The firm’s plan for the quarter was based on an increase of 35 basis points which it beat due to active cost management in light of lower than planned sales. However, this better than planned performance was offset by the inclusion of After Hours, which runs on a higher relative cost model than that of the Men’s Wearhouse.

Weighted average diluted shares outstanding of 54.7 million were unchanged from the prior year.

Share repurchases in the quarter were 444,100 shares at a value of $19.3 million and the firm has approximately $40 million remaining in its share repurchase authorization going into the second quarter.

Total retail inventories excluding After Hours increased 7% over the prior year quarter.

On a per-store basis inventories increased 2.1% and on a per square foot basis decreased 2.8%.

- Depreciation and amortization was $17 million for the quarter and capital expenditures were $11.7 million. In addition, $69.7 million cash consideration was made for the purchase of After Hours on April 9, 2007.

The firm opened six net new stores, one at Men’s Wearhouse and five at K&G.

The firm expanded or relocated 13 stores, 10 of those at the Men’s Wearhouse, 1 at K&G and 2 at Moores; all together, resulted in a 1.6% increase in gross square footage for the quarter.

Outlook

The guidance is being updated now to reflect the impact of the recent acquisition of After Hours Formalwear.

The firm’s core retail businesses in the US are clearly experiencing from a top-line standpoint a pace that is running below recent trend lines. The company has experienced regional weakness in the states of California and Florida, which the management believes to be predominantly the result of economic conditions, and in particular, the housing market. This dynamic is most notable on the operations of the Men’s Wearhouse store base.

K&G are stores that target a more price sensitive customer whose buying patterns are reflective of a buy-today-to-wear-today approach has also experienced a tone of business that is reflective of a customer challenged by rising costs, particularly energy. While the firm is experiencing improvements in its ladies business driven by tighter merchandise assortments around ladies career apparel, shoes, and accessories, the current challenges at K&G are men’s tailored clothing oriented.

The company’s business trends are moderating and they now appear to be moving below the most recently forecasted trend lines. The management does not see nor anticipate an impending sharp decline.

The company is are trimming its comparable store sales expectations at its US based stores for the second quarter to a range of flat to an increase of 1%, and for the full year to a range of a decrease of 1% to flat. The implied strength in the second quarter from that guidance is reflective of a seasonal peak in the second quarter from tuxedo business. After hours is not included in comparable sales numbers and will not be until fiscal 2008.

The firm’s Canadian group of stores, Moores, is being supported by a more robust macroeconomic environment and a stronger currency, both of which are serving to offset the soft US performance. The company is looking for comparable store sales to increase at a range of 4% to 6% in the second quarter and 3% to 5% for the full year. While the firm modestly challenged from a top line perspective, gross margins, on the other hand, are planned to continue to increase. The firm’s ongoing strategy of increasing the penetration of private label apparel across all of its retail businesses, as well as the growing mix of its sales being derived from tuxedo rentals. This is offsetting fixed costing leverage from lower comparable store sales expectations. The firm does anticipate stronger merchandise margins than initially planned at the beginning of the year from its Canadian-based operations. This is due to a stronger sell thorough of higher margin items and clothing assortments coupled with a stronger Canadian dollar. Selling, general, and administrative cost as a percentage of sales are expected to increase year-over-year for both the second quarter and full year.

While the firm’s core business is being planned with a modest rate increase in light of the softening sales outlook, the firm will experience a higher SG&A as the result of the after hours acquisition, due to the fact that After Hours runs on a higher relative cost model than that of the Men’s Warehouse.

Sales for the second quarter and fiscal year from the inclusion of the After Hours operation are expected in a range of $80 million to $85 million and for the fiscal year $212 million to $217 million.

The second quarter earnings per share guidance, excluding the After Hours acquisition, is being set at a range of 73 cents to 75 cents, compared to the prior year comparable quarter diluted earnings per share of 65 cents and current consensus estimates of 70 cents. The impact of the after hours acquisition, including estimated integration costs, current year synergies, and acquisition funding costs is expected to be accretive to the diluted earnings per share in the range of 15 cents to 17 cents, bringing the quarter including after hours to a range of 88 cents to 92 cents. The fiscal 2007 diluted earnings per share guidance, excluding the after hours acquisition, is being updated to set a range of $2.81 to $2.89 compared to previous guidance range of $2.80 to $2.91 and to comparable prior year adjusted diluted earnings per share of $2.55.

The impact of the After Hours acquisition including integration costs, current year synergies and acquisition funding costs is expected to be accretive to diluted earnings per share in the range of 3 cents to 5 cents bringing the full year including After Hour’s to a range of $2.87 to $2.94.

The seasonality of After Hours revenues is heavily concentrated in the months of April, May and June. Second quarter followed by the third quarter is the highest revenue quarter for After Hours and first and fourth quarters are considered off season. Therefore, the profitability in the second and third quarters is mostly offset by losses in the first and fourth quarters.