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

For the quarterly period ended ~~October 31, 2009~~

May 1, 2010 or


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

For the transition period from to

Commission file number 1-16097

THE MEN’S WEARHOUSE, INC.

(Exact Name of Registrant as Specified in its Charter)


Texas		74-1790172
(State or Other Jurisdiction of		~~(I.R.S. Employer~~
Incorporation or Organization)		(I.R.S. Employer Identification Number)

6380 Rogerdale
Houston, Texas		77072-1624
(Address of Principal Executive Offices)		(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. Yesþ. Noo.

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). Yeso. Noo.

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 filerþ	Accelerated filero	Non-accelerated filero	Smaller reporting companyo
		(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). Yeso. Noþ.

The number of shares of common stock of the Registrant, par value $.01 per share, outstanding at ~~December~~June 4, ~~2009~~2010 was ~~52,279,947~~52,641,800 excluding ~~18,111,602~~18,118,736 shares classified as Treasury Stock.

Forward-Looking and Cautionary Statements

Certain statements made in this Quarterly Report onForm 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 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, our ~~successful execution~~success or lack of success in executing internal operating plans and new store and new market expansion plans, including ~~successful~~ integration of acquisitions, performance issues with key suppliers, disruption in buying trends 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 ~~31, 2009~~30, 2010 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 relay 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

ITEM 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GENERAL 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 adjustments which are necessary for a fair statement of the results for the ~~three~~quarters ended May 1, 2010 and ~~nine months ended October 31, 2009 and November 1, 2008.~~May 2, 2009.

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 ~~31, 2009~~30, 2010 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 31,			November 1,			January 31,			May 1,			May 2,			January 30,
	2009			2008			2009			2010			2009			2010
	(Unaudited)			(Unaudited)						(Unaudited)			(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	198,538		$	84,337		$	87,412		$	219,562		$	107,538		$	186,018
Short-term investments		—			17,434			17,121			—			17,707			—
Accounts receivable, net		17,304			17,804			16,315			24,640			24,858			16,745
Inventories		473,626			490,831			440,099			435,351			448,018			431,492
Other current assets		48,997			66,223			70,668			68,830			59,752			74,075


Total current assets		738,465			676,629			631,615			748,383			657,873			708,330

PROPERTY AND EQUIPMENT, net		370,191			393,391			387,472			336,771			378,510			344,746

TUXEDO RENTAL PRODUCT, net		100,653			84,702			96,691			101,731			120,083			102,479
GOODWILL		59,111			58,695			57,561			60,780			57,622			59,414
OTHER ASSETS, net		12,655			18,361			14,391			16,690			12,439			17,137


TOTAL	$	1,281,075		$	1,231,778		$	1,187,730		$	1,264,355		$	1,226,527		$	1,232,106


LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	121,374		$	130,944		$	108,800		$	99,720		$	142,984		$	83,052
Accrued expenses and other current liabilities		106,082			102,347			111,404			136,183			127,868			117,047
Income taxes payable		24,743			468			19			2,826			3,461			23,936
Current maturities of long-term debt											45,780			—			—


Total current liabilities		252,199			233,759			220,223			284,509			274,313			224,035

LONG-TERM DEBT		42,985			88,608			62,916			—			39,213			43,491

DEFERRED TAXES AND OTHER LIABILITIES		63,087			65,674			62,443			62,741			63,955			62,236


Total liabilities		358,271			388,041			345,582			347,250			377,481			329,762


COMMITMENTS AND CONTINGENCIES (Note 3 and Note 10)

SHAREHOLDERS’ EQUITY:
Preferred stock		—			—			—			—			—			—
Common stock		704			699			700			707			702			705
Capital in excess of par		323,864			312,485			315,404			329,030			316,034			327,742
Retained earnings		977,659			926,468			924,288			962,834			925,881			953,986
Accumulated other comprehensive income		33,203			16,621			14,292			37,304			19,055			32,537

Total		1,335,430			1,256,273			1,254,684

Treasury stock, at cost		(412,626	)		(412,536	)		(412,536	)		(412,770	)		(412,626	)		(412,626	)


Total shareholders’ equity		922,804			843,737			842,148			917,105			849,046			902,344


TOTAL	$	1,281,075		$	1,231,778		$	1,187,730		$	1,264,355		$	1,226,527		$	1,232,106

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						For the Quarter Ended
	October 31,			November 1,			October 31,			November 1,			May 1,			May 2,
	2009			2008			2009			2008			2010			2009
Net sales:
Clothing product	$	333,882		$	334,415		$	1,057,246		$	1,109,014		$	368,371		$	359,062
Tuxedo rental services		97,702			96,498			298,688			294,145			72,154			71,419
Alteration and other services		30,431			28,760			96,423			92,899			32,941			33,653

Total net sales		462,015			459,673			1,452,357			1,496,058			473,466			464,134

Cost of sales:

Clothing product, including buying and distribution costs		147,354			143,793			484,998			484,758			167,313			167,457
Tuxedo rental services		16,497			16,202			50,004			49,569			11,326			12,032
Alteration and other services		23,096			23,673			70,876			73,608			24,064			24,090
Occupancy costs		72,394			73,281			218,028			220,601			69,691			72,566

Total cost of sales		259,341			256,949			823,906			828,536			272,394			276,145

Gross margin		202,674			202,724			628,451			667,522			201,072			187,989

Selling, general and administrative expenses		172,595			178,955			525,704			574,491			179,650			179,213


Operating income		30,079			23,769			102,747			93,031			21,422			8,776

Interest income		289			744			778			2,259			34			258
Interest expense		(308	)		(978	)		(957	)		(3,617	)		(259	)		(418	)


Earnings before income taxes		30,060			23,535			102,568			91,673			21,197			8,616

Provision for income taxes		10,375			8,948			38,142			34,318			7,589			3,360


Net earnings	$	19,685		$	14,587		$	64,426		$	57,355		$	13,608		$	5,256


Net earnings per common share: (Note 2)
Net earnings per common share (Note 2):
Basic	$	0.37		$	0.28		$	1.23		$	1.11		$	0.26		$	0.10


Diluted	$	0.37		$	0.28		$	1.22		$	1.10		$	0.26		$	0.10


Weighted average common shares outstanding: (Note 2)
Weighted average common shares outstanding (Note 2):
Basic		52,208			51,703			52,072			51,604			52,417			51,895


Diluted		52,442			52,011			52,218			51,913			52,628			51,955


Cash dividends declared per common share	$	0.07		$	0.07		$	0.21		$	0.21		$	0.09		$	0.07

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	For the Nine Months Ended						For the Quarter Ended
	October 31,			November 1,			May 1,			May 2,
	2009			2008			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings	$	64,426		$	57,355		$	13,608		$	5,256

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		64,879			68,699			18,690			22,222
Tuxedo rental product amortization		33,149			31,739			6,978			7,644
(Gain) loss on disposition of assets		2,012			(212	)
Loss on disposition of assets								219			1,768
Deferred rent expense		1,640			2,586			830			378
Share-based compensation		7,603			7,333			2,637			2,732
Deferred tax (benefit) provision		(8,130	)		1,984
(Increase) decrease in accounts receivable		(769	)		71
Excess tax benefits from share-based plans								(763	)		(20	)
Deferred tax provision								6,412			3,009
Increase in accounts receivable								(7,813	)		(8,480	)
Increase in inventories		(27,051	)		(9,953	)		(1,103	)		(6,194	)
Increase in tuxedo rental product		(34,871	)		(35,644	)		(5,240	)		(30,370	)
Decrease in other assets		29,919			1,110
Increase (decrease) in accounts payable, accrued expenses and other current liabilities		6,214			(21,390	)
(Increase) decrease in other assets								(478	)		3,332
Increase in accounts payable, accrued expenses and other current liabilities								36,592			52,011
Increase (decrease) in income taxes payable		25,242			(13,879	)		(20,683	)		10,714
Decrease in other liabilities		(1,863	)		(1,738	)		(612	)		(700	)


Net cash provided by operating activities		162,400			88,061			49,274			63,302


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(44,466	)		(69,485	)		(11,099	)		(15,035	)
Purchases of available-for-sale investments		—			(17,434	)
Proceeds from sales of available-for-sale investments		19,410			59,921
Other investing activities		—			175


Net cash used in investing activities		(25,056	)		(26,823	)		(11,099	)		(15,035	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		3,032			2,359			783			506
Proceeds from revolving credit facility		—			150,600
Payments on revolving credit facility		(25,000	)		(105,975	)		—			(25,000	)
Payments on Canadian term loan		—			(31,880	)
Cash dividends paid		(11,029	)		(10,936	)		(4,756	)		(3,664	)
Tax payments related to vested deferred stock units		(1,634	)		(1,402	)		(2,656	)		(1,627	)
Excess tax benefits from share-based plans		208			125			763			20
Purchase of treasury stock		(90	)		(156	)		(144	)		(90	)


Net cash (used in) provided by financing activities		(34,513	)		2,735
Net cash used in financing activities								(6,010	)		(29,855	)


Effect of exchange rate changes		8,295			(19,082	)		1,379			1,714


INCREASE IN CASH AND CASH EQUIVALENTS		111,126			44,891			33,544			20,126
Balance at beginning of period		87,412			39,446			186,018			87,412


Balance at end of period	$	198,538		$	84,337		$	219,562		$	107,538

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 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 ~~31, 2009.~~30, 2010.

The preparation of the condensed consolidated financial statements in conformity with accounting principals 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.

~~Fair Value of Financial Instruments —~~Our financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, accrued expenses and other current liabilities and long-term debt. Management estimates that, as of October 31, 2009 and January 31, 2009, the fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the highly liquid or short-term nature of these instruments. The investments classified as short-term investments at November 1, 2008 and January 31, 2009, are carried at fair value based on quoted market prices for such financial instruments. The fair values of long-term debt approximate their carrying amounts as of October 31, 2009 and January 31, 2009, based upon terms available to us for borrowings with similar arrangements and remaining maturities.2. Earnings per Common Share

~~Gift cards and gift card breakage —~~Proceeds from the sale of gift cards are recorded as a liability and are recognized as net sales from products and services when the cards are redeemed. Our gift cards do not have an expiration date. Prior to the second quarter of 2009, all unredeemed gift card proceeds were reflected as a liability until escheated in accordance with applicable laws and we did not recognize any income from unredeemed gift cards. During the second quarter of 2009, we entered into an agreement with an unrelated third party who assumed our liability for unredeemed gift cards that had not yet reached their statutory escheatment term. As a result of this agreement, we are no longer subject to certain third-party claims for unredeemed gift cards. Accordingly, beginning with the second quarter of 2009, we recognize income from breakage of gift cards when the likelihood of redemption of the gift card is remote. We determine our gift card breakage rate based upon historical redemption patterns. Based on this historical information, the likelihood of a gift card remaining unredeemed can be determined 36 months after the gift card is issued. At that time, breakage income is recognized for those cards for which the likelihood of redemption is deemed to be remote and for which there is no legal obligation for us to remit the value of such unredeemed gift cards to any relevant jurisdictions. Gift card breakage income is recorded as other operating income and is classified as a reduction of “Selling, general and administrative expenses” in our condensed consolidated statement of earnings. Pretax breakage income of $3.3 million ($2.1 million after tax or $0.04 per dilutedcalculate earnings per common ~~share) was recognized during~~share using the nine months ended October 31, 2009. Pretax breakage income of $0.2 million ($0.1 million after tax) was recognized during the three months ended October 31, 2009, with no effect on that quarter’s diluted earnings per common share. Gift card breakage estimates are reviewed on a quarterly basis.

~~Recently Issued Accounting Pronouncements —~~In June 2009, the Financial Accounting Standards Board (“FASB”) issued a standard regarding the FASB Accounting Standards Codification (“Codification”) and the hierarchy of generally accepted accounting principles (“GAAP”). This standard identifies the source of accounting principles and the framework for selecting the principles used in the preparation of financial statements of non-governmental entities that are presented in conformity with GAAP in the United States. In addition, this standard establishes the FASB Codification as the source of authoritative GAAP recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP. All guidance contained in the Codification carries an equal level of authority.

~~THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~
~~(Unaudited)~~

This standard is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this standard did not have an impact on our financial position, results of operations or cash flows, but will affect our financial reporting process by eliminating all references to pre-codification standards. On the effective date of this standard, the Codification superseded all then-existing non-SEC accounting and reporting standards, and all other non-grandfathered, non-SEC accounting literature not included in the Codification became non-authoritative.

In May 2009, the FASB issued a standard regarding accounting for subsequent events. This standard is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires disclosure of the date through which an entity has evaluated subsequent events and the basis for selecting that date, that is, whether that date represents the date the financial statements were issued or were available to be issued. This standard is effective for interim periods ending after June 15, 2009. As this standard amends only the disclosure requirements about subsequent events, its adoption did not affect our financial position, results of operations or cash flows. We have evaluated subsequent events through December 9, 2009, which is the date the condensed consolidated financial statements were issued.

In April 2009, the FASB issued guidance regarding interim disclosures about fair value of financial instruments. This guidance requires disclosures about fair value of financial instruments in interim reporting periods of publicly traded companies that were previously only required to be disclosed in annual financial statements. This guidance is effective for interim periods ending after June 15, 2009. As this guidance amends only the disclosure requirements about fair value of financial instruments in interim periods, its adoption did not affect our financial position, results of operations or cash flows. Refer to “Fair Value of Financial Instruments” included within this Note 1 for disclosures regarding fair value measurements.

In June 2008, the FASB issued guidance regarding accounting by lessees for maintenance deposits. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. This guidance concluded that all maintenance deposits within its scope should be accounted for as a deposit and expensed or capitalizedtwo-class method in accordance with the ~~lessee’s maintenance accounting policy. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.~~

~~In June 2008, the FASB issued~~ guidance for determining whether instruments granted in share-based payment transactions are participating securities, which provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per common share pursuant to the two-class method. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior period earnings per common share data presented shall be adjusted retrospectively. Early application of this guidance is prohibited. We adopted this guidance on February 1, 2009. We calculated basic and diluted earnings per common share under both the two-class method and the treasury stock method for the three and nine months ended October 31, 2009, noting no significant difference on the basic and diluted earnings per common share calculations. This guidance has not been applied to prior year quarters as the impact is immaterial. Refer to Note 2 for earnings per common share disclosures.

In December 2007, the FASB issued a revised standard regarding accounting for business combinations. This standard establishes principles and requirements for how a company recognizes assets acquired, liabilities assumed, contractual contingencies and contingent consideration measured at fair value at the acquisition date. The standard also establishes disclosure requirements which will enable users to evaluate the nature and financial effect of the business combination. This standard is effective for fiscal years beginning after December 15, 2008. We adopted this standard on February 1, 2009. There was no impact upon adoption, and its effects on future periods will depend on the nature and significance of any future acquisitions by the Company, if any.

In February 2008, the FASB issued guidance, which deferred the effective date of the FASB statement regarding fair value measurements for all non-financial assets and non-financial liabilities for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years for items within the scope of this guidance. We adopted this guidance for non-financial assets and non-financial liabilities on February 1, 2009. The adoption of this guidance did not have a material impact to our financial position, results of operations or cash flows.

~~THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~
~~(Unaudited)~~

~~2. Earnings per Share~~

~~As described in Note 1, “~~~~Recently Issued Accounting Pronouncements”,~~~~we adopted the FASB’s guidance regarding the~~ determination of whether instruments granted in share-based payment transactions are participating ~~securities on February 1, 2009.~~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. 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. We calculated basic and diluted earnings per common share under both the two-class method and the treasury stock method for the three and nine months ended October 31, 2009, noting no significant difference on the basic and diluted earnings per common share calculations. This guidance has not been applied to prior year quarters as the impact is immaterial.

Basic earnings per common share 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 reflects the more dilutive earnings per common share amount calculated using the treasury stock method or the two-class method. ~~The treasury stock method continues to be disclosed for the three and nine months ended November 1, 2008.~~

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share amounts). Basic and diluted earnings per common share 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 in our condensed consolidated statement of earnings and the accompanying notes.


	For the Three Months					For the Nine Months
	Ended					Ended
	October 31,			November 1,		October 31,			November 1,		For the Quarter Ended
	2009			2008		2009			2008		May 1, 2010			May 2, 2009
Numerator
Net earnings	$	19,685		$	14,587	$	64,426		$	57,355	$	13,608		$	5,256
Net earnings allocated to participating securities (restricted stock and deferred stock units)		(196	)		—		(638	)		—		(121	)		(51	)


Net earnings available to common shareholders	$	19,489		$	14,587	$	63,788		$	57,355	$	13,487		$	5,205

Denominator
Basic weighted average common shares outstanding		52,208			51,703		52,072			51,604		52,417			51,895
Effect of dilutive securities:
Stock options and equity-based compensation		234			308		146			309		211			60

Diluted weighted average common shares outstanding		52,442			52,011		52,218			51,913		52,628			51,955


Net earnings per common share:
Basic	$	0.37		$	0.28	$	1.23		$	1.11	$	0.26		$	0.10

Diluted	$	0.37		$	0.28	$	1.22		$	1.10	$	0.26		$	0.10

~~THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~
~~(Unaudited)~~

3. ~~Long-Term~~ Debt

Our Amended and Restated Credit Agreement (the “Credit Agreement”) with a group of banks, which was last amended on February 2, 2007, provides for a total senior secured revolving credit facility of $200.0 million, which can be expanded to $250.0 million upon additional lender commitments, that matures on February 11, 2012. The Credit Agreement also provided our Canadian subsidiaries with a senior secured term loan used to fund the repatriation of US$74.7 million of Canadian earnings in January 2006 under the American Jobs Creation Act of 2004. The Canadian term loan matures on February 10, 2011. The Credit Agreement is secured by the stock of certain of the Company’s subsidiaries. The Credit Agreement has several borrowing and interest rate options including the following indices: (i) an alternate base rate (equal to the greater of the prime rate or the federal funds rate plus 0.5%) or (ii) LIBO rate or (iii) CDO rate. Advances under the Credit Agreement bear interest at a rate per annum using the applicable indices plus a varying interest rate margin up to 1.125%. The Credit Agreement also provides for fees applicable to unused commitments ranging from 0.100% to 0.175%. As of ~~October 31, 2009,~~May 1, 2010, there was US$~~43.0~~45.8 million outstanding under the Canadian term loan with an effective interest rate of ~~1.3%,~~1.2% and no borrowings outstanding under the revolving credit facility.

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 31, 2009.~~May 1, 2010.

~~Adverse conditions~~Conditions in the U.S. and global credit markets have made it difficult for many businesses to obtain financing on acceptable terms. If these ~~adverse~~ market conditions continue or worsen, it may be more difficult for us to renew or increase our credit facility.

~~We utilize letters of credit primarily to secure inventory purchases. At October 31, 2009, letters of credit totaling approximately $12.6 million were issued and outstanding.~~

~~4. Comprehensive Income (Loss) and Supplemental Cash Flows~~

~~Our comprehensive income (loss) is as follows (in thousands):~~

For the Three Months Ended For the Nine Months Ended
October 31, November 1, October, 31, November, 1
2009 2008 2009 2008
Net earnings $ 19,685 $ 14,587 $ 64,426 $ 57,355
Currency translation adjustments, net of tax (785 ) (22,284 ) 18,911 (27,008 )

Comprehensive income (loss) $ 18,900 $ (7,697 ) $ 83,337 $ 30,347

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

We utilize letters of credit primarily to secure inventory purchases and as collateral for workers compensation claims. At May 1, 2010, letters of credit totaling approximately $11.6 million were issued and outstanding. Borrowings available under our Credit Agreement at May 1, 2010 were $188.4 million.

4. Comprehensive Income and Supplemental Cash Flows

Our comprehensive income is as follows (in thousands):


	For the Quarter Ended
	May 1, 2010		May 2, 2009
Net earnings	$	13,608	$	5,256
Currency translation adjustments, net of tax		4,767		4,763


Comprehensive income	$	18,375	$	10,019

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


	For the Nine Months Ended						For the Quarter Ended
	October 31,			November 1,			May 1, 2010		May 2, 2009
	2009			2008
Cash paid (received) during the nine months for:
Cash paid (received) during the quarter for:
Interest	$	827		$	3,431		$	212	$	333
Income taxes, net		(3,518	)		46,689			24,795		(10,238	)

Schedule of noncash investing and financing activities:
Tax deficiency related to share-based plans		(537	)		(710	)
Treasury stock contributed to employee stock plan		—			1,000
Tax benefit (deficiency) related to share-based plans								526		(979	)
Cash dividends declared								4,757		3,664

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

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~~quarter of ~~2009.~~2010.

The gross carrying amount and accumulated amortization of our other intangibles, which are included in other assets in the accompanying balance sheet, are as follows (in thousands):


	October 31,			November 1,			January 31,
	2009			2008			2009			May 1, 2010			May 2, 2009			January 30, 2010
Trademarks, tradenames, favorable leases and other intangibles	$	16,327		$	17,064		$	17,037		$	14,511		$	16,991		$	15,305
Accumulated amortization		(11,048	)		(8,692	)		(9,330	)		(11,286	)		(10,058	)		(11,018	)

Net total	$	5,279		$	8,372		$	7,707		$	3,225		$	6,933		$	4,287

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

The pretax amortization expense associated with intangible assets totaled approximately $1.7 million and $1.9 million for the nine months ended October 31, 2009 and November 1, 2008, respectively, and approximately $2.6 million for the year ended January 31, 2009. Pretax amortization associated with intangible assets at October 31, 2009 is estimated to be $0.5 million for the remainder of fiscal year 2009, $1.5 million for fiscal year 2010, $1.2 million for fiscal year 2011, $0.8 million for fiscal year 2012 and $0.7 million for fiscal year 2013.

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

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

October 31, November 1, January 31,
2009 2008 2009
Prepaid expenses $ 25,773 $ 26,831 $ 26,603
Current deferred tax asset 19,175 10,641 11,812
Tax receivable 91 18,548 24,335
Other 3,958 10,203 7,918

Total other current assets $ 48,997 $ 66,223 $ 70,668

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

Accrued salary, bonus, sabbatical and vacation $ 32,509 $ 32,014 $ 36,865
Sales, payroll and property taxes payable 15,227 15,612 14,887
Unredeemed gift certificates 12,351 15,519 17,801
Accrued workers compensation and medical costs 16,772 12,669 14,790
Tuxedo rental deposits 10,204 9,597 9,171
Other 19,019 16,936 17,890

Total accrued expenses and other current liabilities $ 106,082 $ 102,347 $ 111,404

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

Deferred rent and landlord incentives $ 44,695 $ 44,546 $ 44,204
Non-current deferred and other income tax liabilities 11,337 14,341 11,807
Other 7,055 6,787 6,432

Total deferred taxes and other liabilities $ 63,087 $ 65,674 $ 62,443

7. Treasury Stock

As of ~~October 31, 2009,~~May 1, 2010, we had ~~18,111,602~~18,118,736 shares held in treasury stock. The change in our treasury shares for the year ended January ~~31, 2009~~30, 2010 and for the ~~nine months~~quarter ended ~~October 31, 2009~~May 1, 2010 is provided below:


	Treasury
	Shares
~~Balance, February 2, 2008~~		~~18,154,660~~
~~Treasury stock issued to profit sharing plan~~		~~(57,078~~	)
~~Purchases of treasury stock~~		~~6,728~~

Balance, January 31, 2009		18,104,310
Purchases of treasury stock		7,292

Balance, ~~October 31, 2009~~January 30, 2010		18,111,602
Purchases of treasury stock		7,134

Balance, May 1, 2010		18,118,736

~~THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~
~~(Unaudited)~~

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 million by authorizing $90.3 million to be added to the remaining $9.7 million of the then current program. No shares were purchased under the August 2007 authorization during the first ~~nine months~~quarter of ~~2009~~2010 or ~~2008.~~2009. At ~~October 31, 2009,~~May 1, 2010, the remaining balance available under the August 2007 authorization was $44.3 million.

~~During~~For the ~~nine months~~quarter ended ~~October 31,~~May 1, 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. For the quarter ended May 2, 2009, 7,292 shares at a cost of $0.1 million were repurchased at an average price per share of $12.29 in a private transaction to satisfy tax withholding obligations arising upon the vesting of certain restricted stock. During the nine months ended November 1, 2008, 6,728 shares at a cost of $0.2 million were repurchased at an average price per share of $23.13 in a private transaction to satisfy tax withholding obligations arising upon the vesting of certain restricted stock.

8. 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~~quarter ended May 1, 2010 and ~~nine months ended October 31,~~May 2, 2009 ~~was $2.4 million and $7.6 million, respectively. Share-based compensation expense recognized for the three and nine months ended November 1, 2008~~ was $2.6 million and ~~$7.3~~$2.7 million, respectively.

Stock Options

The following table summarizes stock option activity for the ~~nine months~~quarter ended ~~October 31, 2009:~~May 1, 2010:


				Weighted-					Weighted-
				Average					Average
				Exercise					Exercise
	Shares			Price		Shares			Price
Outstanding at January 31, 2009		1,661,858		$	19.95
Outstanding at January 30, 2010							1,642,905		$	20.29
Granted		140,322			17.31		—			—
Exercised		(117,685	)		13.54		(18,461	)		15.55
Expired		(8,040	)		16.00		(5,355	)		20.91

Outstanding at October 31, 2009		1,676,455		$	20.20
Outstanding at May 1, 2010							1,619,089		$	20.34

Exercisable at October 31, 2009		575,143		$	17.78
Exercisable at May 1, 2010							776,578		$	18.46

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

The weighted-average grant date fair value of the 140,322 stock options granted during the nine months ended October 31, 2009 was $7.22 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 nine months ended October 31, 2009. No stock options were granted during the three months ended October 31, 2009.


		~~For the nine~~
		~~months~~
		~~ended~~
	��	~~October 31,~~
		~~2009~~
~~Risk-free interest rate~~			~~2.21~~	%
~~Expected lives~~		~~6.9 years~~
~~Dividend yield~~			~~1.99~~	%
~~Expected volatility~~			~~50.83~~	%

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 31, 2009,~~May 1, 2010, we have unrecognized compensation expense related to nonvested stock options of approximately ~~$6.6~~$5.9 million which is expected to be recognized over a weighted average period of ~~3.2~~3.1 years.

Restricted Stock and Deferred Stock Units

The following table summarizes restricted stock and deferred stock unit activity for the ~~nine months~~quarter ended ~~October 31, 2009:~~May 1, 2010:


				Weighted-					Weighted-
				Average					Average
				Grant-Date					Grant-Date
	Shares			Fair Value		Shares			Fair Value
Nonvested at January 31, 2009		545,237		$	26.34
Nonvested at January 30, 2010							506,133		$	22.35
Granted		275,905			17.92		315,268			24.17
Vested (1)		(289,183	)		27.39		(327,945	)		21.19
Forfeited		(3,125	)		18.23		(950	)		19.35

Nonvested at October 31, 2009		528,834		$	21.42
Nonvested at May 1, 2010							492,506		$	24.29

~~THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~
~~(Unaudited)~~

Employee ~~Profit Sharing and~~ Stock Purchase Plan

We have a defined contribution Employee Stock Ownership Plan (“ESOP”) which provides eligible employees with future retirement benefits. Contributions to the ESOP are made at the discretion of the Board of Directors. No contributions were charged to operations in fiscal 2008 or 2009. In October 2009, the Board of Directors of the Company approved the termination of the ESOP, effective as of October 15, 2009. Each participant and former participant in the ESOP who has an account balance under the ESOP on January 1, 2009, which was not fully vested on that date will become fully vested in the amount credited to his or her account under the ESOP together with any amounts thereafter allocated and credited to such account prior to its distribution. Annual expense associated with the ESOP is approximately $0.1 million. We do not expect the termination of the ESOP to significantly affect our consolidated financial statements.

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~~quarter ended ~~October 31, 2009,~~May 1, 2010, employees purchased ~~108,102~~27,412 shares under the ESDP, which had a weighted-average share price of ~~$13.31~~$18.10 per share. As of ~~October 31, 2009, 1,207,758~~May 1, 2010, 1,150,088 shares were reserved for future issuance under the ESDP.

9. Fair Value Measurements

Our financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, accrued expenses and other current liabilities, current maturities of long-term debt and long-term debt. Management estimates that, as of May 1, 2010 and January 30, 2010, the fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the highly liquid or short-term nature of these instruments. The investments classified as short-term investments at May 2, 2009 are carried at fair value based on quoted market prices for such financial instruments. The fair values of current maturities of long-term debt at May 1, 2010 and of long-term debt at January 30, 2010 approximate their carrying amounts based upon terms available to us for borrowings with similar arrangements and remaining maturities.

1310

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

~~9. Manufacturing Facility Closure~~

~~On March 3, 2008, we announced~~ Long-lived assets, such as property and equipment and identifiable intangibles with finite useful lives, are periodically evaluated for impairment whenever events or changes in circumstances indicate that ~~Golden Brand Clothing (Canada) Ltd.,~~the carrying amount of an ~~indirect wholly owned subsidiary~~asset may not be recoverable. If the asset carrying amount exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the ~~Company, intended to close its Montreal, Quebec-based manufacturing facility.~~asset. The ~~facility was closed~~fair values of long-lived assets held-for-use are based on ~~July 11, 2008.~~

~~In fiscal 2008, we recognized pretax costs of $10.0 million for closure of~~our own judgments about the ~~facility, including $6.6 million for severance payments, $1.1 million~~assumptions that market participants would use in pricing the asset and on observable market data, when available. We classify these measurements as Level 3 within the fair value hierarchy. No impairment charges were recorded for the ~~write-off~~carrying value of ~~fixed~~long-lived assets $1.6 million for lease termination payments and approximately $0.7 million for other costs related to closing the facility. As of November 1, 2008, we had recognized the total pretax cost of $10.0 million recorded in fiscal 2008 for the closure of the facility. These charges are included in “Selling, general and administrative expenses” in our condensed consolidated statement of earnings. No charges were recognized for the three and nine months ended October 31, 2009. The accrued balance of $0.4 million at October 31, 2009 for closure of the facility relates to the remaining lease termination payments which will be paid over the remaining term of the lease through February 2010.

~~The following table details information related to the accrued balance recorded~~ during the ~~three months ended October 31, 2009 related to the closure~~first quarter of ~~the Montreal manufacturing facility (in thousands):~~

Accrued costs at August 1, 2009 $ 607
Cash payments (248 )
Translation adjustment (2 )

Accrued costs at October 31, 2009 $ 357

The following table details information related to the accrued balance recorded during the nine months ended October 31, 2009 related to the closure of the Montreal manufacturing facility (in thousands):

Accrued costs at January 31, 2009 $ 971
Cash payments (723 )
Translation adjustment 109

Accrued costs at October 31, 2009 $ 357

~~THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~
~~(Unaudited)~~2010.

10. Legal Matters

On October 8, 2009, the Company was named in a federal securities class action lawsuit filed in the United States District Court for the Southern District of Texas, Houston Division. The case is styledMaterial Yard Workers Local 1175 Benefit Funds, et al. v. The Men’s Wearhouse, Inc., Case No. 4:09-cv-03265. The class period alleged in the complaint runs from March 7, 2007 to January 9, 2008. The primary allegations are that the Company issued false and misleading press releases regarding its guidance for fiscal year 2007 on various occasions during the alleged class period. The complaint seeks damages based on the decline in the Company’s stock price following the announcement of lowered guidance on Oct. 10, 2007, Nov. 28, 2007, and Jan. 9, 2008. The case is in its early stages and discovery has not ~~begun, and the court has not yet appointed lead plaintiffs or lead counsel for the putative shareholder class.~~begun. The Company believes the lawsuit is without merit and intends to mount a vigorous defense; we are unable to determine the likely outcome at this time.

We are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management believes that none of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

11. Supplemental Sales Information (in thousands)


	For the Three Months Ended				For the Nine Months Ended
	October 31,		November 1,		October 31,		November 1,		For the Quarter Ended
	2009		2008		2009		2008		May 1, 2010		May 2, 2009
Net sales:
Men’s tailored clothing product	$	180,070	$	174,579	$	569,611	$	578,447	$	197,094	$	191,767
Men’s non-tailored clothing product		133,507		140,347		422,147		465,616		145,701		142,659
Ladies clothing product		16,594		14,666		55,071		48,019		21,895		20,715
Corporate apparel uniform product		3,711		4,823		10,417		16,932
Corporate apparel and uniform product										3,681		3,921

Total clothing product		333,882		334,415		1,057,246		1,109,014		368,371		359,062


Tuxedo rental services		97,702		96,498		298,688		294,145		72,154		71,419

Alteration services		25,002		23,225		79,755		75,802		27,152		27,965
Retail dry cleaning services		5,429		5,535		16,668		17,097		5,789		5,688

Total alteration and other services		30,431		28,760		96,423		92,899		32,941		33,653


Total net sales	$	462,015	$	459,673	$	1,452,357	$	1,496,058	$	473,466	$	464,134


Net sales by brand:
MW (1)	$	317,584	$	315,607	$	987,546	$	1,006,229	$	318,340	$	310,923
K&G		79,329		80,415		277,442		277,442		98,260		104,516
Moores		55,962		53,293		160,284		178,358		47,396		39,086
MW Cleaners (2)		5,429		5,535		16,668		17,097		5,789		5,688
Twin Hill (3)		3,711		4,823		10,417		16,932		3,681		3,921

									$	473,466	$	464,134
Total net sales	$	462,015	$	459,673	$	1,452,357	$	1,496,058

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

For supplemental information, it is suggested that “Management’s Discussion and Analysis of Financial Condition and Results of Operations” be read in conjunction with the corresponding section included in our Annual Report on Form 10-K for the year ended January ~~31, 2009.~~30, 2010. References herein to years are to our 52-week or 53-week fiscal year which ends on the Saturday nearest January 31 in the following calendar year. For example, references to ~~“2009”~~“2010” mean the 52-week fiscal year ending January ~~30, 2010.~~29, 2011.

The following table presents information with respect to retail apparel stores in operation during each of the respective fiscal periods:


													For the									For the Year
	For the Three Months Ended						For the Nine Months Ended						Year Ended			For the Quarter Ended						Ended
	October 31,			November 1,			October 31,			November 1,			January 31,			May 1,			May 2,			January 30,
	2009			2008			2009			2008			2009			2010			2009			2010
Stores open at beginning of period:		1,278			1,287			1,294			1,273			1,273			1,259			1,294			1,294
Opened		1			16			4			40			43			1			2			6
Closed		(5	)		(5	)		(24	)		(15	)		(22	)		(8	)		(12	)		(41	)

Stores open at end of period		1,274			1,298			1,274			1,298			1,294			1,252			1,284			1,259


Stores open at end of period:
U.S. —
Men’s Wearhouse		581			579			581			579			580			582			581			581
Men’s Wearhouse & Tux		469			495			469			495			489			447			478			454
K&G		107			107			107			107			108			106			108			107

		1,157			1,181			1,157			1,181			1,177			1,135			1,167			1,142

Canada —
Moores		117			117			117			117			117			117			117			117

		1,274			1,298			1,274			1,298			1,294			1,252			1,284			1,259

~~Our results~~We had revenues of ~~operations~~$473.5 million and net earnings of $13.6 million for the ~~three~~quarter ended May 1, 2010, compared to revenues of $464.1 million and ~~nine months~~net earnings of $5.3 million for the quarter ended ~~October 31, 2009~~May 2, 2009. Although high unemployment levels and tight credit conditions in the U.S. continued ~~to be impacted~~into 2010, we increased our revenues by ~~a depressed economic~~$9.3 million or 2.0% and ~~retail environment as unemployment increased and consumer spending remained weak. We continued efforts to stimulate sales with discounts and promotional events as we also managed~~ our ~~inventory purchases, maintained expense control efforts and reduced capital expenditures.~~gross margin by $13.1 million or 7.0%. We closed 24eight stores ~~(21 tux rental stores, two~~(one K&G store and seven Men’s Wearhouse ~~stores and one K&G store) that~~& Tux stores), of which seven had reached the end of their lease terms, and opened one Men’s Wearhouse store during the ~~nine months ended October 31, 2009. Based on~~first quarter of 2010. We plan to continue our ~~experience~~efforts to stimulate sales with ~~previous economic downturns, we believe long-term fundamentals for the men’s specialty apparel industry remain strong~~discounts and ~~that current negative conditions will stabilize over time. However, we cannot predict when a meaningful recovery will occur.~~

Our comparable store sales (which are calculated by excluding the net sales of a store for any month of one period if the store was not open throughout the same month of the prior period) ~~decreased 0.2%~~increased 2.4% at Men’s Wearhouse as ~~the impact of lower~~improved store traffic levels more than offset ~~the effect of increases~~a decrease in units per transaction ~~driven by our promotional activities,~~ and ~~the~~a lower average transaction value. At Moores, comparable store ~~traffic levels were also lower than in the prior year quarter, but promotion-driven increases~~sales increased a slight 0.2% due mainly to a higher average transaction value which offset a decrease in units per transaction and ~~an increased average transaction value were more than offsetting and resulted in a~~lower store traffic levels. At K&G, comparable store sales ~~increase of 1.9%. Comparable store sales~~ decreased ~~1.1% at K&G as decreases~~4.9% due mainly to a decrease in ~~units per transaction and~~the average transaction value more than offset an increase in store traffic. The continuation of negative macroeconomic conditions, including high unemployment, particularly affected sales of men’s apparel as buying patterns for men are considered to be more discretionary than those in other apparel areas.value. Tuxedo rental service revenues as a percentage of total net sales decreased slightly from 15.4% in the first quarter of 2009 to 15.2% in the first quarter of 2010; however, in absolute dollars, tuxedo rental service revenues increased ~~slightly from 21.0% in the third quarter of 2008 to 21.1% in the third quarter of 2009. Alteration services revenues also increased~~$0.7 million or 1.0% due mainly to ~~the increases~~a 2.5% increase in units ~~per transaction at Men’s Wearhouse and Moores.~~rented, offset partially by lower average rental rates in the U.S.

Total gross margin ~~of $202.7 million for the quarter ended October 31, 2009 was unchanged~~increased 7.0% from the same prior year ~~quarter. However, as~~quarter to $201.1 million in the first quarter of 2010. As a percentage of sales, total gross margin ~~decreased~~increased from ~~44.1%~~40.5% in the ~~third~~first quarter of ~~2008~~2009 to ~~43.9%~~42.5% in the ~~third~~first quarter of ~~2009.~~2010. This ~~decrease was~~increase is due mainly to ~~lower~~improved clothing product margins, offset partially by an improved alteration services margin. As a percentage of related sales, the clothing product gross margin decreased from 57.0% in 2008 to 55.9% in 2009 due primarily to higher markdowns from increased promotional activities at our Men’s Wearhouse and Moores stores. The gross margin for alteration and other services increased from 17.7% in 2008 to 24.1% in 2009 mainly as a result of reduced alteration costs combined with increased alteration sales associated with the increased unit sales from our promotional events. The tuxedo rental ~~services gross margin decreased slightly~~margins and a decrease from ~~83.2%~~15.6% in ~~2008~~the first quarter of 2009 to ~~83.1%~~14.7% in ~~2009. Occupancy~~the first quarter of 2010 for occupancy cost, which is relatively constant on a per store basis and includes store related rent, common area maintenance, utilities, repairs and maintenance, security, property taxes and ~~depreciation, decreased from 15.9% of total sales in the third quarter of 2008 to 15.7% in the third quarter of 2009.~~depreciation. On an absolute dollar basis, occupancy ~~costs~~cost decreased by ~~1.2%~~$2.9 million or 4.0% from the ~~third quarter of 2008 to the third~~first quarter of 2009 to the first quarter of 2010 primarily due to fewer open stores in 2010 and reduced depreciation following impairment charges taken in the fourth quarter of 2009. With respect to gross margin as a percentage of related sales, clothing product gross margin increased from 53.4% in first quarter 2009 to 54.6% in first quarter 2010 due primarily to different promotional offerings, as well as the mix of products on promotion, in 2010 compared to 2009 and lower product costs. The tuxedo rental services gross margin increased from 83.2% in first quarter 2009 to 84.3% in first quarter 2010 due mainly to ~~lower rent expense~~a decrease in rental product retirement costs in 2010. The gross margin for alteration and other services decreased from ~~our~~28.4% in first quarter 2009 to 26.9% in first quarter 2010 mainly as a result of decreased ~~store count.~~alteration sales associated with decreased suit unit sales in 2010.


%			Attributed to

	~~0.7~~(0.4	)		~~Increase~~Decrease in advertising expense as a percentage of sales from ~~3.2%~~4.8% in the ~~third~~first quarter of ~~2008~~2009 to ~~3.9%~~4.4% in the ~~third~~first quarter of ~~2009.~~2010. On an absolute dollar basis, advertising expense ~~increased $3.2~~decreased $1.3 million.
	(~~0.3~~0.1	)	Decrease in store salaries as a percentage of sales from ~~15.3%~~14.8% in the ~~third~~first quarter of ~~2008~~2009 to ~~15.0%~~14.7% in the ~~third~~first quarter of ~~2009.~~2010. Store salaries on an absolute dollar basis ~~decreased $1.2 million primarily due to decreased personnel.~~increased $0.8 million.
	(~~0.4~~	)	Decrease in other SG&A expenses of $1.8 million due to the absence in 2009 of costs incurred in the third quarter of 2008 in connection with the July 11, 2008 closure of the Canadian based manufacturing facility operated by the Company’s subsidiary, Golden Brand.
	~~(1.5~~0.2	)	Decrease in other SG&A expenses as a percentage of sales from ~~20.0%~~19.0% in the ~~third~~first quarter of ~~2008~~2009 to ~~18.5%~~18.8% in the ~~third~~first quarter of ~~2009.~~2010. On an absolute dollar basis, other SG&A expenses ~~decreased $6.6 million primarily due to the continuation of cost control efforts initiated in the fourth quarter of 2008.~~increased $0.9 million.

	(~~1.5~~0.7	)%	Total

Interest expense decreased from ~~$1.0~~$0.4 million in the ~~third~~first quarter of ~~2008~~2009 to $0.3 million in the ~~third~~first quarter of ~~2009,~~2010 while interest income decreased from ~~$0.7 million in the third quarter of 2008 to~~ $0.3 million in the ~~third~~first quarter of ~~2009.~~2009 to $34 thousand in the first quarter of 2010. Weighted average borrowings outstanding decreased from ~~$80.0~~$61.9 million in the ~~third~~first quarter of ~~2008~~2009 to ~~$42.8~~$45.4 million in the ~~third~~first quarter of ~~2009,~~2010, and the weighted average interest rate on outstanding indebtedness decreased from ~~4.5%~~2.2% to ~~1.9%~~1.5%. The decrease in the weighted average borrowings and the weighted average interest rate was due to the ~~voluntary~~ repayment of ~~a portion of~~ our ~~Canadian term loan in October 2008 of approximately US$31.9 million and payments~~outstanding balance on our revolving credit facility of $25.0 million ~~during~~in the first quarter of 2009. The weighted average interest rate for the third quarter of 2009 decreased mainly due to a decrease in the effective interest rate for the Canadian term loan from 3.3% at November 1, 2008 to 1.3% at October 31, 2009. The decrease in interest income was primarily attributable to a shift in our investments and lower interest rates for the ~~third~~first quarter of ~~2009~~2010 as compared to the ~~third~~first quarter of ~~2008.~~2009.

~~The Company’s net sales decreased $43.7 million, or~~ 2.9%, to $1,452.4 million for the nine months ended October 31, 2009. The decrease was due mainly to a $51.8 million decrease in clothing product sales, offset partially by a $4.5 million increase in tuxedo rental services and a $4.0 million increase in alteration services, and is attributable to the following:

(in millions) Amount Attributed to

$ (33.1 ) Decrease in comparable sales.
13.5 Increase from net sales of stores opened in 2008, relocated stores and expanded stores not yet included in comparable sales.
4.0 Increase in alteration services sales.
(7.9 ) Decrease in corporate apparel and other sales.
(6.8 ) Decrease in net sales resulting from stores closed.
1.9 Increase in net sales from 4 new stores opened in 2009.
(15.3 ) Decrease in net sales resulting from exchange rate changes.

$ (43.7 )
Total

Our comparable store sales decreased 3.0% at Men’s Wearhouse and 1.9% at Moores as moderate increases in units per transaction and the average transaction value, driven by our promotional activities, were more than offset by lower store traffic levels. At K&G, comparable store sales decreased 0.8% primarily due to decreases in units per transaction and average transaction value. The continuation of negative macroeconomic conditions, including high unemployment, particularly affected sales of men’s apparel as buying patterns for men are considered to be more discretionary than those in other apparel areas. The lower clothing product sales were partially offset by increased revenues from our tuxedo rental services due mainly to higher average rental rates. As a percentage of total revenues, tuxedo rental service revenues increased from 19.7% in the first nine months of 2008 to 20.6% in the first nine months of 2009. Exchange rate changes from a weaker Canadian dollar also caused total sales for the first nine months of 2009 to be $15.3 million less than the comparable prior year sales.

~~The Company’s gross margin was as follows:~~

For the Nine Months Ended
October 31, November 1,
2009 2008
Gross margin (in thousands) $ 628,451 $ 667,522

Gross margin as a percentage of related sales:
Clothing product, including buying and distribution costs 54.1 % 56.3 %
Tuxedo rental services 83.3 % 83.1 %
Alteration and other services 26.5 % 20.8 %
Occupancy costs (15.0 )% (14.8 )%
Total gross margin 43.3 % 44.6 %

Total gross margin decreased $39.1 million or 5.9% from the same prior year period to $628.5 million in the first nine months of 2009. As a percentage of sales, total gross margin decreased from 44.6% in the first nine months of 2008 to 43.3% in the first nine months of 2009. This decrease is due mainly to lower clothing product margin, offset slightly by improved tuxedo rental and alteration services margins. As a percentage of related sales, the clothing product gross margin decreased from 56.3% in 2008 to 54.1% in 2009 due primarily to higher markdowns from increased promotional activities at our Men’s Wearhouse and Moores stores. The tuxedo rental services gross margin increased slightly from 83.1% in 2008 to 83.3% in 2009 due mainly to the absence in 2009 of costs incurred in the first quarter of 2008 associated with realignment of our tuxedo rental product inventory. The gross margin for alteration and other services increased from 20.8% in 2008 to 26.5% in 2009 mainly as a result of reduced alteration costs combined with increased alteration sales associated with the increased unit sales from our promotional events. Occupancy cost, which is relatively constant on a per store basis and includes store related rent, common area maintenance, utilities, repairs and maintenance, security, property taxes and depreciation, increased from 14.8% of total sales in the first nine months of 2008 to 15.0% in the first nine months of 2009 but, on an absolute dollar basis, decreased by 1.2%.

Selling, general and administrative expenses decreased to $525.7 million in the first nine months of 2009 from $574.5 million in the first nine months of 2008, a decrease of $48.8 million or 8.5%. As a percentage of sales, these expenses decreased from 38.4% in the first nine months of 2008 to 36.2% in the first nine months of 2009. The components of this 2.2% net decrease in SG&A expenses as a percentage of net sales and the related absolute dollar changes were as follows:


%			~~Attributed to~~

	~~0.6~~		Increase in advertising expense as a percentage of sales from 3.4% in the first nine months of 2008 to 4.0% in the first nine months of 2009. On an absolute dollar basis, advertising expense increased $6.8 million.
	~~(0.2~~	)	Decrease in store salaries as a percentage of sales from 14.6% in the first nine months of 2008 to 14.4% in the first nine months of 2009. Store salaries on an absolute dollar basis decreased $9.7 million primarily due to decreased commissions and store personnel due to decreased sales in 2009.
	~~(0.7~~	)	Decrease in other SG&A expenses of $10.0 million due to the absence in 2009 of costs incurred in the first nine months of 2008 in connection with the July 11, 2008 closure of the Canadian based manufacturing facility operated by the Company’s subsidiary, Golden Brand.
	~~(1.9~~	)	Decrease in other SG&A expenses as a percentage of sales from 19.7% in the first nine months of 2008 to 17.8% in the first nine months of 2009. On an absolute dollar basis, other SG&A expenses decreased $35.9 million primarily due to cost control efforts initiated in the fourth quarter of 2008 and the 2009 recognition of $3.3 million in other operating income from gift card breakage. During the second quarter of 2009, we entered into an agreement with an unrelated third party who assumed our liability for unredeemed gift cards that had not yet reached their statutory escheatment term. As a result of this agreement, we are no longer subject to certain third party claims for unredeemed gift cards, which allows us to recognize other income from breakage of gift cards when the likelihood of redemption of the gift cards is remote (see Note 1 of Notes to Condensed Consolidated Financial Statements).
	~~(2.2~~	)%	~~Total~~

Interest expense decreased from $3.6 million in the first nine months of 2008 to $1.0 million in the first nine months of 2009, while interest income decreased from $2.3 million in the first nine months of 2008 to $0.8 million in the first nine months of 2009. Weighted average borrowings outstanding decreased from $94.6 million in the first nine months of 2008 to $48.6 million in the first nine months of 2009, and the weighted average interest rate on outstanding indebtedness decreased from 4.7% to 1.9%. The decrease in the weighted average borrowings was due mainly to the voluntary repayment of a portion of our Canadian term loan in October 2008 of approximately US$31.9 million and payments on our revolving credit facility of $25.0 million during the first quarter of 2009. The weighted average interest rate for the first nine months of 2009 decreased mainly due to a decrease in the effective interest rate for the Canadian term loan from 3.3% at November 1, 2008 to 1.3% at October 31, 2009. The decrease in interest income was primarily attributable to lower interest rates for the first nine months of 2009 as compared to the first nine months of 2008.

Our effective income tax rate was 37.2% for the first nine months of 2009 and 37.4% for the first nine months of 2008. The effective tax rate in 2009 and 2008 differed from the statutory U.S. federal rate of 35% due to various factors including the effect of state income taxes, the conclusion of certain income tax audits, and the recognition of previously unrecognized tax benefits and related accrued interest upon the expiration of the related statute of limitations. During the first nine months of 2009, we recognized $0.6 million of net previously unrecognized tax benefits and associated accrued interest. During the first nine months of 2008, we recognized $1.3 million of net previously unrecognized tax benefits and associated accrued interest.

~~These factors resulted in net earnings of $64.4 million or 4.4%~~ of net sales for the first ~~nine months~~quarter of ~~2009,~~2010, compared with net earnings of ~~$57.4~~$5.3 million or ~~3.8%~~1.1% of net sales for the first ~~nine months~~quarter of ~~2008.~~2009.

Liquidity and Capital Resources

At ~~October 31,~~May 1, 2010, January 30, 2010 and May 2, 2009, ~~January 31, 2009 and November 1, 2008,~~ cash and cash equivalents totaled ~~$198.5~~$219.6 million, ~~$87.4~~$186.0 million and ~~$84.3~~$107.5 million, respectively. We had working capital of ~~$486.3~~$463.9 million, ~~$411.4~~$484.3 million and ~~$442.9~~$383.6 million at ~~October 31,~~May 1, 2010, January 30, 2010 and May 2, 2009, ~~January 31, 2009 and November 1, 2008,~~ respectively, which included short-term investments of ~~$17.1 million and $17.4~~$17.7 million at ~~January 31, 2009 and November 1, 2008, respectively.~~May 2, 2009. We held no short-term investments at ~~October 31, 2009.~~May 1, 2010 or January 30, 2010. Our primary sources of working capital are cash flows from operations and borrowings under our Credit Agreement. Historically, our working capital has been at its lowest level in January and February, and has increased through November as inventory buildup occurs in preparation for the fourth quarter selling season. The ~~$74.9~~$20.4 million ~~increase~~decrease in working capital at ~~October 31, 2009~~May 1, 2010 compared to January ~~31, 2009~~30, 2010 resulted primarily from the current liability classification at quarter end of our Canadian debt of US$45.8 million due on February 10, 2011, offset partially by increased cash ~~balances from operating results.~~balances.

Credit Facilities

Our Amended and Restated Credit Agreement (the “Credit Agreement”) with a group of banks, which was last amended on February 2, 2007, provides for a total senior secured revolving credit facility of $200.0 million, which can be expanded to $250.0 million upon additional lender commitments, that matures on February 11, 2012. The Credit Agreement also provided our Canadian subsidiaries with a senior secured term loan used to fund the repatriation of US$74.7 million of Canadian earnings in January 2006 under the American Jobs Creation Act of 2004. The Canadian term loan matures on February 10, 2011. The Credit Agreement is secured by the stock of certain of the Company’s subsidiaries. The Credit Agreement has several borrowing and interest rate options including the following indices: (i) an alternate base rate (equal to the greater of the prime rate or the federal funds rate plus 0.5%) or (ii) LIBO rate or (iii) CDO rate. Advances under the Credit Agreement bear interest at a rate per annum using the applicable indices plus a varying interest rate margin up to 1.125%. The Credit Agreement also provides for fees applicable to unused commitments ranging from 0.100% to 0.175%. As of ~~October 31, 2009,~~May 1, 2010, there was US$~~43.0~~45.8 million outstanding under the Canadian term loan, with an effective interest rate of ~~1.3%~~1.2%, and no borrowings outstanding under the revolving credit facility.

We utilize letters of credit primarily to secure inventory ~~purchases.~~purchases and as collateral for workers compensation claims. At ~~October 31, 2009,~~May 1, 2010, letters of credit totaling approximately ~~$12.6~~$11.6 million were issued and outstanding. Borrowings available under our Credit Agreement at May 1, 2010 were $188.4 million.

Cash flow activities

Operating activities —–Our primary source of operating cash flow is from sales to our customers. Our primary uses of cash include merchandise inventory and tuxedo rental product purchases, personnel related expenses, occupancy costs, advertising costs and income tax payments. Our operating activities provided net cash of ~~$162.4~~$49.3 million infor the first ~~nine months~~quarter of ~~2009,~~2010, due mainly to net earnings, adjusted for non-cash charges, and ~~a decrease in other assets and~~ an increase in ~~income taxes~~accounts payable, accrued expenses and other current liabilities, offset by increases in ~~inventories and~~ tuxedo rental ~~product.~~product and accounts receivable and a decrease in income taxes payable. During the first ~~nine months~~quarter of ~~2008,~~2009, our operating activities provided net cash of ~~$88.1~~$63.3 million, due mainly to net earnings, adjusted for non-cash charges, ~~offset by~~and increases ~~in inventories and tuxedo rental product and decreases~~ in accounts payable, accrued expenses and other current liabilities and income taxes ~~payable. The increase in inventories during the first nine months of 2009 and 2008 was primarily due to seasonal inventory build up. The increase~~payable, offset by increases in tuxedo rental product and accounts receivable. The increase in accounts

receivable in the first ~~nine months~~quarter of ~~2009~~2010 and ~~2008~~2009 was due mainly to ~~purchases~~the seasonal increase at quarter end for receivables from third-party credit card providers for prom and other tuxedo rentals. Tuxedo rental product increased in each of the periods to support the continued growth in our tuxedo rental business ~~including realignment~~ and, ~~replacement of~~in 2009, to replenish and replace a portion of our tuxedo rental product ~~offerings in both periods.~~offerings. The ~~decrease~~increase in accounts payable, accrued expenses and other current liabilities ~~for~~in the first ~~nine months~~quarter of ~~2008~~2009 was primarily due to the timing of vendor payments, increased amounts due for purchases of tuxedo rental product and the seasonal increase in tuxedo rental deposits, while the increase in income taxes payable was due to the timing and amounts of required tax payments and refunds received. The increase in accounts payable, accrued expenses and other current liabilities in the first quarter of 2010 was primarily due to the timing of vendor payments and ~~reduced purchases associated with decreased clothing sales. The decrease~~the seasonal increase in ~~other assets in the first nine months of 2009 was due mainly to tax refunds received. Income taxes payable in the first nine months of 2008 decreased due to~~tuxedo rental deposits, while the decrease in ~~net earnings for the period. The increase in~~ income taxes payable ~~in the first nine months of 2009~~ was due to the timing ~~and amounts~~ of required tax payments.

Investing activities —–Our cash outflows from investing activities are primarily for capital ~~expenditures and purchases of short-term investments, while cash inflows are primarily the result of proceeds from sales of short-term investments.~~expenditures. During the first ~~nine months~~quarter of 2010 and 2009, our investing activities used net cash of ~~$25.1~~$11.1 million ~~due mainly to proceeds of short-term investments of $19.4~~and $15.0 million, ~~offset by~~respectively, for capital expenditures of $44.5 million. During the first nine months of 2008, our investing activities used net cash of $26.8 million due mainly to net proceeds of short-term investments of $42.5 million, offset by capital expenditures of $69.5 million.expenditures. Our capital expenditures relate to costs incurred for stores ~~opened,~~ remodeled, relocated or ~~relocated~~opened during the period or under construction at the end of the period, infrastructure technology investments and office and distribution facility ~~additions and infrastructure technology investments.~~additions.

Financing activities —–Our cash outflows from financing activities consist primarily of cash dividend payments and debt payments, while cash inflows from financing activities consist primarily of proceeds from our revolving credit ~~facility and from issuances of common stock related to our share-based compensation plans.~~facility. During the first ~~nine months~~quarter of ~~2009,~~2010, our financing activities used net cash of ~~$34.5~~$6.0 million due mainly to cash dividends paid of $4.8 million. Our financing activities used net cash of $29.9 million for the first quarter of 2009, due mainly to payments on our revolving credit facility of $25.0 million and cash dividends paid of $11.0 million, offset by $3.0 million of proceeds from the issuance of common stock. Our financing activities provided net cash of $2.7 million for the first nine months of 2008, due mainly to proceeds from our revolving credit facility and the issuance of common stock, offset by the payment of cash dividends and payments on our Canadian term loan and our revolving credit facility.$3.7 million.

Share repurchase program —–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 million by authorizing $90.3 million to be added to the remaining $9.7 million of the then current program. No shares were purchased under the August 2007 authorization during the first ~~nine months~~quarter of ~~2009~~2010 or ~~2008.~~2009. At ~~October 31, 2009,~~May 1, 2010, the remaining balance available under the August 2007 authorization was $44.3 million.

Dividends —–Cash dividends paid were approximately ~~$11.0~~$4.8 million and ~~$10.9~~$3.7 million for the ~~nine months~~quarter ended ~~October 31,~~May 1, 2010 and May 2, 2009, ~~and November 1, 2008,~~ respectively.

In ~~October 2009,~~April 2010, our Board of Directors declared a quarterly cash dividend of ~~$0.07~~$0.09 per share payable on ~~December 24, 2009~~June 25, 2010 to shareholders of record at close of business on ~~December~~June 15, ~~2009.~~2010. The dividend payout is estimated to be approximately ~~$3.7~~$4.8 million and is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet as of ~~October 31, 2009.~~May 1, 2010.

Future cash flow

~~The continuation of certain adverse~~Current domestic and global economic conditions, including high unemployment levels ~~lowered consumer spending~~ and ~~deteriorated~~tightened credit markets, could negatively affect our future operating results as well as our existing cash and cash ~~equivalent~~equivalents balances. In addition, ~~the presence of turmoil~~conditions in the financial markets could limit our access to additional capital resources, if needed, and could increase associated costs. Given the uncertain economic environment, we continue to focus on operating effectiveness, expense control, inventory management and conservative capital spending. Going forward, we plan to proceed cautiously with new store growth and continue to anticipate a significant reduction in store openings in the next 12 months relative to 2008 levels. We believe based on our current business plan that our existing cash and cash flows from operations will be sufficient to fund our planned store openings, relocations and remodelings, other capital expenditures and operating cash requirements and that we will be able to maintain compliance with the covenants in our Credit Agreement for at least the next 12 months. In addition, as of ~~October 31, 2009,~~May 1, 2010, borrowings available under our Credit Agreement were ~~$187.4~~$188.4 million. However, current economic conditions ~~may create~~are creating potential acquisition opportunities. If such acquisition opportunities develop, we may need to raise additional capital in order to complete such acquisitions ~~and/or~~and our Credit Agreement ~~might~~may need to be ~~modified.~~modified or expanded.

2317

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

Moores conducts its business in Canadian dollars. The exchange rate between Canadian dollars and U.S. dollars has fluctuated over the last ten years. If the value of the Canadian dollar against the U.S. dollar weakens, then the revenues and earnings of our Canadian operations will be reduced when they are translated to U.S. dollars. Also, the value of our Canadian net assets in U.S. dollars may decline.

Interest Rate Risk

We are also subject to market risk as a result of the outstanding balance of US$~~43.0~~45.8 million under our Canadian term loan at ~~October 31, 2009,~~May 1, 2010, which bears a variable interest rate (see Note 3 of Notes to Condensed Consolidated Financial Statements). An increase in market interest rates would increase our interest expense and our cash requirements for interest payments. For example, an average increase of 0.5% in the variable interest rate would increase our interest expense and payments by approximately $0.2 million. At ~~October 31, 2009,~~May 1, 2010, there were no borrowings outstanding under our revolving credit facility.

We also have exposure to market rate risk for changes in interest rates as those rates relate to our investment portfolio. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. As of ~~October 31, 2009,~~May 1, 2010, we have highly liquid investments classified as cash equivalents in our condensed consolidated balance sheet. Future investment income earned on our cash equivalents will fluctuate in line with short-term interest rates.

ITEM 4 — CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the fiscal quarter ended ~~October 31, 2009.~~May 1, 2010. Based on this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of the end of the fiscal quarter ended ~~October 31, 2009~~May 1, 2010 to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Changes in Internal Controls over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended ~~October 31, 2009~~May 1, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

2518

PART II. OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) The following table presents information with respect to purchases of common stock of the Company made during the quarter ended May 1, 2010 as defined by Rule 10b-18(a)(3) under the Exchange Act:


					(c)
					Total		(d)
					Number of		Approximate
					Shares		Dollar Value of
					Purchased		Shares that
					as Part of		May Yet Be
	(a)		(b)		Publicly		Purchased
	Total Number		Average		Announced		Under the
	of Shares		Price Paid		Plans or		Plans or
Period	Purchased		Per Share		Programs		Programs
							(In thousands)
	(1)						(2)

January 31, 2010 through February 27, 2010		7,134	$	20.24		—	$	44,319
February 28, 2010 through April 3, 2010		—		—		—	$	44,319
April 4, 2010 through May 1, 2010		—		—		—	$	44,319
Total		7,134	$	20.24		—	$	44,319


(1)		Represents restricted shares repurchased to satisfy tax withholding obligations arising upon the vesting of certain restricted shares.

(2)		Refer to Note 7 of Notes to Condensed Consolidated Financial Statements for information regarding our share repurchase program.

ITEM 6 — EXHIBITS

(a) Exhibits.


Exhibit
Number		Exhibit Index

	10.1	—	The Men’s Wearhouse, Inc. Change in Control Severance Plan (As Amended and Restated Effective October 1, 2009) (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 27, 2009).

	~~10.2~~	—	Forms of Deferred Stock Unit Award Agreement, Restricted Stock Award Agreement and Nonqualified Stock Option Award Agreement under The Men’s Wearhouse, Inc. ~~2004~~1996 Long-Term Incentive Plan (as amended and restated effective as of April 1, 2008) (filed herewith).

	31.1	—	Certification of Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).

	31.2	—	Certification of Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).

	32.1	—	Certification of Periodic Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).

	32.2	—	Certification of Periodic Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).

EXHIBIT INDEX


Exhibit
Number		Exhibit Index

	10.1	—	The Men’s Wearhouse, Inc. Change in Control Severance Plan (As Amended and Restated Effective October 1, 2009) (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 27, 2009).

	~~10.2~~	—	Forms of Deferred Stock Unit Award Agreement, Restricted Stock Award Agreement and Nonqualified Stock Option Award Agreement under The Men’s Wearhouse, Inc. ~~2004~~1996 Long-Term Incentive Plan (as amended and restated effective as of April 1, 2008) (filed herewith).

	31.1	—	Certification of Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).

	31.2	—	Certification of Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).

	32.1	—	Certification of Periodic Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).

	32.2	—	Certification of Periodic Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).

2821


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 31, 2009~~May 1, 2010 (unaudited), ~~November 1, 2008~~May 2, 2009 (unaudited) and January ~~31, 2009~~30, 2010		2

Condensed Consolidated Statements of Earnings for the ~~Three and Nine Months~~Quarter Ended ~~October 31, 2009~~May 1, 2010 (unaudited) and ~~November 1, 2008~~May 2, 2009 (unaudited)		3

Condensed Consolidated Statements of Cash Flows for the ~~Nine Months~~Quarter Ended ~~October 31, 2009~~May 1, 2010 (unaudited) and ~~November 1, 2008~~May 2, 2009 (unaudited)		4

Notes to Condensed Consolidated Financial Statements (unaudited)		5

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		1613

Item 3 — Quantitative and Qualitative Disclosures about Market Risk		2518

Item 4 — Controls and Procedures		2518

PART II — Other Information

Item 1 — Legal Proceedings		2619

Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds		19

Item 6 — Exhibits		2620

SIGNATURES		2720

~~EX-10.2~~EX-10.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2


Balance February 2, 2008	$	65,309
Translation adjustment		(5,295	)
Adjustment of goodwill of acquired business		(1,338	)
Adjustment for excess of tax deductible goodwill		(1,115	)

Balance, January 31, 2009	$	57,561		$	57,561
Translation adjustment		3,027			3,330
Adjustment for excess of tax deductible goodwill		(1,477	)		(1,477	)

Balance, October 31, 2009	$	59,111
Balance, January 30, 2010				$	59,414
Translation adjustment					1,366

Balance, May 1, 2010				$	60,780


	May 1,		May 2,		January 30,
	2010		2009		2010
Prepaid expenses	$	29,787	$	25,773	$	30,896
Current deferred tax asset		31,804		11,113		37,751
Income taxes receivable		4,123		17,171		1,309
Other		3,116		5,695		4,119


Total other current assets	$	68,830	$	59,752	$	74,075


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

Accrued salary, bonus, sabbatical and vacation	$	31,497	$	30,504	$	40,032
Sales, payroll and property taxes payable		20,229		16,168		12,524
Unredeemed gift certificates		13,393		16,322		14,980
Accrued workers compensation and medical costs		16,544		15,766		17,484
Tuxedo rental deposits		37,288		32,399		9,523
Cash dividends declared		4,757		3,664		4,753
Other		12,475		13,045		17,751


Total accrued expenses and other current liabilities	$	136,183	$	127,868	$	117,047


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

Deferred rent and landlord incentives	$	45,282	$	43,996	$	44,656
Non-current deferred and other income tax liabilities		11,380		13,323		10,976
Other		6,079		6,636		6,604


Total deferred taxes and other liabilities	$	62,741	$	63,955	$	62,236


Dated: ~~December 9, 2009~~June 10, 2010	THE MEN’S WEARHOUSE, INC.
	By	/s/ NEILL P. DAVIS
		Neill P. Davis
		Executive Vice President, Chief Financial Officer, Treasurer and Principal Financial Officer


(1)		Includes ~~87,688~~104,839 shares relinquished for tax payments related to vested deferred stock units for the ~~nine months~~quarter ended ~~October 31, 2009.~~May 1, 2010.


Accrued costs at August 1, 2009	$	607
Cash payments		(248	)
Translation adjustment		(2	)

Accrued costs at October 31, 2009	$	357


Accrued costs at January 31, 2009	$	971
Cash payments		(723	)
Translation adjustment		109

Accrued costs at October 31, 2009	$	357


(1)		MW includes Men’s Wearhouse and Men’s Wearhouse and Tux stores.

(2)		MW Cleaners is our retail dry cleaning and laundry facilities in Houston, Texas.

(3)		Twin Hill is our corporate apparel and uniform program.


	For the Three Months
	Ended (1)						For the Quarter Ended (1)
	October 31,			November 1,			May 1,			May 2,
	2009			2008			2010			2009
Net sales:
Clothing product		72.3	%		72.8	%		77.8	%		77.4	%
Tuxedo rental services		21.1			21.0			15.2			15.4
Alteration and other services		6.6			6.2			7.0			7.2

Total net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales:
Clothing product, including buying and distribution costs		31.9			31.3			35.3			36.1
Tuxedo rental services		3.6			3.5			2.4			2.6
Alteration and other services		5.0			5.2			5.1			5.2
Occupancy costs		15.7			15.9			14.7			15.6

Total cost of sales								57.5			59.5

Gross margin		43.9			44.1			42.5			40.5
Selling, general and administrative expenses		37.4			38.9			37.9			38.6

Operating income		6.5			5.2			4.5			1.9
Interest income		0.1			0.2			0.0			0.1
Interest expense		(0.1	)		(0.2	)		(0.1	)		(0.1	)

Earnings before income taxes		6.5			5.2			4.5			1.9
Provision for income taxes		2.2			2.0			1.6			0.8

Net earnings		4.3	%		3.2	%		2.9	%		1.1	%


(1)		Percentage line items may not sum to totals due to the effect of rounding.


(in millions)			Amount Attributed to
( in millions)				( in millions)		Amount Attributed to

$	(0.5	)	Decrease in comparable sales.	2.6		Increase in comparable sales
	2.4		Increase from net sales of stores opened in 2008, relocated stores and expanded stores not yet included in comparable sales.	2.3		Increase from net sales of stores opened in 2009, relocated stores and expanded stores not yet included in comparable sales
	1.8		Increase in alteration services sales.	(0.8	)	Decrease in alteration services and other sales
	(1.4	)	Decrease in corporate apparel and other sales.	(2.8	)	Decrease in net sales resulting from stores closed
	(2.2	)	Decrease in net sales resulting from stores closed.	0.2		Increase in net sales from one new store opened in 2010
	1.2		Increase in net sales from 4 new stores opened in 2009.	7.8		Increase in net sales resulting from change in U.S./Canadian dollar exchange rate
	1.0		Increase in net sales resulting from exchange rate changes.

$	2.3		Total	9.3		Total


~~(1)~~		~~Percentage line items may not sum to totals due to the effect of rounding.~~


(in millions)			Amount Attributed to

$	(33.1	)	Decrease in comparable sales.
	13.5		Increase from net sales of stores opened in 2008, relocated stores and expanded stores not yet included in comparable sales.
	4.0		Increase in alteration services sales.
	(7.9	)	Decrease in corporate apparel and other sales.
	(6.8	)	Decrease in net sales resulting from stores closed.
	1.9		Increase in net sales from 4 new stores opened in 2009.
	(15.3	)	Decrease in net sales resulting from exchange rate changes.

$	(43.7	)	Total