UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 28, 2012

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)		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. Yes x. No o.

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

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

Large accelerated filer x		Accelerated filer o

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

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

The number of shares of common stock of the Registrant, par value $.01 per share, outstanding at August 28, 2012 was 50,729,447 excluding 21,570,052 shares classified as Treasury Stock.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	July 28, 2012			July 30, 2011			January 28, 2012
	(Unaudited)			(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	106,399		$	162,301		$	125,306
Accounts receivable, net	69,622			65,289			56,669
Inventories	577,078			547,899			572,502
Other current assets	70,786			66,087			70,906

Total current assets	823,885			841,576			825,383

PROPERTY AND EQUIPMENT, net	383,015			337,517			355,717

TUXEDO RENTAL PRODUCT, net	116,586			88,786			99,814
GOODWILL	87,672			90,251			87,782
INTANGIBLE ASSETS, net	32,093			36,839			33,711
OTHER ASSETS	4,748			10,424			3,545

TOTAL ASSETS	$	1,447,999		$	1,405,393		$	1,405,952

LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Accounts payable	$	119,433		$	130,068		$	123,445
Accrued expenses and other current liabilities	161,850			151,754			154,395
Income taxes payable	728			23,994			3,435

Total current liabilities	282,011			305,816			281,275

DEFERRED TAXES AND OTHER LIABILITIES	98,401			71,864			92,858

Total liabilities	380,412			377,680			374,133

COMMITMENTS AND CONTINGENCIES (Note 3 and Note 13)

EQUITY:
Preferred stock	—			—			—
Common stock	722			715			718
Capital in excess of par	372,601			351,181			362,735
Retained earnings	1,163,324			1,074,942			1,095,535
Accumulated other comprehensive income	36,302			49,327			36,921
Treasury stock, at cost	(517,894		)	(461,760		)	(476,749		)

Total equity attributable to common shareholders	1,055,055			1,014,405			1,019,160

Noncontrolling interest	12,532			13,308			12,659

Total equity	1,067,587			1,027,713			1,031,819

TOTAL LIABILITIES AND EQUITY	$	1,447,999		$	1,405,393		$	1,405,952

See Notes to Condensed Consolidated Financial Statements.

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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 Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Net sales:
Retail clothing product	$	413,024		$	401,789		$	833,493		$	812,050
Tuxedo rental services	154,124			148,267			232,613			221,408
Alteration and other services	37,540			35,978			75,274			73,287
Total retail sales	604,688			586,034			1,141,380			1,106,745
Corporate apparel clothing product sales	57,614			69,495			107,496			129,168
Total net sales	662,302			655,529			1,248,876			1,235,913

Cost of sales:
Retail clothing product	184,038			178,896			372,644			366,269
Tuxedo rental services	21,235			20,162			32,248			29,969
Alteration and other services	28,145			27,382			55,703			53,683
Occupancy costs	69,367			68,410			138,065			135,581
Total retail cost of sales	302,785			294,850			598,660			585,502
Corporate apparel clothing product cost of sales	39,260			51,434			75,910			94,533
Total cost of sales	342,045			346,284			674,570			680,035

Gross margin:
Retail clothing product	228,986			222,893			460,849			445,781
Tuxedo rental services	132,889			128,105			200,365			191,439
Alteration and other services	9,395			8,596			19,571			19,604
Occupancy costs	(69,367		)	(68,410		)	(138,065		)	(135,581		)
Total retail gross margin	301,903			291,184			542,720			521,243
Corporate apparel clothing product gross margin	18,354			18,061			31,586			34,635
Total gross margin	320,257			309,245			574,306			555,878

Selling, general and administrative expenses	228,667			220,227			441,769			423,223
Operating income	91,590			89,018			132,537			132,655

Interest income	143			114			271			158
Interest expense	(508		)	(343		)	(941		)	(655		)
Earnings before income taxes	91,225			88,789			131,867			132,158
Provision for income taxes	31,655			31,519			45,717			47,696

Net earnings including noncontrolling interest	59,570			57,270			86,150			84,462
Net (earnings) loss attributable to noncontrolling interest	(177		)	(192		)	127			41

Net earnings attributable to common shareholders.	$	59,393		$	57,078		$	86,277		$	84,503

Net earnings per common share attributable to common shareholders (Note 2):
Basic	$	1.16		$	1.09		$	1.68		$	1.62
Diluted	$	1.15		$	1.09		$	1.67		$	1.61

Weighted average common shares outstanding (Note 2):
Basic	50,711			51,489			50,822			51,703
Diluted	50,932			51,792			51,084			51,994

Cash dividends declared per common share	$	0.18		$	0.12		$	0.36		$	0.24

See Notes to Condensed Consolidated Financial Statements.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011

Net earnings including noncontrolling interest	$	59,570		$	57,270		$	86,150		$	84,462

Currency translation adjustments, net of tax	(8,761		)	(3,697		)	(619		)	11,410

Comprehensive income including noncontrolling interest	50,809			53,573			85,531			95,872

Comprehensive (income) loss attributable to noncontrolling interest:
Net (earnings) loss	(177		)	(192		)	127			41
Currency translation adjustments, net of tax	416			231			—			(449		)

Amounts attributable to noncontrolling interest	239			39			127			(408		)

Comprehensive income attributable to common shareholders	$	51,048		$	53,612		$	85,658		$	95,464

See Notes to Condensed Consolidated Financial Statements.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	For the Six Months Ended
	July 28, 2012			July 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings including noncontrolling interest	$	86,150		$	84,462
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	41,775			37,805
Tuxedo rental product amortization	17,956			17,076
Loss on disposition of assets	1,434			666
Asset impairment charges	122			1,030
Share-based compensation	8,322			6,500
Excess tax benefits from share-based plans	(2,039		)	(1,386		)
Deferred tax provision	4,740			2,078
Deferred rent expense and other	211			863
Changes in operating assets and liabilities:
Accounts receivable	(13,006		)	(3,065		)
Inventories	(4,831		)	(56,133		)
Tuxedo rental product	(34,789		)	(15,538		)
Other assets	(6,816		)	11,055
Accounts payable, accrued expenses and other current liabilities	8,379			14,316
Income taxes payable	(505		)	22,434
Other liabilities	1,329			(147		)

Net cash provided by operating activities	108,432			122,016

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(68,846		)	(38,258		)
Proceeds from sales of property and equipment	14			51

Net cash used in investing activities	(68,832		)	(38,207		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	3,939			4,552
Cash dividends paid	(18,613		)	(12,671		)
Tax payments related to vested deferred stock units	(4,421		)	(2,955		)
Excess tax benefits from share-based plans	2,039			1,386
Repurchases of common stock	(41,296		)	(48,999		)

Net cash used in financing activities	(58,352		)	(58,687		)

Effect of exchange rate changes	(155		)	808

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(18,907		)	25,930
Balance at beginning of period	125,306			136,371

Balance at end of period	$	106,399		$	162,301

See Notes to Condensed Consolidated Financial Statements.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Significant Accounting Policies

Basis of Presentation — The condensed consolidated financial statements herein include the accounts of The Men’s Wearhouse, Inc. and its subsidiaries (the “Company”) and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As applicable under such regulations, certain information and footnote disclosures have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading, and the condensed consolidated financial statements reflect all elimination entries and normal recurring adjustments which are necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 28, 2012.

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

Treasury stock — Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to paid-in capital in excess of par value using the average-cost method.

Recent Accounting Pronouncements — In July 2012, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding testing indefinite-lived intangible assets for impairment. The amendments in this update will allow an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Under these amendments, an entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not the indefinite-lived intangible asset is impaired. The amendments include a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The amended guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this update will only impact our testing of indefinite-lived intangible assets for impairment and will have no impact on our financial position, results of operations or cash flows. We are currently evaluating the impact of this updated guidance on our indefinite-lived intangible assets impairment testing process.

In September 2011, the FASB issued updated guidance regarding testing goodwill for impairment. The updated guidance will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. Under these amendments, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments include a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The adoption of this update at the beginning of our 2012 fiscal year had no impact on our financial position, results of operations or cash flows but may change the way we perform our annual goodwill impairment test in the fourth quarter of 2012.

In June 2011, the FASB issued updated guidance regarding the presentation of comprehensive income. The updated guidance allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB issued a “Deferral of the Effective Date for Amendments of the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income.” This defers only the changes that relate to the presentation of reclassification adjustments on the face of the financial statements where the components of net income and the components of other comprehensive income are presented. We present comprehensive income in a separate statement to the accompanying financial statements. The adoption of this update had no impact on our financial position, results of operations or cash flows.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In May 2011, the FASB updated the guidance regarding certain accounting and disclosure requirements related to fair value measurements. The updated guidance amends U.S. Generally Accepted Accounting Principles (“GAAP”) to create more commonality with International Financial Reporting Standards (“IFRS”) by changing some of the wording used to describe requirements for measuring fair value and for disclosing information about fair value measurements. The adoption of this update at the beginning of our 2012 fiscal year did not have a material impact on our financial position, results of operations or cash flows.

2. Earnings per Share

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

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

	For the Three Months Ended						For the Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011

Numerator
Total net earnings attributable to common shareholders	$	59,393		$	57,078		$	86,277		$	84,503
Net earnings allocated to participating securities (restricted stock and deferred stock units)	(624		)	(711		)	(1,101		)	(978		)
Net earnings attributable to common shareholders	$	58,769		$	56,367		$	85,176		$	83,525
Denominator
Basic weighted average common shares outstanding	50,711			51,489			50,822			51,703
Effect of dilutive securities:
Stock options and equity-based compensation	221			303			262			291
Diluted weighted average common shares outstanding	50,932			51,792			51,084			51,994
Net earnings per common share attributable to common shareholders:
Basic	$	1.16		$	1.09		$	1.68		$	1.62
Diluted	$	1.15		$	1.09		$	1.67		$	1.61

For the three and six months ended July 28, 2012, 0.4 million and 0.3 million anti-dilutive stock options were excluded from the calculation of diluted earnings per common share, respectively. For the three and six months ended July 30, 2011, 0.3 million and 0.4 million anti-dilutive stock options were excluded from the calculation of diluted earnings per common share, respectively.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3. Debt

We have a revolving credit facility with a group of banks (the “Credit Agreement”) that provides for a total senior revolving credit facility of $200.0 million, with increases to $300.0 million upon additional lender commitments, that matures on January 26, 2016. The Credit Agreement is secured by the stock of certain of our subsidiaries. The Credit Agreement has several borrowing and interest rate options including the following indices: (i) adjusted LIBO rate, (ii) adjusted EURIBO rate, (iii) CDO rate, (iv) Canadian prime rate or (v) an alternate base rate (equal to the greater of the prime rate, the federal funds rate plus 0.5% or the adjusted LIBO rate for a one month period plus 1.0%). Advances under the Credit Agreement bear interest at a rate per annum using the applicable indices plus a varying interest rate margin up to 2.75%. The Credit Agreement also provides for fees applicable to amounts available to be drawn under outstanding letters of credit which range from 2.00% to 2.75%, and a fee on unused commitments which ranges from 0.35% to 0.50%. As of July 28, 2012, there were no borrowings outstanding under the Credit Agreement.

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 July 28, 2012.

We utilize letters of credit primarily to secure inventory purchases and as collateral for workers compensation claims. At July 28, 2012, letters of credit totaling approximately $20.8 million were issued and outstanding. Borrowings available under our Credit Agreement at July 28, 2012 were $179.2 million.

4. Supplemental Cash Flows

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

	For the Six Months Ended
	July 28, 2012		July 30, 2011
Cash paid for:
Interest	$	734	$	414
Income taxes, net	$	43,429	$	10,512

Schedule of noncash investing and financing activities:
Tax benefit related to share-based plans	$	2,004	$	1,426
Cash dividends declared	$	9,214	$	6,261

We had unpaid capital expenditure purchases accrued in accounts payable, accrued expenses and other current liabilities of approximately $7.9 million and $8.1 million at July 28, 2012 and July 30, 2011, respectively. Capital expenditure purchases are recorded as cash outflows from investing activities in the condensed consolidated statement of cash flows in the period they are paid.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

	July 28, 2012		July 30, 2011		January 28, 2012

Prepaid expenses	$	35,533	$	31,212	$	32,266
Current deferred tax asset	22,311		28,551		29,392
Tax receivable	3,363		149		1,564
Other	9,579		6,175		7,684

Total other current assets	$	70,786	$	66,087	$	70,906

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

	July 28, 2012		July 30, 2011		January 28, 2012

Accrued salary, bonus, sabbatical and vacation	$	40,702	$	40,009	$	61,544
Sales, value added, payroll and property taxes payable	23,497		19,799		18,176
Accrued workers compensation and medical costs	17,884		17,292		17,590
Customer deposits, prepayments and refunds payable	38,392		36,268		17,521
Unredeemed gift certificates	12,833		12,213		14,895
Loyalty program reward certificates	7,045		6,728		6,537
Cash dividends declared	9,214		6,261		9,339
Other	12,283		13,184		8,793

Total accrued expenses and other current liabilities	$	161,850	$	151,754	$	154,395

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

	July 28, 2012		July 30, 2011		January 28, 2012
Deferred rent and landlord incentives	$	50,805	$	49,882	$	50,953
Non-current deferred and other income tax liabilities	34,011		15,281		34,812
Other	13,585		6,701		7,093

Total deferred taxes and other liabilities	$	98,401	$	71,864	$	92,858

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. Equity and Noncontrolling Interest

A reconciliation of the total carrying amount of the Company’s equity accounts for the six months ended July 28, 2012 is as follows (in thousands):

	Common Stock		Capital in Excess of Par			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock, at Cost			Total Equity Attributable to Common Shareholders			Noncontrolling Interest			Total Equity

Balances — January 28, 2012	$	718	$	362,735		$	1,095,535		$	36,921		$	(476,749	)	$	1,019,160		$	12,659		$	1,031,819
Net earnings (loss)	—		—			86,277			—			—			86,277			(127		)	86,150
Other comprehensive income	—		—			—			(619		)	—			(619		)	—			(619		)
Cash dividends	—		—			(18,488		)	—			—			(18,488		)	—			(18,488		)
Share-based compensation	—		8,322			—			—			—			8,322			—			8,322
Common stock issued under share-based award plans and to stock discount plan	4		3,935			—			—			—			3,939			—			3,939
Tax payments related to vested deferred stock units	—		(4,421		)	—			—			—			(4,421		)	—			(4,421		)
Tax benefit related to share-based plans	—		2,004			—			—			—			2,004			—			2,004
Treasury stock reissued	—		26			—			—			151			177			—			177
Repurchases of common stock	—		—			—			—			(41,296		)	(41,296		)	—			(41,296		)
Balances — July 28, 2012	$	722	$	372,601		$	1,163,324		$	36,302		$	(517,894	)	$	1,055,055		$	12,532		$	1,067,587

A reconciliation of the total carrying amount of the Company’s equity accounts for the six months ended July 30, 2011 is as follows (in thousands):

	Common Stock		Capital in Excess of Par			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock, at Cost			Total Equity Attributable to Common Shareholders			Noncontrolling Interest			Total Equity

Balances — January 29, 2011	$	710	$	341,663		$	1,002,975		$	38,366	$	(412,761	)	$	970,953		$	12,900		$	983,853
Net earnings (loss)	—		—			84,503			—		—			84,503			(41		)	84,462
Other comprehensive income	—		—			—			10,961		—			10,961			449			11,410
Cash dividends	—		—			(12,536		)	—		—			(12,536		)	—			(12,536		)
Share-based compensation	—		6,500			—			—		—			6,500			—			6,500
Common stock issued under share-based award plans and to stock discount plan	5		4,547			—			—		—			4,552			—			4,552
Tax payments related to vested deferred stock units	—		(2,955		)	—			—		—			(2,955		)	—			(2,955		)
Tax benefit related to share-based plans	—		1,426			—			—		—			1,426			—			1,426
Repurchases of common stock	—		—			—			—		(48,999		)	(48,999		)	—			(48,999		)
Balances — July 30, 2011	$	715	$	351,181		$	1,074,942		$	49,327	$	(461,760	)	$	1,014,405		$	13,308		$	1,027,713

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 and six months ended July 28, 2012 was $4.2 million and $8.3 million, respectively. Share-based compensation expense recognized for the three and six months ended July 30, 2011 was $3.5 million and $6.5 million, respectively.

Stock Options

The following table summarizes stock option activity for the six months ended July 28, 2012:

	Shares		Weighted- Average Exercise Price
Outstanding at January 28, 2012	1,314,422		$	22.61
Granted	100,349		40.13
Exercised	(143,298	)	18.65
Forfeited	(7,000	)	22.72
Expired	(322	)	17.62
Outstanding at July 28, 2012	1,264,151		$	24.45
Exercisable at July 28, 2012	703,761		$	21.76

The weighted-average grant date fair value of the 100,349 stock options granted during the six months ended July 28, 2012 was $17.21 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 six months ended July 28, 2012.

	For the Six Months Ended July 28, 2012

Risk-free interest rate	1.09	%
Expected lives	5.0 years
Dividend yield	2.07	%
Expected volatility	58.67	%

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

As of July 28, 2012, we have unrecognized compensation expense related to nonvested stock options of approximately $5.4 million which is expected to be recognized over a weighted average period of 2.2 years.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Nonvested Deferred Stock Units and Restricted Stock Shares

The following table summarizes deferred stock unit activity for the six months ended July 28, 2012:

	Shares		Weighted- Average Grant-Date Fair Value
Nonvested at January 28, 2012	539,749		$	28.10
Granted	330,284		40.13
Vested (1)	(383,588	)	28.00
Forfeited	(5,894	)	30.24
Nonvested at July 28, 2012	480,551		$	36.43

(1) Includes 123,566 shares relinquished for tax payments related to vested deferred stock units for the six months ended July 28, 2012.

The following table summarizes restricted stock activity for the six months ended July 28, 2012:

	Shares		Weighted- Average Grant-Date Fair Value
Nonvested at January 28, 2012	119,081		$	28.45
Granted	10,962		31.92
Vested	(25,632	)	27.80
Forfeited	—		—
Nonvested at July 28, 2012	104,411		$	28.98

As of July 28, 2012, we have unrecognized compensation expense related to nonvested deferred stock units and shares of restricted stock of approximately $15.5 million, which is expected to be recognized over a weighted average period of 1.3 years.

Employee Stock Purchase Plan

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

During the six months ended July 28, 2012, employees purchased 49,724 shares under the ESDP, which had a weighted-average share price of $25.52 per share. As of July 28, 2012, 903,378 shares were reserved for future issuance under the ESDP.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

9. Goodwill and Other Intangible Assets

Goodwill

Goodwill allocated to the Company’s reportable segments and changes in the net carrying amount of goodwill for the six months ended July 28, 2012 are as follows (in thousands):

	Retail			Corporate Apparel			Total
Balance at January 28, 2012	$	59,900		$	27,882		$	87,782
Translation adjustment	(102		)	(8		)	(110		)
Balance at July 28, 2012	$	59,798		$	27,874		$	87,672

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 six months of fiscal 2012.

Intangible Assets

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

	July 28, 2012			July 30, 2011			January 28, 2012

Amortizable intangible assets:
Carrying amount:
Trademarks, tradenames, and other intangibles	$	12,432		$	12,779		$	12,648
Customer relationships	32,138			33,546			32,149
Total carrying amount	44,570			46,325			44,797
Accumulated amortization:
Trademarks, tradenames, and other intangibles	(8,379		)	(8,031		)	(8,339		)
Customer relationships	(5,356		)	(2,768		)	(4,005		)
Total accumulated amortization	(13,735		)	(10,799		)	(12,344		)
Total amortizable intangible assets, net	30,835			35,526			32,453
Infinite-lived intangible assets:
Trademarks	1,258			1,313			1,258
Total intangible assets, net	$	32,093		$	36,839		$	33,711

The pretax amortization expense associated with intangible assets subject to amortization totaled approximately $0.8 million for the three months ended July 28, 2012 and July 30, 2011, respectively. The pretax amortization expense associated with intangible assets subject to amortization totaled approximately $1.6 million and $1.7 million for the six months ended July 28, 2012 and July 30, 2011, respectively, and approximately $3.4 million for the year ended January 28, 2012. Pretax amortization associated with intangible assets subject to amortization at July 28, 2012 is estimated to be $1.7 million for the remainder of fiscal year 2012, $3.2 million for fiscal year 2013 and $3.1 million for each of the fiscal years 2014, 2015 and 2016.

10. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. The hierarchy can be described as follows: Level 1 - observable inputs such as quoted prices in active markets; Level 2 - inputs other than the quoted prices in active markets that are

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

observable either directly or indirectly; and Level 3 - unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

There were no transfers into or out of Level 1 and Level 2 during the three and six months ended July 28, 2012 or July 30, 2011, respectively, or during the year ended January 28, 2012.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

	Fair Value Measurements at Reporting Date Using
(in thousands)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
At July 28, 2012-
Assets:
Cash equivalents	$	20,036	$	—	$	—	$	20,036
Derivative financial instruments	$	—	$	43	$	—	$	43
Liabilities:
Derivative financial instruments	$	—	$	47	$	—	$	47

At January 28, 2012-
Assets:
Cash equivalents	$	20,017	$	—	$	—	$	20,017
Derivative financial instruments	$	—	$	14	$	—	$	14
Liabilities:
Derivative financial instruments	$	—	$	142	$	—	$	142

At July 30, 2011-
Assets:
Cash equivalents	$	40,003	$	—	$	—	$	40,003
Derivative financial instruments	$	—	$	89	$	—	$	89
Liabilities:
Derivative financial instruments	$	—	$	362	$	—	$	362

Cash equivalents consist of money market instruments that have original maturities of three months or less. The carrying value of cash equivalents approximates fair value due to the highly liquid and short-term nature of these instruments.

Derivative financial instruments are comprised of foreign currency forward exchange contracts primarily entered into to minimize our foreign currency exposure related to forecasted purchases of certain inventories denominated in a currency different from the operating entity’s functional currency. Our derivative financial instruments are recorded in the condensed consolidated balance sheets at fair value based upon observable market inputs. Derivative financial instruments in an asset position are included within other current assets in the condensed consolidated balance sheets. Derivative financial instruments in a liability position are included within accrued expenses and other current liabilities in the condensed consolidated balance sheets. Refer to Note 11 for further information regarding our derivative instruments.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The tables below disclose the fair value of the derivative financial instruments included in the condensed consolidated balance sheets as of July 28, 2012, January 28, 2012 and July 30, 2011 (in thousands):

	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives not designated as hedging instruments:
At July 28, 2012-Foreign exchange forward contracts	Other current assets	$	43	Accrued expenses and other current liabilities	$	47

At January 28, 2012-Foreign exchange forward contracts	Other current assets	$	14	Accrued expenses and other current liabilities	$	142

At July 30, 2011-Foreign exchange forward contracts	Other current assets	$	89	Accrued expenses and other current liabilities	$	362

At July 28, 2012, we had 10 contracts to purchase euros for an aggregate notional amount of US$0.9 million maturing in various increments at various dates through December 2012, 13 contracts to purchase United States dollars (“USD”) for an aggregate notional amount of Canadian dollars (“CAD”) $7.3 million maturing in various increments at various dates through December 2012 and 18 contracts to purchase USD for an aggregate notional amount of pounds Sterling (“GBP”) £11.8 million maturing in various increments at various dates through December 2012. For the three and six months ended July 28, 2012, we recognized a net pre-tax gain of $0.6 million and a pre-tax loss of $0.2 million, respectively, in cost of sales in the condensed consolidated statement of earnings for our derivative financial instruments not designated as cash flow hedges.

At January 28, 2012, we had 10 contracts maturing in varying increments to purchase euros for an aggregate notional amount of US$1.7 million maturing at various dates through June 2012, nine contracts maturing in varying increments to purchase USD for an aggregate notional amount of CAD $5.9 million maturing at various dates through June 2012 and 22 contracts maturing in varying increments to purchase USD for an aggregate notional amount of GBP £10.5 million maturing at various dates through May 2012.

At July 30, 2011, we had two contracts to purchase euros for an aggregate notional amount of US$1.0 million maturing in various increments at various dates through October 2011, six contracts to purchase USD for an aggregate notional amount of CAD $6.1 million maturing in various increments at various dates through December 2011 and 34 contracts to purchase USD for an aggregate notional amount of GBP £11.9 million maturing in various increments at various dates through November 2011. For the three and six months ended July 30, 2011, we recognized a net pretax loss of $0.8 million and $1.5 million, respectively, in cost of sales in the condensed consolidated statement of earnings for our derivative financial instruments not designated as hedging instruments.

We had no derivative financial instruments with credit-risk-related contingent features underlying the agreements as of July 28, 2012, January 28, 2012 or July 30, 2011, respectively.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12. Segment Reporting

The Company’s operations are conducted in two reportable segments, retail and corporate apparel, based on the way we manage, evaluate and internally report our business activities.

The retail segment includes the results from our four retail merchandising brands: Men’s Wearhouse, Men’s Wearhouse and Tux, K&G and Moores Clothing for Men (“Moores”). These four brands are operating segments that have been aggregated into the retail reportable segment based on their similar economic characteristics, products, production processes, target customers and distribution methods. MW Cleaners is also aggregated in the retail segment as these operations have not had a significant effect on the revenues or expenses of the Company. Specialty apparel merchandise offered by our four retail merchandising concepts includes suits, suit separates, sport coats, slacks, sportswear, outerwear, dress shirts, shoes and accessories for men. Ladies’ career apparel, sportswear, accessories and shoes and children’s apparel is offered at most of our K&G stores. Tuxedo rentals are offered at our Men’s Wearhouse, Men’s Wearhouse and Tux and Moores retail stores.

The corporate apparel segment includes the results from our corporate apparel and uniform operations conducted by Twin Hill in the United States and Dimensions and Alexandra in the UK. The two corporate apparel and uniform concepts are operating segments that have been aggregated into the reportable corporate apparel segment based on their similar economic characteristics, products, production processes, target customers and distribution methods. The corporate apparel segment provides corporate clothing uniforms and workwear to workforces.

Operating income is the primary measure of profit we use to make decisions on allocating resources to our operating segments and to assess the operating performance of each operating segment. It is defined as income before interest expense, interest income, income taxes and noncontrolling interest. Corporate expenses and assets are allocated to the retail segment.

Net sales by brand and reportable segment are as follows (in thousands):

	For the Three Months Ended				For the Six Months Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Net sales:
MW (1)	$	429,513	$	407,025	$	800,981	$	761,696
K&G	89,995		92,528		193,087		199,277
Moores	78,361		80,327		133,839		133,507
MW Cleaners	6,819		6,154		13,473		12,265
Total retail segment	604,688		586,034		1,141,380		1,106,745

Twin Hill	6,218		6,267		13,283		11,982
Dimensions and Alexandra (UK)	51,396		63,228		94,213		117,186
Total corporate apparel segment	57,614		69,495		107,496		129,168

Total net sales	$	662,302	$	655,529	$	1,248,876	$	1,235,913

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

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table sets forth supplemental products and services sales information for the Company (in thousands):

	For the Three Months Ended				For the Six Months Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011
Net sales:
Men’s tailored clothing product	$	227,664	$	224,533	$	457,944	$	453,736
Men’s non-tailored clothing product	165,836		158,407		332,724		316,690
Ladies’ clothing product	19,524		18,849		42,825		41,624
Total retail clothing product	413,024		401,789		833,493		812,050

Tuxedo rental services	154,124		148,267		232,613		221,408

Alteration services	30,721		29,824		61,801		61,022
Retail dry cleaning services	6,819		6,154		13,473		12,265
Total alteration and other services	37,540		35,978		75,274		73,287

Corporate apparel clothing product	57,614		69,495		107,496		129,168

Total net sales	$	662,302	$	655,529	$	1,248,876	$	1,235,913

Operating income (loss) by reportable segment and the reconciliation to earnings before income taxes is as follows (in thousands):

	For the Three Months Ended						For the Six Months Ended
	July 28, 2012			July 30, 2011			July 28, 2012			July 30, 2011
Operating income (loss):
Retail	$	89,399		$	88,160		$	132,766		$	133,057
Corporate apparel	2,191			858			(229		)	(402		)
Operating income	91,590			89,018			132,537			132,655
Interest income	143			114			271			158
Interest expense	(508		)	(343		)	(941		)	(655		)
Earnings before income taxes	$	91,225		$	88,789		$	131,867		$	132,158

13. Legal Matters

We are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management does not believe that any of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

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Overview

We had revenues of $662.3 million, gross margin of $320.3 million and net earnings attributable to common shareholders of $59.4 million for the quarter ended July 28, 2012, compared to revenues of $655.5 million, gross margin of $309.2 and net earnings attributable to common shareholders of $57.1 million for the quarter ended July 30, 2011. We had revenues of $1,248.9 million, gross margin of $574.3 million and net earnings attributable to common shareholders of $86.3 million for the six months ended July 28, 2012, compared to revenues of $1,235.9 million, gross margin of $555.9 million and net earnings attributable to common shareholders of $84.5 million for the six months ended July 30, 2011. We increased our revenues by $6.8 million or 1.0% and our gross margin by $11.0 million or 3.6% for the second quarter of 2012 as compared to the same prior year period. We increased our revenues by $13.0 million or 1.0% and our gross margin by $18.4 million or 3.3% for the first six months of 2012 as compared to the same prior year period.

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

	For the Three Months Ended				For the Six Months Ended				For the Year Ended
	July 28, 2012		July 30, 2011		July 28, 2012		July 30, 2011		January 28, 2012

Stores open at beginning of period:	1,162		1,187		1,166		1,192		1,192
Opened	4		4		8		7		25
Closed	(13	)	(13	)	(21	)	(21	)	(51	)
Stores open at end of period	1,153		1,178		1,153		1,178		1,166

Stores open at end of period:
Men’s Wearhouse	613		591		613		591		607
Men’s Wearhouse and Tux	325		370		325		370		343
K&G	98		100		98		100		99
Moores	117		117		117		117		117
	1,153		1,178		1,153		1,178		1,166

During the first six months of 2012, we opened eight stores (seven Men’s Wearhouse stores and one K&G store) and closed 21 stores (one Men’s Wearhouse store, two K&G stores and 18 Men’s Wearhouse and Tux stores), of which 15 had reached the end of their lease terms.

Our sales and net earnings are subject to seasonal fluctuations. In most years, a greater portion of our net retail clothing sales have been generated during the fourth quarter of each year when holiday season shopping peaks. In addition, our tuxedo rental revenues are heavily concentrated in the second quarter while the fourth quarter is considered the seasonal low point. With respect to corporate apparel sales and operating results, seasonal fluctuations are not significant but customer decisions to rebrand or revise their corporate wear programs can cause significant variations in period results. Because of these fluctuations in our sales, results for any quarter are not necessarily indicative of the results that may be achieved for the full year. Additionally, U.S. and global economic conditions that impact consumer confidence and the level of consumer discretionary spending also impact our operating results.

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Results of Operations

For the Three Months Ended July 28, 2012 compared to the Three Months Ended July 30, 2011

The following table sets forth the Company’s results of operations expressed as a percentage of net sales for the periods indicated:

	For the Three Months Ended (1)
	July 28,		July 30,
	2012		2011
Net sales:
Retail clothing product	62.4	%	61.3	%
Tuxedo rental services	23.3		22.6
Alteration and other services	5.7		5.5
Total retail sales	91.3		89.4
Corporate apparel clothing product sales	8.7		10.6
Total net sales	100.0	%	100.0	%
Cost of sales (2):
Retail clothing product	44.6		44.5
Tuxedo rental services	13.8		13.6
Alteration and other services	75.0		76.1
Occupancy costs	11.5		11.7
Total retail cost of sales	50.1		50.3
Corporate apparel clothing product cost of sales	68.1		74.0
Total cost of sales	51.6		52.8
Gross margin (2):
Retail clothing product	55.4		55.5
Tuxedo rental services	86.2		86.4
Alteration and other services	25.0		23.9
Occupancy costs	(11.5	)	(11.7	)
Total retail gross margin	49.9		49.7
Corporate apparel clothing product gross margin	31.9		26.0
Total gross margin	48.4		47.2
Selling, general and administrative expenses	34.5		33.6
Operating income	13.8		13.6
Interest income	0.0		0.0
Interest expense	(0.1	)	(0.1	)
Earnings before income taxes	13.8		13.5
Provision for income taxes	4.8		4.8
Net earnings including noncontrolling interest	9.0		8.7
Net earnings attributable to noncontrolling interest	0.0		0.0
Net earnings attributable to common shareholders	9.0	%	8.7	%

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

(2) Calculated as a percentage of related sales.

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Total retail sales increased $18.7 million, or 3.2%, to $604.7 million due mainly to a $11.2 million increase in retail clothing product revenues and a $5.9 million increase in tuxedo rental services revenues. These increases are attributable to the following:

(in millions)			Amount Attributed to
$	15.3		Increase in comparable sales.
8.7			Increase from net sales of stores opened in 2011, relocated stores and expanded stores not yet included in comparable sales.
2.4			Increase in e-commerce, alteration and other services sales.
2.3			Increase in net sales from eight new stores opened in 2012.
(6.3		)	Decrease in net sales resulting from closed stores.
(3.7		)	Decrease in net sales resulting from change in U.S./Canadian dollar exchange rate.
$	18.7		Increase in total retail sales.

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) increased 4.4% at Men’s Wearhouse/Men’s Wearhouse and Tux, increased 2.5% at Moores and decreased 3.3% at K&G. The increase at Men’s Wearhouse/Men’s Wearhouse and Tux resulted from increased average unit retails (net selling prices) that more than offset a decrease in average transactions per store. The increase at Moores was driven by increased average unit retails and increased units sold per transaction that more than offset a decrease in average transactions per store. The decrease at K&G was due to decreased average unit retails. Tuxedo rental service revenues increased primarily due to increased unit rentals and unit rental rates as well as increased sales of tuxedo accessories.

Total corporate apparel clothing product sales decreased $11.9 million to $57.6 million. UK corporate apparel sales decreased $11.8 million due to later launch dates for customer directed new uniform programs (“rollouts”) in fiscal 2012 as compared to fiscal 2011. In addition, UK customer rollouts in 2012 were comparatively smaller than in 2011 which included the largest single customer rollout in Dimensions’ operating history.

The Company’s gross margin was as follows:

	For the Three Months Ended
	July 28,			July 30,
	2012			2011
Gross margin (in thousands)	$	320,257		$	309,245

Gross margin as a percentage of related sales:
Retail gross margin:
Clothing product	55.4		%	55.5		%
Tuxedo rental services	86.2		%	86.4		%
Alteration and other services	25.0		%	23.9		%
Occupancy costs	(11.5		)%	(11.7		)%
Total retail gross margin	49.9		%	49.7		%

Corporate apparel clothing product gross margin	31.9		%	26.0		%

Total gross margin	48.4		%	47.2		%

Buying and distribution costs are included in determining our retail and corporate apparel clothing product gross margins. Our gross margin may not be comparable to other specialty retailers, as some companies exclude costs related to their distribution network from cost of goods sold while others, like us, include all or a portion of such costs in cost of goods sold and exclude them from selling, general and administrative expenses. Distribution costs are not included in determining our tuxedo rental services gross margin but are included in selling, general and administrative expenses.

In the retail segment, total gross margin as a percentage of related sales increased from 49.7% in the second quarter of 2011 to 49.9% in the second quarter of 2012. On an absolute dollar basis total retail segment gross margin increased $10.7 million or 3.7% from the same prior year quarter to $301.9 million in the second quarter of 2012. Retail clothing product margin decreased slightly from 55.5% in the second quarter of 2011 to 55.4% in the second quarter of 2012. On an absolute dollar basis retail clothing product margin increased $6.1 million. Tuxedo rental services margin decreased slightly from 86.4% in the second quarter of 2011 to 86.2% in the second quarter of 2012 due mainly to increased royalty expenses. On an absolute dollar basis tuxedo rental services margin increased $4.8 million. The gross margin for alteration and other services increased from 23.9% in the second quarter of 2011

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to 25.0% in the second quarter of 2012 mainly as a result of increased sales at MW Cleaners and improved cost leverage from increased alteration sales at Men’s Wearhouse/Men’s Wearhouse and Tux stores. Occupancy costs, 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 11.7% in the second quarter of 2011 to 11.5% in the second quarter of 2012. On an absolute dollar basis occupancy costs increased $1.0 million primarily due to depreciation expense.

In the corporate apparel segment, total gross margin as a percentage of related sales increased from 26.0% in the second quarter of 2011 to 31.9% in the second quarter of 2012 mainly as a result of cost synergies following the consolidation of Dimensions and Alexandra distribution facilities and supporting service functions and changes in the sales mix. On an absolute dollar basis, corporate apparel gross margin increased $0.3 million as the impact of decreased sales was more than offset by the cost synergies and sales mix changes.

Selling, general and administrative (“SG&A”) expenses increased to $228.7 million in the second quarter of 2012 from $220.2 million in the second quarter of 2011, an increase of $8.4 million or 3.8%. As a percentage of total net sales, these expenses increased from 33.6% in the second quarter of 2011 to 34.5% in the second quarter of 2012. The components of this 0.9% net increase in SG&A expenses as a percentage of total 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 3.3% in the second quarter of 2011 to 3.9% in the second quarter of 2012. On an absolute dollar basis, advertising expense increased $4.4 million.
0.1		Increase in store salaries as a percentage of sales from 12.0% in the second quarter of 2011 to 12.1% in the second quarter of 2012. Store salaries on an absolute dollar basis increased $1.3 million primarily due to increased store sales support salaries and increased commissions associated with increased retail sales.
0.2		Increase in other SG&A expenses as a percentage of sales from 18.3% in the second quarter of 2011 to 18.5% in the second quarter of 2012. On an absolute dollar basis, other SG&A expenses increased $2.7 million primarily due to increased payroll related costs.
0.9	%	Total

In the retail segment, SG&A expenses as a percentage of related net sales increased from 34.6% in the second quarter of 2011 to 35.1% in the second quarter of 2012. On an absolute dollar basis, retail segment SG&A expenses increased $9.4 million primarily due to increased advertising expense, stores salaries and payroll related costs, offset partially by the reduction in non-cash asset impairment charges of $0.9 million.

In the corporate apparel segment, SG&A expenses as a percentage of related net sales increased from 24.8% in the second quarter of 2011 to 28.1% in the second quarter of 2012 primarily because of the decrease in sales. On an absolute dollar basis, corporate apparel segment SG&A expenses decreased $1.0 million primarily due to reduced UK operating expenses following the consolidation of Dimensions and Alexandra distribution facilities and supporting service functions and the absence in the second quarter of 2012 of $0.7 million in integration costs incurred in the second quarter of 2011 associated with our August 2010 UK acquisitions.

Corporate apparel segment operating income of $2.2 million for the second quarter of 2012 includes $2.5 million of operating income in the UK and $0.3 million of operating losses in the U.S.

Our effective income tax rate was 34.7% for the second quarter of fiscal 2012 and 35.5% for the second quarter of fiscal 2011. The effective tax rate for the second quarter of fiscal 2012 was lower than the statutory U.S. federal rate of 35% due to the favorable tax rate effects from net permanent book-to-tax adjustments, lower foreign statutory tax rates imposed on our foreign operations and benefits from the conclusion of various income tax audits, offset partially by the effect of state income taxes. The effective tax rate for the second quarter of fiscal 2011 was higher than the statutory U.S. federal rate of 35% due mainly to state income taxes, offset partially by lower foreign statutory tax rates imposed on our foreign operations.

These factors resulted in net earnings attributable to common shareholders of $59.4 million or 9.0% of net sales for the second quarter of 2012, compared with net earnings of $57.1 million or 8.7% of net sales for the second quarter of 2011.

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For the Six Months Ended July 28, 2012 compared to the Six Months Ended July 30, 2011

The following table sets forth the Company’s results of operations expressed as a percentage of net sales for the periods indicated:

	For the Six Months Ended (1)
	July 28,		July 30,
	2012		2011
Net sales:
Retail clothing product	66.7	%	65.7	%
Tuxedo rental services	18.6		17.9
Alteration and other services	6.0		5.9
Total retail sales	91.4		89.5
Corporate apparel clothing product sales	8.6		10.5
Total net sales	100.0	%	100.0	%
Cost of sales (2):
Retail clothing product	44.7		45.1
Tuxedo rental services	13.9		13.5
Alteration and other services	74.0		73.3
Occupancy costs	12.1		12.3
Total retail cost of sales	52.5		52.9
Corporate apparel clothing product cost of sales	70.6		73.2
Total cost of sales	54.0		55.0
Gross margin (2):
Retail clothing product	55.3		54.9
Tuxedo rental services	86.1		86.5
Alteration and other services	26.0		26.7
Occupancy costs	(12.1	)	(12.3	)
Total retail gross margin	47.5		47.1
Corporate apparel clothing product gross margin	29.4		26.8
Total gross margin	46.0		45.0
Selling, general and administrative expenses	35.4		34.2
Operating income	10.6		10.7
Interest income	0.0		0.0
Interest expense	(0.1	)	(0.1	)
Earnings before income taxes	10.6		10.7
Provision for income taxes	3.7		3.9
Net earnings including noncontrolling interest	6.9		6.8
Net loss attributable to noncontrolling interest	0.0		0.0
Net earnings attributable to common shareholders	6.9	%	6.8	%

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

(2) Calculated as a percentage of related sales.

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Total retail sales increased $34.6 million, or 3.1%, to $1,141.4 million due mainly to an $21.4 million increase in retail clothing product revenues and a $11.2 million increase in tuxedo rental services revenues. These increases are attributable to the following:

(in millions)			Amount Attributed to
$	26.8		Increase in comparable sales.
17.2			Increase from net sales of stores opened in 2011, relocated stores and expanded stores not yet included in comparable sales.
3.7			Increase in e-commerce, alteration and other services sales.
3.2			Increase in net sales from eight new stores opened in 2012.
(11.3		)	Decrease in net sales resulting from closed stores.
(5.0		)	Decrease in net sales resulting from change in U.S./Canadian dollar exchange rate.
$	34.6		Increase in total retail sales.

Comparable store sales increased 4.1% at Men’s Wearhouse/Men’s Wearhouse and Tux, increased 4.4% at Moores and decreased 3.7% at K&G. The increase at Men’s Wearhouse/Men’s Wearhouse and Tux resulted from increased average unit retails (net selling prices) that more than offset decreases in average transactions per store and units sold per transaction. The increase at Moores was driven by increased average unit retails and increased units sold per transaction that more than offset a decrease in average transactions per store. The decrease at K&G was due to decreased average unit retails that more than offset increases in the average number of transactions per store and units sold per transaction. Tuxedo rental service revenues increased primarily due to increased unit rentals and unit rental rates as well as increased sales of tuxedo accessories.

Total corporate apparel clothing product sales decreased $21.7 million, to $107.5 million. UK corporate apparel sales decreased $23.0 million due to later launch dates for customer directed new uniform rollouts in fiscal 2012 as compared to fiscal 2011. In addition, UK customer rollouts in 2012 were comparatively smaller than in 2011 which included the largest single customer rollout in Dimensions’ operating history. U.S. corporate apparel sales increased $1.3 million due primarily to increased sales from a customer program and increased catalog sales.

The Company’s gross margin was as follows:

	For the Six Months Ended
	July 28,			July 30,
	2012			2011
Gross margin (in thousands)	$	574,306		$	555,878

Gross margin as a percentage of related sales:
Retail gross margin:
Clothing product	55.3		%	54.9		%
Tuxedo rental services	86.1		%	86.5		%
Alteration and other services	26.0		%	26.7		%
Occupancy costs	(12.1		)%	(12.3		)%
Total retail gross margin	47.5		%	47.1		%

Corporate apparel clothing product gross margin	29.4		%	26.8		%

Total gross margin	46.0		%	45.0		%

In the retail segment, total gross margin as a percentage of related sales increased from 47.1% in the first six months of 2011 to 47.5% in the first six months of 2012. On an absolute dollar basis total retail segment gross margin increased $21.5 million or 4.1% from the same prior year period to $542.7 million in the first six months of 2012. Retail clothing product gross margin increased from 54.9% in the first six months of 2011 to 55.3% in the first six months of 2012 due primarily to increased average unit retails. Tuxedo rental services margin decreased from 86.5% in the first six months of 2011 to 86.1% in the first six months of 2012 due mainly to increased royalty expenses. On an absolute dollar basis tuxedo rental services margin increased $8.9 million. The gross margin for alteration and other services decreased from 26.7% in the first six months of 2011 to 26.0% in the first six months of 2012 mainly

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as a result of increased payroll related costs, offset partially by increased sales at MW Cleaners. Occupancy costs, 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 12.3% in the first six months of 2011 to 12.1% in the first six months of 2012. On an absolute dollar basis, occupancy costs increased $2.5 million primarily due to higher rent and depreciation expense.

In the corporate apparel segment, total gross margin as a percentage of related sales increased from 26.8% in the first six months of 2011 to 29.4% in the first six months of 2012 mainly as a result of cost synergies following the consolidation of Dimensions and Alexandra distribution facilities and supporting service functions and changes in the sales mix. On an absolute dollar basis, corporate apparel gross margin decreased $3.0 million as the impact of decreased sales more than offset the cost synergies and sales mix changes.

SG&A expenses increased to $441.8 million in the first six months of 2012 from $423.2 million in the first six months of 2011, an increase of $18.5 million or 4.4%. As a percentage of total net sales, these expenses increased from 34.2% in the first six months of 2011 to 35.4% in the first six months of 2012. The components of this 1.2% net increase in SG&A expenses as a percentage of total net sales and the related absolute dollar changes were as follows:

%		Attributed to
0.4		Increase in advertising expense as a percentage of sales from 3.2% in the first six months of 2011 to 3.6% in the first six months of 2012. On an absolute dollar basis, advertising expense increased $6.0 million.
0.3		Increase in store salaries as a percentage of sales from 12.3% in the first six months of 2011 to 12.6% in the first six months of 2012. Store salaries on an absolute dollar basis increased $5.0 million primarily due to increased store sales support salaries and increased commissions associated with increased retail sales.
0.5		Increase in other SG&A expenses as a percentage of sales from 18.7% in the first six months of 2011 to 19.2% in the first six months of 2012. On an absolute dollar basis, other SG&A expenses increased $7.5 million primarily due to increased payroll related costs.
1.2	%	Total

In the retail segment, SG&A expenses as a percentage of related net sales increased from 35.1% in the first six months of 2011 to 35.9% in the first six months of 2012. On an absolute dollar basis, retail segment SG&A expenses increased $21.7 million primarily due to increased advertising expense, stores salaries and payroll related costs, offset partially by the reduction in non-cash asset impairment charges of $0.9 million.

In the corporate apparel segment, SG&A expenses as a percentage of related net sales increased from 27.1% in the first six months of 2011 to 29.6% in the first six months of 2012 primarily because of the decrease in sales. On an absolute dollar basis, corporate apparel segment SG&A expenses decreased $3.2 million primarily due to reduced UK operating expenses following the consolidation of Dimensions and Alexandra distribution facilities and supporting service functions and the absence in the first six months of 2012 of $1.4 million in integration costs, incurred in the first six months of 2011 associated with our August 2010 UK acquisitions.

Corporate apparel segment operating loss of $0.2 million for the first six months of 2012 includes $0.8 million of operating income in the UK and $1.0 million of operating losses in the U.S.

Our effective income tax rate was 34.7% for the first six months of fiscal 2012 and 36.1% for the first six months of fiscal 2011. The effective tax rate for the first six months of 2012 was lower than the statutory U.S. federal rate of 35% due to the favorable tax rate effects from net permanent book-to-tax adjustments, lower foreign statutory tax rates imposed on our foreign operations and benefits from the conclusion of various income tax audits, offset partially by the effect of state income taxes. The effective tax rate for the first six months of 2011 was higher than the statutory U.S. federal rate due mainly to state income taxes, offset partially by lower foreign statutory tax rates imposed on our foreign operations.

These factors resulted in net earnings attributable to common shareholders of $86.3 million or 6.9% of net sales for the first six months of 2012, compared with net earnings of $84.5 million or 6.8% of net sales for the first six months of 2011.

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Cash flow activities

Operating activities — Our primary source of operating cash flow is from sales to our customers. Our primary uses of cash include clothing product inventory and tuxedo rental product purchases, personnel related expenses, occupancy costs, advertising costs and income tax payments. Our operating activities provided net cash of $108.4 million in the first six months of 2012, due mainly to net earnings, adjusted for non-cash charges, and an increase in accounts payable, accrued expenses and other current liabilities, offset by increases in accounts receivable, inventories, tuxedo rental product and other assets.

· The increase in accounts payable, accrued expenses and other current liabilities was primarily due to the timing of vendor payments for inventory and tuxedo product purchases and the seasonal increase in tuxedo rental deposits.

· The increase in accounts receivable was primarily due to an increase in UK sales during the June/July 2012 period as compared to the December 2011/January 2012 period when sales were lower than usual due to Dimensions and Alexandra consolidation activities during those months.

· Inventories increased mainly because of customer rollouts of corporate apparel uniform programs scheduled for the second half of 2012.

· Tuxedo rental product increased to support the continued growth of our tuxedo rental business and to replenish product offerings.

· The increase in other assets related primarily to the timing and amounts of required tax payments and an increase in prepaid expenses.

During the first six months of 2011, our operating activities provided net cash of $122.0 million, due mainly to net earnings, adjusted for non-cash charges, increases in income taxes payable, accounts payable, accrued expenses and other current liabilities and a decrease in other assets, offset by increases in inventories and tuxedo rental product.

· The increase in inventories was primarily due to increased retail sales and planned promotions in the second half of fiscal 2011.

· Tuxedo rental product increased to support the continued growth of our tuxedo rental business and to replenish product offerings.

· The decrease in other assets and the increase in income taxes payable were due to the timing and amounts of required tax payments.

Investing activities — Our cash outflows from investing activities are primarily for capital expenditures. During the first six months of 2012 and 2011, our investing activities used net cash of $68.8 million and $38.2 million, respectively, primarily for capital expenditures. Our capital expenditures relate to costs incurred for stores opened, remodeled or relocated during the period or under construction at the end of the period, office and distribution facility additions and infrastructure technology investments.

Financing activities — Our cash outflows from financing activities consist primarily of cash dividend payments and repurchases of common stock, while cash inflows from financing activities consist primarily of proceeds from the issuance of common stock. During the first six months of 2012, our financing activities used net cash of $58.4 million due mainly to the repurchase of common stock of $41.3 million and cash dividends paid of $18.6 million, offset by $3.9 million proceeds from the issuance of common stock. Our financing activities used net cash of $58.7 million for the first six months of 2011, due mainly to the repurchase of common stock of $49.0 million and cash dividends paid of $12.7 million, offset by $4.6 million proceeds from the issuance of common stock

Share repurchase program — We repurchase shares of our common stock primarily through open market transactions under a $150.0 million share repurchase program authorized by our Board of Directors in January 2011.

During the first six months of 2011, 1,822,340 shares at a cost of $48.8 million were repurchased at an average price per share of $26.78 under the January 2011 authorization. During the first six months of 2012, 1,121,484 shares at a cost of $41.0 million were repurchased at an average price per share of $36.59 under the January 2011 authorization. At July 28, 2012, the remaining balance available under the January 2011 authorization was $45.2 million.

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During the first six months of 2012 and 2011, 7,041 shares and 7,132 shares, respectively, at a cost of $0.3 million and $0.2 million, respectively, were repurchased at an average price per share of $37.28 and $27.77, respectively, in private transactions to satisfy tax withholding obligations arising upon the vesting of certain restricted stock.

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

	For the Six Months Ended
	July 28, 2012		July 30, 2011

Shares repurchased	1,128,525		1,829,472
Total costs	$	41,296	$	48,999
Average price per share	$	36.59	$	26.78

In June 2012, 6,295 treasury shares of our common stock were reissued pursuant to a two-year services agreement with an unrelated third party. The fair value of the common stock issued was approximately $0.2 million.

Dividends — Cash dividends paid were approximately $18.6 million and $12.7 million for the six months ended July 28, 2012 and July 30, 2011, respectively.

In June 2012, our Board of Directors declared a quarterly cash dividend of $0.18 per share payable on September 21, 2012 to shareholders of record at close of business on September 11, 2012. The dividend payout is estimated to be approximately $9.2 million and is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet as of July 28, 2012.

Future sources and uses of cash

Our primary uses of cash are to finance working capital requirements of our operations. In addition, we will use cash to fund capital expenditures, income tax and dividend payments, operating leases and various other commitments and obligations, as they arise.

Capital expenditures are anticipated to be in the range of $125.0 to $135.0 million for 2012. This amount includes the anticipated costs of opening approximately 35 new Men’s Wearhouse stores, three new Moores stores and one new K&G store in 2012. This amount also includes the $13.4 million purchase, completed in June 2012, of approximately 7.7 acres with three buildings (total square footage 115,737) in Fremont, California to be utilized for offices as we consolidate our California office locations. The balance of the capital expenditures for 2012 will be used for telecommunications, point-of-sale and other computer equipment and systems, store relocations, remodeling and expansion, distribution and office facilities and investment in other corporate assets. The actual amount of future capital expenditures will depend in part on the number of new stores opened and the terms on which new stores are leased, as well as on industry trends consistent with our anticipated operating plans.

Current domestic and global economic conditions, including unemployment levels, public sector spending and credit market constraints, could negatively affect our future operating results as well as our existing cash and cash equivalents balances. In addition, conditions in the financial markets could limit our access to additional capital resources, if needed, and could increase associated costs. 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. Borrowings available under our Credit Agreement were $179.2 million as of July 28, 2012.

We are exposed to market risk associated with foreign currency exchange rate fluctuations as a result of our direct sourcing programs and our operations in foreign countries. In connection with our direct sourcing programs, we may enter into merchandise purchase commitments that are denominated in a currency different from the functional currency of the operating entity. Our risk management policy is to hedge a significant portion of forecasted merchandise purchases for our direct sourcing programs that bear foreign exchange risk using foreign exchange forward contracts. As these foreign exchange forward contracts are with three financial institutions, we are exposed to credit risk in the event of nonperformance by these parties. However, due to the creditworthiness of these major financial institutions, full performance is anticipated.

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

(a) On June 21, 2012, we reissued 6,295 treasury shares of our common stock to Trabajando, Inc., a service provider, pursuant to a services agreement, dated as of June 21, 2012 (the “Services Agreement”). Such shares were issued in lieu of cash in exchange for certain services to be rendered under the Services Agreement. The issuance of such shares was undertaken in reliance upon an exemption for sales of securities not involving a public offering pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”). The shares were issued to one person, who qualified as an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act. We did not engage in any public advertising or general solicitation in connection with this transaction nor did we pay any fees or commissions in connection with the issuance of the treasury shares of common stock pursuant to the Services Agreement.

(c) The following table presents information with respect to purchases of common stock of the Company made during the quarter ended July 28, 2012 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)

April 29, 2012 through May 26, 2012	—	$	—	—	$	52,606

May 27, 2012 through June 30, 2012	260,000	$	28.58	260,000	$	45,176

July 1, 2012 through July 28, 2012	—	$	—	—	$	45,176

Total	260,000	$	28.58	260,000	$	45,176

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

ITEM 5 — OTHER INFORMATION

On August 31, 2012, we filed a Statement of Change of Registered Office/Agent with the Texas Secretary of State to effect a change in the Registered Agent in the State of Texas for The Men’s Wearhouse, Inc., a copy of which is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q and is incorporated into this Item 5 by reference.

Part and Item No.		Page No.

PART I — Financial Information

Item 1 — Condensed Consolidated Financial Statements

General Information		2

Condensed Consolidated Balance Sheets as of July 28, 2012 (unaudited), July 30, 2011 (unaudited) and January 28, 2012		3

Condensed Consolidated Statements of Earnings for the Three and Six Months Ended July 28, 2012 (unaudited) and July 30, 2011 (unaudited)		4

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended July 28, 2012 (unaudited) and July 30, 2011 (unaudited)		5

Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 28, 2012 (unaudited) and July 30, 2011 (unaudited)		6

Notes to Condensed Consolidated Financial Statements (unaudited)		7

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

Item 3 — Quantitative and Qualitative Disclosures about Market Risk		33

Item 4 — Controls and Procedures		33

PART II — Other Information

Item 1 — Legal Proceedings		34

Item 1A — Risk Factors		34

Item 2— Unregistered Sales of Equity Securities and Use of Proceeds		35

Item 5 — Other Information		35

Item 6 — Exhibits		36

SIGNATURES		36

Exhibit Number		Exhibit Index

3.1	—	Statement of Change of Registered Office/Agent with the Texas Secretary of State (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).
101.1	—	The following financial information from The Men’s Wearhouse, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended July 28, 2012, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Earnings; (iii) the Condensed Consolidated Statements of Other Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements.

Dated: September 6, 2012	THE MEN’S WEARHOUSE, INC.


	By	/s/ DIANA M. WILSON
	Diana M. Wilson
	Executive Vice President, Interim Chief Financial Officer, Treasurer and Principal Financial Officer

Exhibit Number		Exhibit Index

3.1	—	Statement of Change of Registered Office/Agent with the Texas Secretary of State (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).
101.1	—	The following financial information from The Men’s Wearhouse, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended July 28, 2012, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Earnings; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements.