Investor Presentation
Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking information, including the Company s statements regarding its future outlook. In addition, words such as expects, assumes, anticipates, envisions, targets, goals, projects, intends, plans, believes, seeks, estimates, guidance, may, projections, and business outlook, variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements that we make herein are not guarantees of future performance and actual results may differ materially from those in such forward-looking statements as a result of various factors. Factors that might cause or contribute to such differences include, but are not limited to: actions or inactions by governmental entities; domestic and international macro-economic conditions; inflation or deflation; the loss of, or changes in, key personnel; success, or lack thereof, in formulating or executing our internal strategies and operating plans including new store and new market expansion plans; cost reduction initiatives and revenue enhancement strategies; changes in demand for clothing or rental product; market trends in the retail business; customer confidence and spending patterns; changes in traffic trends in our stores; customer acceptance of our merchandise strategies including custom clothing; performance issues with key suppliers; disruptions in our supply chain; severe weather; foreign currency fluctuations; government export and import policies; advertising or marketing activities of competitors; the impact of cybersecurity threats or data breaches; and legal proceedings. Forward-looking statements are intended to convey the Company s expectations about the future, and speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by applicable law. However, any further disclosures made on related subjects in our subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all written or oral forward-looking statements that are made by or attributable to us are expressly qualified in their entirety by the cautionary statements contained or referenced in this section. 2
Agenda 1 Business Overview 2 Growth Strategy 3 Key Financial Highlights 4 Appendix - Non-GAAP Reconciliations 3
Business Overview
Differentiated Market Leader in Men s Tailored Clothing 1 Market leading specialty retailer of men s tailored clothing in U.S. and Canada 2 Expert service and personalized products drive superior customer experience 3 Convenient omni-channel network makes shopping easy 4 Compelling strategies to drive sales and EPS growth 5 Focus on shareholder value creation through disciplined capital allocation 5
Market Leading Specialty Retailer in Attractive Category Menswear The U.S. menswear market is large and stable with over $85BN in sales in 2017 The men s segment is less exposed to fashion risk than other apparel categories Men s suiting requires the need for optimal fit, which provides an inherent defense against pure online players U.S. Menswear Market ($ in BN) $94 $91 $88 $85 $98 $101 Formal Tailored Polished Casual 2017 2018 2019 2020 2021 2022 Source: Euromonitor 6
Expert Stylists and Tailors Give Men a Reason to Shop in Person Men Want Help Putting Outfits Together Experienced wardrobe consultants and tailors help men feel confident and love the way they look. They help men: Find the right fit Complete the outfit Tailor exact measurements 7
Personalized, Exclusive Products Keep Men Coming Back The Custom Experience We make buying a custom suit as easy and affordable to buy as a suit off the rack More than doubled custom sales in FY17 to over $100 million Three-week delivery for Made-in-America custom clothing Performance Exclusives Performance fabrics increasingly popular Temperature regulating Kenneth Cole AWEARTECH exclusively at Men s Wearhouse and TravelTech at Jos. A. Bank New introductions planned in 2018 Men s Wearhouse and Jos. A. Bank offer 70% and 95% exclusive brands, respectively. 8
Store Located within 10 Miles of 70% of U.S. & Canada Customers FY 2017 Footprint 1,477 Stores 1 FY17 Store Count by Brand 2 16 15 2 5 1 K&G 90 Moores 126 113 13 23 9 4 22 12 2 3 21 2 1 7 11 25 14 24 62 6 11 8 54 25 18 49 73 66 52 26 5 14 51 25 48 22 9 22 47 120 20 1 9 1 3 4 2 45 25 5 47 5 5 48 Men s Wearhouse 7701 Jos. A. Bank 491 1 95 1 85% of stores located in strip or power centers, not malls Source: Company filings as of 2/3/18; 1 Includes one Joseph Abboud store in New York and 51 Men s Wearhouse and Tux stores 9
Convenient Omni-Channel Network Makes Shopping Easy Comprehensive Omni-Channel Capabilities Across Formats Same day shipping Ship to store Mobile app Reserve online, pick up in store Ship from store Int l shipping to >100 countries 10
Growth Strategy
Three Key Growth Strategies 1 Expand custom clothing business disrupt the mass market for suits 2 Increase brand awareness and marketing effectiveness 3 Enhance omni-channel experience make shopping easier, more personalized 12
Multi-Pronged Custom Growth Strategy With Large Addressable Market Launch New Products Attract New Customers Improve Delivery Speed 2017 $100M+ Up >100% y-o-y Increase Penetration with Existing Customers 13
Custom Enhances the Customer Experience; Increases Operating Profit Higher Average Unit Retail Higher Gross Margin Dollars More Customer Satisfaction Greater Customer Frequency Higher Average Annual Spend Greater Inventory Efficiency 14
Marketing Strategy Driving New-to-File Customers Shift Messaging Mix to More Branding vs. Promotion New branding campaigns launched in August 2017 for Men s Wearhouse, September 2017 for Jos. A. Bank Elevated story-telling about what our brands stand for and offer our customers Generated lift in New-To-File customers for both brands Shift Channel Mix to More Digital vs. Broadcast FY 17 advertising expense down 40 basis points as a percent of sales, reflecting more efficient mix of broadcast and digital Social media and videos complement broadcast campaigns Digital marketing (SEM, SEO, email) driving traffic to stores and e-commerce sites 15
Omni-Channel Approach Serves Customers Wherever They Want to Shop Ongoing Technology Road Map to Make Shopping Easier and Translate the High Touch In-Store Experience to the Online Channel Launched guided shopping tool Refined product recommendations Streamlined checkout Increased infrastructure investments Driving more traffic to stores 65 Million Visits in FY 2017, up 8% Y-o-Y 16
Financial Highlights
Strong Free Cash Flow and Focus on Debt Reduction ($ in mm) Free Cash Flow 1 Total Debt 2 $143 $256 $1,656 $1,596 $1,588 $1,541 $1,476 $1,397 $16 2015 2016 2017 Total liquidity 3 $451 $486 $609 2015 2016 2017 Source: Company filings 1 Calculated as (Cash from operations Capital Expenditures); see appendix for reconciliation 2 Calculated net of deferred financing costs and OID 3 Calculated as (Cash + Undrawn R/C availability) 4 Calculated as Total Debt/(Adjusted EBIT + Depreciation and Amortization) 2015 2016 Q1'17 Q2'17 Q3'17 Q4'17 Debt / LTM Adjusted 4.7x 4.5x 4.2x 3.9x EBITDA 4 During FY16 and FY17, reduced debt balance by $259mm, including the repurchase of $154mm of Sr. Notes in FY17 TLRD benefits from an enhanced liquidity profile with improved cash position and undrawn R/C Free cash flow has increased from $16mm at FY15 to $256mm at FY17 In Q1 18, the Company prepaid $93mm on its Term Loan in conjunction with the refinancing 18
Cost Structure Reflects Smaller Store Fleet and SG&A Savings TLRD has completed a store rationalization plan and profit improvement program targeting SG&A cost reduction Adjusted SG&A 1 expense / % of sales 36.0% 35.8% 35.1% 1,846 1,767 1,710 1,667 1,663 2 1,484 1,480 1,477 2015 2016 2017 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Source: Company filings 1 Includes advertising expense 2 Primarily due to closure of Macy s tuxedo shops 19
Return to Positive Retail Comps in 2017 Comparable sales by brand FY 2014 Q1 Q2 Q3 Q4 FY 2015 Q1 Q2 Q3 Q4 FY 2016 Q1 Q2 Q3 Q4 FY 2017 3.9% 6.8% 3.1% 5.3% 4.3% 4.9% (3.5)% 2.9% 0.1% (2.2)% (0.6)% (3.1)% (2.2)% (1.0)% 2.3% (1.1)% (2.5)% (1.1)% (9.0)% (14.4)% (32.3)% (16.3)% (16.0)% (16.3)% (9.8)% 3.6% (9.5)% 3.5% 7.8% 4.9% 5.3% 5.4% Positive comp in Q4 17, lapping strong Q4 16 3.7% 7.3% 6.7% 3.7% 1.9% 5.0% 0.2% (2.2)% (3.0)% (5.2)% (2.4)% (7.4)% (1.7)% (0.6)% (1.7)% (3.1)% 8.6% 0.8% 0.7% (5.4)% (2.7)% (1.7)% (3.9)% (1.5)% (0.4)% (5.4)% (2.6)% (5.3)% 0.3% (2.6)% (1.4)% (2.0)% Overall Retail segment 2.3% 4.4% 0.0% (1.1)% (10.6%) (2.0%) (6.2)% (2.8)% (2.6)% (1.2)% (3.2)% (2.4)% 0.1% 0.1% 2.5% 0.1% Return to positive comps overall Source: Company information and filings 20
23% Adjusted EPS Growth in 2017 ($ in mm) Revenue Adj. EPS 2 1 MW Jos. A. Bank K&G Moores Other $3,496 $3,379 $3,304 277 223 314 286 338 215 216 330 324 $1.80 $1.79 $2.20 867 750 735 1,791 1,771 1,743 2015 2016 2017 Adj. Gross Margin 2 ($ in mm) 20151 2016 2 2017 3 Adj. EBITDA 2 42.9% 42.6% 42.7% $359 $337 $355 2015 2016 2017 2015 2016 2017 Source: Company filings Note: 1 Includes Corporate Apparel and MW Cleaners (which was recently sold in March 2018 for $18mm); 2 Adjusted EPS, Gross Margin and EBITDA reconciliation at the end of this presentation 21
2018 Financial Priorities 1 Execute growth initiatives to grow market share and drive positive comparable sales performance 2 Maintain healthy gross margin rate through disciplined promotional activity and sales from exclusive merchandise 3 Continue to focus on improving cost structure 4 Reduce interest expense with continued focus on debt pay down 5 Generate strong cash flow from operations through improved working capital management and unlocking additional cost savings 6 Invest capex to support growth initiatives; maintain dividend and use remaining free cash flow to pay down debt 22
FY 2018 Outlook 1 GAAP Diluted EPS $2.35 to $2.50 Retail Comp Sales Modest Positive Effective Tax Rate ~25% Store Closures ~Net 10 Capital Expenditures ~$100 million Depreciation & Amortization ~$100 million Source: Company information and filings; 1 FY 2018 Outlook as of March 14, 2018 23
APPENDIX GAAP/NON-GAAP RECONCILIATIONS
GAAP to Non-GAAP Reconciliations FY17 ($ in millions, except per share amounts) GAAP Results Macy's Termination (1) Divestiture of MW Cleaners (2) Total Adjustments Non-GAAP Adjusted Results GAAP to Non-GAAP Adjusted Statement of Earnings for FY17: Rental services gross margin $ 358,382 $ 1,416 $ - $ 1,416 $ 359,798 Total retail gross margin 1,342,961 1,416-1,416 1,344,377 Total gross margin 1,408,766 1,416-1,416 1,410,182 Adjusted GM 42.7% Selling, general and administrative expenses 1,000,892 (15,736) - (15,736) 985,156 Goodwill impairment charge 1,500 - (1,500) (1,500) - Operating income 229,416 17,152 1,500 18,652 248,068 Provision for income taxes (3) 38,251 6,756 45,007 Net earnings 96,703 11,896 108,599 Net earnings per diluted common share allocated to common shareholders $ 1.95 0.25 $ 2.20 (1) Consists of $12.3 million of termination costs, $1.4 million of rental product write-offs, $1.2 million of asset impairment charges and $2.3 million of other costs, all related to the retail segment. (2) Consists of a $1.5 million goodwill impairment charge for MW Cleaners and related to the retail segment. (3) The tax effect of the excluded items is computed as the difference between tax expense on a GAAP basis and tax expense on an adjusted non-gaap basis. The adjusted non- GAAP rate also excludes one-time items primarily related to a favorable tax resolution of $18.3 million offset by a change in our position on permanently reinvested foreign earnings and other impacts of the recently enacted Tax Cuts and Jobs Act of 2017 totaling $17.2 million. Source: Company Filings 25
GAAP to Non-GAAP Reconciliations FY16 ($ in millions, except per share amounts) GAAP Results Jos. A. Bank Integration (1) Profit Improvement (2) Other (3) Total Adjustments Non-GAAP Adjusted Results GAAP to Non-GAAP Adjusted Statement of Earnings for FY16: Retail clothing product gross margin $ 1,352,283 $ - $ - $ (23) $ (23) $ 1,352,260 Rental services gross margin 374,680 - - 1,069 1,069 375,749 Alteration and other services gross margin 58,131-255 - 255 58,386 Occupancy costs (431,298) 2,126 (4,109) (564) (2,547) (433,845) Total retail gross margin 1,353,796 2,126 (3,854) 482 (1,246) 1,352,550 Total gross margin 1,441,468 2,126 (3,854) 482 (1,246) 1,440,222 Adjusted GM 42.6% Selling, general and administrative expenses 1,099,328 (6,656) (69,848) (1,754) (78,258) 1,021,070 Asset impairment charges 19,358 - (2,093) (17,265) (19,358) - Operating income (4) 132,826 8,782 68,087 19,501 96,370 229,196 Gain on exinguishment of debt, net (5) Provision for income taxes (6) 6,625 33,436 40,061 Net earnings 24,956 61,197 86,153 Net earnings per diluted common share allocated to common shareholders $ 0.51 1.28 $ 1.79 (1) Primarily consists of severance costs and accelerated depreciation. (2) Primarily consists of $43.1 million of lease termination costs, $15.1 million of consulting costs and $6.1 million of severance costs. (3) Primarily consists of asset impairment charges related to Macy's and severance costs. (4) Of the $96.4 million in total adjustments to operating income, $69.9 million relates to the retail segment and $26.5 million relates to shared services. (5) Recast to remove adjustments previously made for gains/losses on extinguishment of debt, which changes non-gaap diluted EPS to $1.79 from $1.76. (6) The tax effect of the excluded items is computed as the difference between tax expense on a GAAP basis and tax expense on an adjusted non-gaap basis. Source: Company Filings 26
GAAP to Non-GAAP Reconciliations FY15 ($ in millions, except per share amounts) GAAP Results Acquisition and Integration (1) Purchase Accounting Allocation (2) Profit Improvement (3) Goodwill & Intangible Asset Impairments (4) Other (5) Total Adjustments Non-GAAP Adjusted Results GAAP to Non-GAAP Adjusted Statement of Earnings for FY15: Retail clothing product gross margin Occupancy costs $ 1,439,611 $ 63 $ 969 $ 11,009 $ - $ - $ 12,041 $ 1,451,652 (455,486) 804 1,610 - - - 2,414 (453,072) Total retail gross margin Total gross margin Selling, general and administrative expenses Goodwill and intangible asset impairment charges Asset impairment charges 1,414,087 867 2,579 11,009 - - 14,455 1,428,542 1,484,423 867 2,579 11,009 - - 14,455 1,498,878 Adjusted GM 42.9% 1,085,900 (17,836) (8,121) (1,775) - (3,068) (30,800) 1,055,100 1,243,354 - - (5,533) (1,237,821) - (1,243,354) - 27,480 - - (23,146) - (4,074) (27,220) - Operating income (6) (1,077,296) 18,703 10,700 41,463 1,237,821 7,142 1,315,829 238,533 Loss on extinguishment of debt (12,675) 12,675 12,675 - Provision for income taxes (7) (169,042) 214,148 45,106 Net earnings (1,026,719) 1,114,356 87,637 Net earnings per diluted common share allocated to common shareholders $ (21.26) 23.06 $ 1.80 (1) Acquisition & integration primarily relates to Jos. A. Bank. (2) Consists of depreciation and amortization adjustments resulting from the recognition of intangible assets and step up in fair value for PP&E for Jos. A. Bank. (3) Consists of $28.7 million in intangible and other asset impairment charges, $11.0 million of inventory write-downs and $1.8 million of consulting costs. (4) Consists of asset impairment charges related to Jos. A. Bank with $769.0 million for goodwill, $425.9 million for trade name, $41.5 million for customer relationships and $1.4 million for favorable leases. (5) Primarily consists of $4.1 million in store impairment charges. (6) Of the $1,315.8 million in total adjustments to operating (loss) income, $1,310.9 million relates to the retail segment and $4.8 million relates to shared services. (7) The tax effect of the excluded items is computed as the difference between tax expense on a GAAP basis and tax expense on an adjusted non-gaap basis. Source: Company Filings 27
GAAP to Non-GAAP Reconciliations Adjusted EBITDA ($ in millions) 2015 2016 2017 Adjusted EBITDA Reconciliation: Net Earnings (Loss) ($1,026.7) $25.0 $96.7 Plus: Provision (Benefit) for Income Taxes (169.0) 6.6 38.3 Plus: Interest Expense 106.0 103.1 100.5 Less: Gain (Loss) on Extinguishment of Debt (12.7) 1.7 5.4 Less: Interest Income 0.2 0.2 0.6 EBIT ($1,077.3) $132.8 $229.4 Plus: Acquisition & Integration Charges for Jos. A. Bank 18.7 0.0 0.0 Plus: Purchase Accounting Allocation Charges 10.7 0.0 0.0 Plus: Profit Improvement 41.5 68.1 0.0 Plus: Goodwill & Intangible Asset Impairments 1,237.8 0.0 1.5 Plus: Jos. A. Bank Integration 0.0 8.8 0.0 Plus: Macy's Termination 0.0 0.0 17.2 Plus: Other 7.1 19.5 0.0 Adjusted EBIT $238.5 $229.2 $248.1 Plus: Depreciation and amortization 120.4 107.9 106.5 Adjusted EBITDA $358.9 $337.1 $354.6 Note: Added depreciation and amortization to the Company s adjusted EBIT calculations to arrive at adjusted EBITDA; may not sum due to rounding Source: Company Filings 28
GAAP to Non-GAAP Reconciliations Free Cash Flow ($ in millions) 2015 2016 2017 Free Cash Flow Reconciliation: Net cash provided by operating activities $131.7 $242.6 $350.8 Capex (115.5) (99.7) (95.0) Free Cash Flow Reconciliation: $16.2 $142.9 $255.8 Source: Company Filings 29