common				Excess of				Retained				Comprehensive				Treasury				Common				Noncontrolling				Total
		Stock				Par Value				Earnings				Income				Stock, at Cost				Shareholders				Interest				Equity
Balances — January 29, 2011		$	710			$	341,663			$	1,002,975			$	38,366			$	(412,761	)		$	970,953			$	12,900			$	983,853
Net earnings (loss)			—				—				124,380				—				—				124,380				(16	)			124,364
Other comprehensive income			—				—				—				3,138				—				3,138				221				3,359
Cash dividends			—				—				(18,693	)			—				—				(18,693	)			—				(18,693	)
Share-based compensation			—				10,166				—				—				—				10,166				—				10,166
Common stock issued to stock discount plan			1				1,724				—				—				—				1,725				—				1,725
Common stock issued upon exercise of stock options			3				4,267				—				—				—				4,270				—				4,270
Common stock issued pursuant to restricted stock and deferred stock unit awards			3				(3	)			—				—				—				—				—				—
Tax payments related to vested deferred stock units			—				(2,955	)			—				—				—				(2,955	)			—				(2,955	)
Tax benefit related to share-based plans			—				1,552				—				—				—				1,552				—				1,552
Treasury stock purchased			—				—				—				—				(63,988	)			(63,988	)			—				(63,988	)
Balances — October 29, 2011		$	717			$	356,414			$	1,108,662			$	41,504			$	(476,749	)		$	1,030,548			$	13,105			$	1,043,653

     A reconciliation of the total carrying amount of the Company’s equity accounts for the nine months ended October 30, 2010 is as follows (in thousands):

																						Total
														Accumulated								Equity
						Capital in								Other								Attributable to
		Common				Excess of				Retained				Comprehensive				Treasury				Common				Noncontrolling				Total
		Stock				Par Value				Earnings				Income				Stock, at Cost				Shareholders				Interest				Equity
Balances — January 30, 2010		$	705			$	327,742			$	956,032			$	32,537			$	(412,626	)		$	904,390			$	—			$	904,390
Net earnings			—				—				81,783				—				—				81,783				89				81,872
Other comprehensive income			—				—				—				5,114				—				5,114				50				5,164
Cash dividends			—				—				(14,348	)			—				—				(14,348	)			—				(14,348	)
Share-based compensation			—				8,787				—				—				—				8,787				—				8,787
Common stock issued to stock discount plan			1				1,511				—				—				—				1,512				—				1,512
Common stock issued upon exercise of stock options			1				990				—				—				—				991				—				991
Common stock issued pursuant to restricted stock and deferred stock unit awards			2				(2	)			—				—				—				—				—				—
Tax payments related to vested deferred stock units			—				(2,748	)			—				—				—				(2,748	)			—				(2,748	)
Tax benefit related to share-based plans			—				662				—				—				—				662				—				662
Treasury stock purchased			—				—				—				—				(144	)			(144	)			—				(144	)
Treasury stock issued to profit sharing plan			—				—				—				—				9				9				—				9
Fair value of noncontrolling interest associated with business acquired			—				—				—				—				—				—				13,004				13,004
Balances — October 30, 2010		$	709			$	336,942			$	1,023,467			$	37,651			$	(412,761	)		$	986,008			$	13,143			$	999,151

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

8. Treasury Stock

     As of October 29, 2011, we had 20,447,822 shares held in treasury stock. The change in our treasury shares for the year ended January 29, 2011 and for the nine months ended October 29, 2011 is provided below:

		Treasury Shares
Balance, January 30, 2010			18,111,602
Treasury stock issued to profit sharing plan			(386	)
Purchases of treasury stock			7,134
Balance, January 29, 2011			18,118,350
Purchases of treasury stock			2,329,472
Balance, October 29, 2011			20,447,822

     In January 2006, the Board of Directors authorized a $100.0 million share repurchase program of our common stock. This authorization superceded any remaining previous authorizations. In August 2007, the Company’s Board of Directors approved a replenishment of the Company’s share repurchase program to $100.0 million by authorizing $90.3 million to be added to the remaining $9.7 million of the then current program. In January 2011, the Board of Directors approved a $150.0 million share repurchase program of our common stock, which amends and increases the Company’s existing share repurchase authorization. This authorization superceded any remaining previous authorizations.

     No shares were repurchased under the August 2007 authorization during the first nine months of fiscal 2010. During the first nine months of fiscal 2011, 2,322,340 shares at a cost of $63.8 million were repurchased at an average price per share of $27.47 under the January 2011 authorization. At October 29, 2011, the remaining balance available under the January 2011 authorization was $86.2 million.

     During the nine months ended October 29, 2011, 7,132 shares at a cost of $0.2 million were repurchased at an average price per share of $27.77 in a private transaction to satisfy tax withholding obligations arising upon the vesting of certain restricted stock. During the nine months ended October 30, 2010, 7,134 shares at a cost of $0.1 million were repurchased at an average price per share of $20.24 in a private transaction to satisfy tax withholding obligations arising upon the vesting of certain restricted stock.

     The following table summarizes our treasury stock repurchases (in thousands, except share data and average price per share):

		For the Nine Months Ended
		October 29, 2011				October 30, 2010
Shares repurchased			2,329,472				7,134
Total cost		$	63,988			$	144
Average price per share		$	27.47			$	20.24

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

9. Share-Based Compensation Plans

     We maintain several equity plans under which we may grant stock options, stock appreciation rights, restricted stock, deferred stock units and performance based awards to full-time key employees and non-employee directors. We account for share-based awards in accordance with the FASB standard regarding share-based payments, which requires the compensation cost resulting from all share-based payment transactions be recognized in the financial statements. The amount of compensation cost is measured based on the grant-date fair value of the instrument issued and is recognized over the vesting period. Share-based compensation expense recognized for the three and nine months ended October 29, 2011 was $3.7 million and $10.2 million, respectively. Share-based compensation expense recognized for the three and nine months ended October 30, 2010 was $3.1 million and $8.8 million, respectively.

     Stock Options

     The following table summarizes stock option activity for the nine months ended October 29, 2011:

						Weighted-
						Average
						Exercise
		Shares				Price
Outstanding at January 29, 2011			1,563,473			$	20.64
Granted			138,250				27.84
Exercised			(275,471	)			15.50
Forfeited			(5,000	)			22.72
Expired			(3,216	)			13.74
Outstanding at October 29, 2011			1,418,036			$	22.35
Exercisable at October 29, 2011			713,523			$	20.43

     The weighted-average grant date fair value of the 138,250 stock options granted during the nine months ended October 29, 2011 was $11.65 per share. The following table summarizes the weighted average assumptions used to fair value stock options at the date of grant using the Black-Scholes option pricing model for the three and nine months ended October 29, 2011:

		For the Three				For the Nine
		Months Ended				Months Ended
		October 29,				October 29,
		2011				2011
Risk-free interest rate			0.98	%			2.16	%
Expected lives		5.0 years				5.0 years
Dividend yield			1.74	%			1.70	%
Expected volatility			57.92	%			53.67	%

     The assumptions presented in the table above represent the weighted average of the applicable assumptions used to fair value stock options. Expected volatility is based on historical volatility of our common stock. The expected term represents the period of time the options are expected to be outstanding after their grant date. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the average of the annual dividend divided by the market price of our common stock at the time of declaration.

     As of October 29, 2011, we have unrecognized compensation expense related to nonvested stock options of approximately $5.3 million which is expected to be recognized over a weighted average period of 2.5 years.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Nonvested Shares

     The following table summarizes deferred stock unit activity for the nine months ended October 29, 2011:

						Weighted-
						Average
						Grant-Date
		Shares				Fair Value
Nonvested at January 29, 2011			419,085			$	24.28
Granted			470,999				28.65
Vested (1)			(338,510	)			24.18
Forfeited			(6,625	)			26.14
Nonvested at October 29, 2011			544,949			$	28.10

     The following table summarizes restricted stock activity for the nine months ended October 29, 2011:

						Weighted-
						Average
						Grant-Date
		Shares				Fair Value
Nonvested at January 29, 2011			49,185			$	26.04
Granted			114,013				28.18
Vested			(39,556	)			26.06
Forfeited			—				—
Nonvested at October 29, 2011			123,642			$	28.01

     As of October 29, 2011, we have unrecognized compensation expense related to nonvested shares of approximately $11.9 million which is expected to be recognized over a weighted average period of 1.6 years.

     Employee Stock Purchase Plan

     The Employee Stock Discount Plan (“ESDP”) allows employees to authorize after-tax payroll deductions to be used for the purchase of up to 2,137,500 shares of our common stock at 85% of the lesser of the fair market value on the first day of the offering period or the fair market value on the last day of the offering period. We make no contributions to this plan but pay all brokerage, service and other costs incurred. The plan, as amended, allows participants to purchase no more than 125 shares during any calendar quarter.

     During the nine months ended October 29, 2011, employees purchased 76,699 shares under the ESDP, which had a weighted-average share price of $22.48 per share. As of October 29, 2011, 980,367 shares were reserved for future issuance under the ESDP.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

10. Goodwill and Other Intangible Assets

     Goodwill

     Goodwill allocated to the Company’s reportable segments and changes in the net carrying amount of goodwill for the nine months ended October 29, 2011 are as follows (in thousands):

		Retail				Corporate Apparel				Total
Balance at January 29, 2011		$	59,889			$	28,105			$	87,994
Translation adjustment			258				455				713
Balance at October 29, 2011		$	60,147			$	28,560			$	88,707

     Goodwill is evaluated for impairment annually as of our fiscal year end. A more frequent evaluation is performed if events or circumstances indicate that impairment could have occurred. Such events or circumstances could include, but are not limited to, new significant negative industry or economic trends, unanticipated changes in the competitive environment, decisions to significantly modify or dispose of operations and a significant sustained decline in the market price of our stock. No additional impairment evaluation was considered necessary during the first nine months of 2011.

     Intangible Assets

     The gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows (in thousands):

		October 29,				October 30,				January 29,
		2011				2010				2011
Amortizable intangible assets:
Carrying amount:
Trademarks, tradenames, and other intangibles		$	12,725			$	16,638			$	16,094
Customer relationships			32,968				32,751				32,417
Total carrying amount			45,693				49,389				48,511
Accumulated amortization:
Trademarks, tradenames, and other intangibles			(8,191	)			(11,359	)			(11,121	)
Customer relationships			(3,414	)			(634	)			(1,311	)
Total accumulated amortization			(11,605	)			(11,993	)			(12,432	)
Total amortizable intangible assets, net			34,088				37,396				36,079
Infinite-lived intangible assets:
Trademarks			1,290				1,282				1,269
Total intangible assets, net		$	35,378			$	38,678			$	37,348