MENS WEARHOUSE INC - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2004 or

[ ] 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 (IRS Employer
Incorporation or Organization) Identification Number)

5803 GLENMONT DRIVE 77081-1701
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)

(713) 592-7200
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
------------------- -------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act:

NONE

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 [ ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X]. No [ ].

The aggregate market value of the voting stock held by non-affiliates of
the registrant, based on the closing price of shares of common stock on the New
York Stock Exchange on August 2, 2003, was approximately $829.7 million.

The number of shares of common stock of the registrant outstanding on April
9, 2004 was 36,102,071 excluding 6,979,423 shares classified as Treasury Stock.

DOCUMENTS INCORPORATED BY REFERENCE

DOCUMENT INCORPORATED AS TO
-------- ------------------

Notice and Proxy Statement for the Annual Meeting of Part III: Items 10,11,12 and 13
Shareholders scheduled to be held June 30, 2004.

FORM 10-K REPORT INDEX

10-K PART AND ITEM NO. PAGE NO.
- ---------------------- --------

PART I
Item 1. Business....................................................................... 1
Item 2. Properties..................................................................... 7
Item 3. Legal Proceedings.............................................................. 9
Item 4. Submission of Matters to a Vote of Security Holders............................ 10

PART II
Item 5. Market for the Company's Common Equity and Related Stockholder Matters......... 11
Item 6. Selected Financial Data........................................................ 12
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations..................................................................... 14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk..................... 24
Item 8. Financial Statements and Supplementary Data.................................... 25
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure..................................................................... 43
Item 9A. Controls and Procedures........................................................ 43

PART III
Item 10. Directors and Executive Officers of the Company................................ 43
Item 11. Executive Compensation......................................................... 43
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters............................................................ 43
Item 13. Certain Relationships and Related Transactions................................. 43
Item 14. Principal Accountant Fees and Services......................................... 43

PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K................ 44

PART I

ITEM 1. BUSINESS

GENERAL

The Men's Wearhouse began operations in 1973 as a partnership and was
incorporated as The Men's Wearhouse, Inc. (the "Company") under the laws of
Texas in May 1974. Our principal corporate and executive offices are located at
5803 Glenmont Drive, Houston, Texas 77081-1701 (telephone number 713/592-7200),
and at 40650 Encyclopedia Circle, Fremont, California 94538-2453 (telephone
number 510/657-9821), respectively. Unless the context otherwise requires,
"Company", "we", "us" and "our" refer to The Men's Wearhouse, Inc. and its
wholly owned or controlled subsidiaries.

Our website address is www.menswearhouse.com. Through the investor
relations section of our website, we provide free access to our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
all amendments to those reports as soon as reasonably practicable after such
material is electronically filed with or furnished to the Securities and
Exchange Commission ("SEC"). The SEC also maintains a website that contains the
Company's filings at www.sec.gov.

THE COMPANY

We are one of the largest specialty retailers of men's suits in the
United States and Canada. At January 31, 2004, our U.S. operations included 579
retail apparel stores in 44 states and the District of Columbia, primarily
operating under the brand names of Men's Wearhouse and K&G, with approximately
25% of our locations in Texas and California. At January 31, 2004, our Canadian
operations included 114 retail apparel stores in 10 provinces operating under
the brand name of Moores Clothing for Men. Below is a brief description of our
brands:

Men's Wearhouse

Under the Men's Wearhouse brand, we target middle and upper-middle
income men by offering quality merchandise at everyday low prices. In addition
to value, we believe we provide a superior level of customer service. Men's
Wearhouse stores offer a broad selection of designer, brand name and private
label merchandise at prices we believe are typically 20% to 30% below the
regular prices found at traditional department and specialty stores. Our
merchandise includes suits, sport coats, slacks, business casual, sportswear,
outerwear, dress shirts, shoes and accessories. We concentrate on business
attire that is characterized by infrequent and more predictable fashion changes.
Therefore, we believe we are not as exposed to trends typical of more
fashion-forward apparel retailers, where significant markdowns and promotional
pricing are more common. At January 31, 2004, we operated 506 Men's Wearhouse
stores in 44 states and the District of Columbia. These stores are referred to
as "Men's Wearhouse stores" or "traditional stores".

We also began a tuxedo rental program in selected Men's Wearhouse
stores during 1999. We believe this program generates incremental business for
us without significant incremental personnel or real estate costs and broadens
our customer base by drawing first-time and younger customers into our stores.
We completed the rollout of this program to our traditional stores during the
first quarter of fiscal 2002 and now offer tuxedo rentals in substantially all
of our Men's Wearhouse stores.

K&G

Under the K&G brand, we target the more price sensitive customer. The
K&G brand was acquired as a result of our combination with K&G Men's Center,
Inc. in June 1999. At January 31, 2004, we operated 73 K&G stores in 23 states,
which includes five stores operating under the name The Suit Warehouse (four in
the metropolitan Detroit, Michigan area and one in Toledo, Ohio). Thirty-five of
the K&G stores offer ladies' career apparel that is also targeted to the more
price sensitive customer.

We believe that K&G's more basic, value-oriented superstore approach
appeals to certain customers in the apparel market. K&G offers first-quality,
current-season apparel and accessories comparable in quality to that of
traditional department and specialty stores, at everyday low prices we believe
are typically 30% to 70% below the regular prices charged by such stores. K&G's
merchandising strategy emphasizes broad assortments across all major categories,
including tailored clothing, casual sportswear, dress furnishings, footwear and
accessories. This merchandise selection, which includes brand name as well as
private label merchandise, positions K&G to attract a

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wide range of customers in each of its markets. As with the Men's Wearhouse
brand, K&G's philosophy of delivering everyday value distinguishes K&G from
other retailers that adopt a more promotional pricing strategy.

Moores

Under the Moores brand, we target middle and upper-middle income men in
Canada by offering quality merchandise at everyday low prices. Moores, which was
acquired as a result of our combination with Moores Retail Group Inc. in
February 1999, is one of Canada's leading specialty retailers of men's suits,
with 114 retail apparel stores in 10 Canadian provinces at January 31, 2004.
Similar to the Men's Wearhouse stores, Moores stores offer a broad selection of
quality merchandise at prices we believe are typically 20% to 30% below the
regular prices charged by traditional Canadian department and specialty stores.
Moores focuses on conservative, basic tailored apparel that we believe limits
exposure to changes in fashion trends and the need for significant markdowns.
Moores' merchandise consists of suits, sport coats, slacks, business casual,
dress shirts, sportswear, outerwear, shoes and accessories.

In October 2003, we extended our tuxedo rental program to our Moores
stores, and, as of January 31, 2004, offered tuxedo rentals in 48 Moores stores.
Subsequent to year end, the tuxedo program has been extended to the remainder of
the Moores stores.

Moores distinguishes itself from other Canadian retailers of menswear
by manufacturing a significant portion of the tailored clothing for sale in its
stores. Moores conducts its manufacturing operations through its wholly owned
subsidiary, Golden Brand Clothing (Canada) Ltd. ("Golden Brand"), which is the
second largest manufacturer of men's suits and sport coats in Canada. Golden
Brand's manufacturing facility in Montreal, Quebec, includes a cutting room,
fusing department, pant shop and coat shop. At full capacity, the coat shop can
produce 13,000 units per week and the pant shop can produce 23,000 units per
week. As a result of the vertical integration and the related cost savings,
Moores is able to provide greater value to its customer by offering a broad
selection of quality merchandise at everyday low prices, which the Company
believes typically range from 20% to 30% below the regular prices charged by
traditional Canadian department and specialty stores. Beginning in 1999, Golden
Brand also manufactures product for Men's Wearhouse stores.

EXPANSION STRATEGY

Our expansion strategy includes:

- opening additional Men's Wearhouse and K&G stores in new and
existing markets,

- expanding our tuxedo rental program to Moores stores,

- testing opportunities to market complementary products and
services,

- testing expanded, more fashion-oriented merchandise concepts, and

- identifying strategic acquisition opportunities, including but not
limited to international opportunities.

In general terms, we consider a geographic area served by a common
group of television stations as a single market.

On a limited basis, we have acquired store locations, inventories,
customer lists, trademarks and tradenames from existing menswear retailers in
both new and existing markets. We may do so again in the future. At present, in
2004 we plan to open approximately eleven new Men's Wearhouse stores and eight
new K&G stores, to close approximately six Men's Wearhouse stores and four K&G
stores, to expand and/or relocate approximately twelve existing Men's Wearhouse
stores and one existing K&G store and to continue expansion in subsequent years.
We believe that our ability to increase the number of traditional stores in the
United States above 550 will be limited. However, we believe that additional
growth opportunities exist through improving and diversifying the merchandise
mix, relocating stores, expanding our K&G brand and adding complementary
products and services.

In connection with our strategy of testing opportunities to market
complementary products and services, in December 2003 we acquired the assets and
operating leases for 13 retail dry cleaning and laundry facilities operating in
the metropolitan Houston, Texas area. We may open or acquire additional
facilities on a limited basis during 2004 as we test market and evaluate the
feasibility of developing a national retail dry cleaning and laundry line of
business. However, we do not expect these operations or expansion efforts to
have a material effect on our financial position, results of operations or cash
flows for 2004.

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We also plan to open six new casual clothing/sportswear concept stores
in 2004 in order to test an expanded, more fashion-oriented merchandise concept
for men and women. These stores will be 3,000 to 3,500 square feet and will be
located in high-end regional malls. They will target the 25 to 35 year old
customer with Latin-inspired store designs and offerings. We do not expect these
operations to have a material effect on our financial position, results of
operations or cash flows for 2004.

MERCHANDISING

Our stores offer a broad selection of designer, brand name and private
label men's business attire, including a consistent stock of core items (such as
navy blazers, tuxedos and basic suits). Although basic styles are emphasized,
each season's merchandise reflects current fabric and color trends, and a small
percentage of inventory, accessories in particular, are usually more fashion
oriented. The broad merchandise selection creates increased sales opportunities
by permitting a customer to purchase substantially all of his tailored wardrobe
and accessory requirements, including shoes, at our stores. Within our tailored
clothing, we offer an assortment of styles from a variety of manufacturers and
maintain a broad selection of fabrics, colors and sizes. Based on the experience
and expertise of our management, we believe that the depth of selection offered
provides us with an advantage over most of our competitors.

The Company's inventory mix includes "business casual" merchandise
designed to meet demand for such products resulting from more relaxed dress
codes in the workplace. This merchandise consists of tailored and non-tailored
clothing (sport coats, casual slacks, knits and woven sports shirts, sweaters
and casual shoes) that complements the existing product mix and provides
opportunity for enhanced sales without significant inventory risk.

We do not purchase significant quantities of merchandise overruns or
close-outs. We provide recognizable quality merchandise at consistent prices
that assist the customer in identifying the value available at our stores. We
believe that the merchandise at Men's Wearhouse and Moores stores is generally
offered 20% to 30% below traditional department and specialty store regular
prices and that merchandise at K&G stores is generally 30% to 70% below regular
retail prices charged by such stores. A ticket is affixed to each item, which
displays our selling price alongside the price we regard as the regular price of
the item at traditional department and specialty stores.

By targeting men's business attire, a category of men's clothing
characterized by infrequent and more predictable fashion changes, we believe we
are not as exposed to trends typical of more fashion-forward apparel retailers.
This allows us to carry basic merchandise over to the following season and
reduces the need for markdowns; for example, a navy blazer or gray business suit
may be carried over to the next season. Our Men's Wearhouse and Moores stores
have an annual sale that starts around Christmas and runs through the month of
January, during which prices on many items are reduced 20% to 50% off the
everyday low prices. This sale reduces stock at year-end and prepares for the
arrival of the new season's merchandise. We also have a similar event in
mid-summer; however, the level of advertising for promotion of the summer event
is lower than that for the year-end event.

During 2001, 2002 and 2003, 56.8%, 56.5% and 55.2%, respectively, of
our total net merchandise sales were attributable to tailored clothing (suits,
sport coats and slacks) and 43.2%, 43.5% and 44.8%, respectively, were
attributable to casual attire, sportswear, shoes, shirts, ties, outerwear and
other.

In addition to accepting cash, checks or nationally recognized credit
cards, we offer our own private label credit card to Men's Wearhouse customers
and, in May 2002, we introduced a private label credit card to our Moores
customers. We have contracted with a third-party vendor to provide all necessary
servicing and processing and to assume all credit risks associated with a
private label credit card program. We believe that the private label credit card
provides us with an important tool for targeted marketing and presents an
excellent opportunity to communicate with our customers. During 2003, our
customers used the private label credit card for approximately 16% of our sales
at the Men's Wearhouse brand and approximately 10% of our sales at the Moores
brand.

CUSTOMER SERVICE AND MARKETING

The Men's Wearhouse and Moores sales personnel are trained as clothing
consultants to provide customers with assistance and advice on their apparel
needs, including product style, color coordination, fabric and garment fit. For
example, clothing consultants at Men's Wearhouse stores attend an intensive
training program at our training facility in Fremont, California, which is
further supplemented with weekly store meetings, periodic merchandise meetings
and frequent interaction with all levels of store management.

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We encourage our clothing consultants to be friendly and knowledgeable
and to promptly greet each customer entering the store. Consultants are
encouraged to offer guidance to the customer at each stage of the
decision-making process, making every effort to earn the customer's confidence
and to create a professional relationship that will continue beyond the initial
visit. Clothing consultants are also encouraged to contact customers after the
purchase or pick-up of tailored clothing to determine whether customers are
satisfied with their purchases and, if necessary, to take corrective action.
Store personnel have full authority to respond to customer complaints and
reasonable requests, including the approval of returns, exchanges, refunds,
re-alterations and other special requests, all of which we believe helps promote
customer satisfaction and loyalty.

K&G stores are designed to allow customers to select and purchase
apparel by themselves. For example, each merchandise category is clearly marked
and organized by size, and suits are specifically tagged "Athletic Fit,"
"Double-Breasted," "Three Button," etc., as a means of further assisting
customers to easily select their styles and sizes. K&G employees assist
customers with merchandise selection, including correct sizing.

Each of our stores provides on-site tailoring services to facilitate
timely alterations at a reasonable cost to customers. Tailored clothing
purchased at a Men's Wearhouse store will be pressed and re-altered (if the
alterations were performed at a Men's Wearhouse store) free of charge for the
life of the garment.

Because management believes that men prefer direct and easy store
access, we attempt to locate our stores in regional strip and specialty retail
centers or in freestanding buildings to enable customers to park near the
entrance of the store.

Our total annual advertising expenditures, which were $61.2 million,
$60.1 million and $62.9 million in 2001, 2002 and 2003, respectively, are
significant. The Company advertises principally on television and radio, which
we consider the most effective means of attracting and reaching potential
customers, and our advertising campaign is designed to reinforce our various
brands.

PURCHASING AND DISTRIBUTION

We purchase merchandise from approximately 700 vendors. In 2003, no
vendor accounted for 10% or more of purchases. Management does not believe that
the loss of any vendor would significantly impact us. While we have no material
long-term contracts with our vendors, we believe that we have developed an
excellent relationship with our vendors, which is supported by consistent
purchasing practices.

We believe we obtain favorable buying opportunities relative to many of
our competitors. We do not request cooperative advertising support from
manufacturers, which reduces the manufacturers' costs of doing business with us
and enables them to offer us lower prices. Further, we believe we obtain better
discounts by entering into purchase arrangements that provide for limited return
policies, although we always retain the right to return goods that are damaged
upon receipt or determined to be improperly manufactured. Finally, volume
purchasing of specifically planned quantities purchased well in advance of the
season enables more efficient production runs by manufacturers who, in turn,
generally pass some of the cost savings back to us.

We purchase a significant portion of our inventory through a direct
sourcing program. In addition to finished product, we purchase fabric from mills
and contract with certain factories for the assembly of the finished product to
be sold in our U.S. and Canadian stores. Our direct sourcing arrangements for
fabric and assembly have been with both domestic and foreign mills and
factories. During 2001, 2002 and 2003, product procured through the direct
sourcing program represented approximately 28%, 27% and 30%, respectively, of
total inventory purchases for stores operating in the U.S. We expect that
purchases through the direct sourcing program will represent approximately 35%
of total U.S. purchases in 2004. During 2001, 2002 and 2003, our manufacturing
operations at Golden Brand provided 47%, 43% and 34%, respectively, of inventory
purchases for Moores stores and 5%, 8% and 9% during 2001, 2002 and 2003,
respectively, of inventory purchases for Men's Wearhouse stores.

To protect against currency exchange risks associated with certain
firmly committed and certain other probable, but not firmly committed, inventory
transactions denominated in a foreign currency (primarily the Euro), we enter
into forward exchange contracts. In addition, many of the purchases from foreign
vendors are financed by letters of credit.

We have entered into license agreements with a limited number of
parties under which we are entitled to use designer labels such as "Gary
Player(R)" and nationally recognized brand labels such as "Botany(R)" and
"Botany 500(R)" in return for royalties paid to the licensor based on the costs
of the relevant product. These license agreements generally limit the use of the
individual label to products of a specific nature (such as men's suits, men's

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formal wear or men's shirts). The labels licensed under these agreements will
continue to be used in connection with a portion of the purchases under the
direct sourcing program described above, as well as purchases from other
vendors. We monitor the performance of these licensed labels compared to their
cost and may elect to selectively terminate any license, as provided in the
respective agreement. We have also purchased several trademarks, including
"Cricketeer(R)," "Joseph & Feiss(R)," "Baracuta(R)", "Pronto Uomo(R)," "Linea
Uomo(R)," and "Twinhill(R)," which are used similarly to our licensed labels.
Because of the continued consolidation in the men's tailored clothing industry,
we may be presented with opportunities to acquire or license other designer or
nationally recognized brand labels.

All merchandise for Men's Wearhouse stores is received into our central
warehouse located in Houston, Texas. Merchandise for a store is picked and then
moved to the appropriate staging area for shipping. In addition to the central
distribution center in Houston, we have space within certain Men's Wearhouse
stores or separate hub warehouse facilities in the majority of our markets,
which function as redistribution facilities for their respective areas. Most
purchased merchandise for Moores and K&G stores is direct shipped by vendors to
the stores.

We lease and operate 26 long-haul tractors and 60 trailers, which,
together with common carriers, are used to transport merchandise from the
vendors to our distribution facilities and from the distribution facilities to
Men's Wearhouse stores within each market. We also lease or own 76 smaller
van-like trucks, which are used to deliver merchandise locally or within a given
geographic region.

COMPETITION

We believe that the unit demand for men's tailored clothing has
generally declined over the past decade. Our primary competitors include
specialty men's clothing stores, traditional department stores, off-price
retailers, manufacturer-owned and independently owned outlet stores and
three-day stores. Over the past several years market conditions have resulted in
consolidation of the industry. We believe that the principal competitive factors
in the menswear market are merchandise assortment, quality, price, garment fit,
merchandise presentation, store location and customer service.

We believe that strong vendor relationships, our direct sourcing
program and our buying volumes and patterns are the principal factors enabling
us to obtain quality merchandise at attractive prices. We believe that our
vendors rely on our predictable payment record and history of honoring promises,
including our promise not to advertise names of labeled and unlabeled designer
merchandise when requested. Certain of our competitors (principally department
stores) may be larger and may have substantially greater financial, marketing
and other resources than we have and therefore may have certain competitive
advantages.

SEASONALITY

Like most retailers, our business is subject to seasonal fluctuations.
In most years, over 30% of our net sales and over 45% of our net earnings have
been generated during the fourth quarter of each year. Because of the
seasonality of our business, results for any quarter are not necessarily
indicative of the results that may be achieved for the full year (see Note 10 of
Notes to Consolidated Financial Statements).

TRADEMARKS AND SERVICEMARKS

We are the owner in the United States of the trademark and servicemark
"The Men's Wearhouse(R)" and of federal registrations therefor expiring in 2010,
2009 and 2012, respectively, subject to renewal. We have also been granted
registrations for that trademark and servicemark in the 43 states (including
Texas and California) in which we currently do business (as well as the District
of Columbia) and have used those marks. We are also the owner of "MW Men's
Wearhouse (and design)(R)" and federal registrations therefor expiring in 2010
and 2011, respectively, subject to renewal. Our rights in the "The Men's
Wearhouse(R)" and "MW Men's Wearhouse (and design) (R)" marks are a significant
part of our business, as the marks have become well known through our television
and radio advertising campaigns. Accordingly, we intend to maintain our marks
and the related registrations.

We are also the owner in the United States of the servicemarks "The
Suit Warehouse(R)" and "The Suit Warehouse (and logo)," which are tradenames
used by certain of the stores in Michigan and Ohio operated by K&G, and
"K&G(R)", which is a tradename used by K&G stores. K&G stores also operate under
the tradenames "K&G Men's Superstore(R)," "K&G Men's Center(R)," "K&G
MenSmart(R)" and "K&G Ladies(R)." We own the registrations for "K&G(R)," "K&G
(stylized)(R)," "K&G For Men. For Women. For Less(R)," "K&G Men's
Superstore(R)," "K&G Men's Superstore (and design)(R) ," "K&G Ladies(R)," and
"K&G Superstore(R)." The application for the servicemark "K&G Ladies Superstore"
is pending. In addition, we own or license other

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trademarks/servicemarks used in the business, principally in connection with the
labeling of products purchased through the direct sourcing program.

We own Canadian trademark registrations for the marks "Moores The Suit
People(R)," "Moores Vetements Pour Hommes(R)," "Moores Vetements Pour Hommes
(and design)(R)," "Moores Clothing For Men(R)" and "Moores Clothing For Men (and
design)(R)." Moores stores operate under the tradenames "Moores Clothing For
Men" and "Moores Vetements Pour Hommes."

EMPLOYEES

At January 31, 2004, we had approximately 12,300 employees, of whom
approximately 9,400 were full-time and approximately 2,900 were part-time
employees. Seasonality affects the number of part-time employees as well as the
number of hours worked by full-time and part-time personnel. Approximately 984
of our employees at Golden Brand belong to the Union of Needletrades, Industrial
and Textile Employees. Golden Brand is part of a collective bargaining unit, of
which it is the largest company. The current union contract expires in November
2005.

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ITEM 2. PROPERTIES

As of January 31, 2004, we operated 579 retail apparel stores in 44
states and the District of Columbia and 114 retail apparel stores in the 10
Canadian provinces. The following table sets forth the location, by state or
province, of these stores:

Men's
Wearhouse K&G Moores
--------- --- ------

UNITED STATES
California............................................. 86
Texas.................................................. 45 12
Florida................................................ 37 2
New York............................................... 24 3
Illinois............................................... 22 5
Pennsylvania........................................... 21 3
Michigan............................................... 20 6
Ohio................................................... 18 6
Georgia................................................ 17 6
Virginia............................................... 17 2
Massachusetts.......................................... 14 2
New Jersey............................................. 13 7
Maryland............................................... 13 4
Washington............................................. 13 2
Colorado............................................... 12 2
North Carolina......................................... 12 1
Arizona................................................ 11
Missouri............................................... 10 1
Minnesota.............................................. 9 2
Tennessee.............................................. 9 1
Connecticut............................................ 8 2
Oregon................................................. 8
Indiana................................................ 7 1
Wisconsin.............................................. 7
Alabama................................................ 5 1
Utah................................................... 5
Nevada................................................. 5
Louisiana.............................................. 4 1
Kentucky............................................... 4
Kansas................................................. 3 1
Nebraska .............................................. 3
New Hampshire.......................................... 3
Oklahoma............................................... 3
South Carolina......................................... 3
Arkansas............................................... 2
Delaware............................................... 2
Iowa................................................... 2
New Mexico............................................. 2
Idaho.................................................. 1
Maine.................................................. 1
Mississippi............................................ 1
Rhode Island........................................... 1
South Dakota........................................... 1
West Virginia.......................................... 1
District of Columbia................................... 1
CANADA
Ontario................................................ 50
Quebec................................................. 23
British Columbia....................................... 14
Alberta................................................ 12
Manitoba............................................... 5
New Brunswick.......................................... 3
Nova Scotia............................................ 3
Saskatchewan........................................... 2
Newfoundland........................................... 1
Prince Edward Island................................... 1
--- -- ---
Total.............................................. 506 73 114
=== == ===

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Men's Wearhouse and Moores stores vary in size from approximately 2,950
to 15,100 total square feet (average square footage at January 31, 2004 was
5,585 square feet with 67% of stores having between 4,500 and 6,500 square
feet). Men's Wearhouse and Moores stores are primarily located in middle and
upper-middle income regional strip and specialty retail shopping centers. We
believe our customers generally prefer to limit the amount of time they spend
shopping for menswear and seek easily accessible store sites.

Men's Wearhouse and Moores stores are designed to further our strategy
of facilitating sales while making the shopping experience pleasurable. We
attempt to create a specialty store atmosphere through effective merchandise
presentation and sizing, attractive in-store signs and efficient checkout
procedures. Most of these stores have similar floor plans and merchandise
presentation to facilitate the shopping experience and sales process. Designer,
brand name and private label garments are intermixed, and emphasis is placed on
the fit of the garment rather than on a particular label or manufacturer. Each
store is staffed with clothing consultants and sales associates and has a
tailoring facility with at least one tailor.

K&G stores vary in size from approximately 5,400 to 50,000 total square
feet (average square footage at January 31, 2004 was 22,917 square feet with 44%
of stores having between 15,000 and 25,000 square feet). K&G stores are
"destination" stores located primarily in low-cost warehouses and second
generation strip shopping centers that are easily accessible from major highways
and thoroughfares. K&G has created a 25,000 square foot prototype men's and
ladies' superstore with fitting rooms and convenient check-out, customer service
and tailoring areas. K&G stores are organized to convey the impression of a
dominant assortment of first-quality merchandise and to project a no-frills,
value-oriented warehouse atmosphere. Each element of store layout and
merchandise presentation is designed to reinforce K&G's strategy of providing a
large selection and assortment in each category. We seek to make K&G stores
"customer friendly" by utilizing store signage and grouping merchandise by
categories and sizes, with brand name and private label merchandise intermixed.
We also seek to instill a sense of urgency for the customer to purchase by
opening K&G stores for business on Thursdays, Fridays, Saturdays and Sundays
only, except for a limited number of Monday holidays and an expanded schedule
for certain holiday periods when stores are open every day. Each store is
typically staffed with a manager, assistant manager and other employees who
serve as customer service and sales personnel and cashiers. Each store also has
a tailoring facility with at least one tailor.

We lease our stores on terms generally from five to ten years with
renewal options at higher fixed rates in most cases. Leases typically provide
for percentage rent over sales break points. Additionally, most leases provide
for a base rent as well as "triple net charges", including but not limited to
common area and maintenance expenses, property taxes, utilities, center
promotions and insurance. In certain markets, we lease between 1,000 and 3,000
additional square feet in either a Men's Wearhouse store or a separate hub
warehouse unit to be utilized as a redistribution facility in that geographic
area.

During 1999, we purchased a 46-acre site in Houston on which we have
developed our principal warehouse and distribution facilities. The first phase
of development, an approximately 385,000 square foot facility to support our
tuxedo rental program and our flat-packed merchandise, became operational during
2001. In early 2003, we implemented an in-house tuxedo dry cleaning plant as
part of the facility. In late 2003, we completed phase two of our development,
an addition of approximately 242,000 square feet primarily to support the tuxedo
rental program. In 2004, we plan to develop an additional 300,000 square feet in
order to accommodate the centralization of our warehouse and distribution
program for K&G. We also own a 240,000 square foot facility situated on
approximately seven acres of land in Houston, Texas which serves as an office,
warehouse and distribution facility. Approximately 65,000 square feet of this
facility is used as office space for our financial, information technology and
construction departments with the remaining 175,000 square feet serving as a
warehouse and distribution center. We also own a 150,000 square foot facility,
situated on an adjacent six acres, comprised of approximately 9,000 square feet
of office space and 141,000 square feet serving as a warehouse and distribution
center.

Our executive offices in Fremont, California are housed in a 35,500
square foot facility that we own. This facility serves as an office and training
facility. We also lease 18,788 square feet of additional office space in two
other locations and 27,000 square feet of warehouse space in Richmond,
California.

K&G leases a 100,000 square foot facility in Atlanta, Georgia which
serves as an office, distribution and store facility. Approximately 35,000
square feet of this facility is used as office space for financial, information
technology and merchandising personnel, 23,000 square feet is used as a
distribution center for store fixtures and supplies and the remaining 42,000
square feet is used as a store.

8

Moores leases a 37,700 square foot facility in Toronto, Ontario,
comprised of approximately 17,900 square feet of office space and 19,800 square
feet utilized for warehousing and distribution. Moores also leases a 48,930
square foot facility in Toronto that is utilized as its tuxedo distribution
center. In addition, Moores leases a 94,700 square foot warehouse and
distribution center facility in Montreal, Quebec, and a 230,000 square foot
facility in Montreal, Quebec comprising approximately 13,000 square feet of
office space, 37,600 square feet of warehouse space and 179,400 square feet of
manufacturing space.

The lease for the 94,700 square foot warehouse and distribution center
in Montreal will expire in early 2005. Moores does not intend to renew that
lease. Instead, Moores has made an offer to purchase vacant land from the City
of Montreal and intends to construct an approximately 80,000 square foot
facility on this land. It is anticipated that construction will begin in late
spring 2004 and that the premises will be occupied by the end of the year. The
total cost of the land, building and leasehold improvements is expected to be
approximately US$5 million.

ITEM 3. LEGAL PROCEEDINGS

On April 18, 2003, a lawsuit was filed against the Company in the
Superior Court of California for the County of Orange, Case No. 03CC00132 (the
"Orange County Suit"). On April 21, 2003, a lawsuit was filed against K&G Men's
Center, Inc. and K&G Men's Company Inc. (collectively, "K&G"), wholly owned
subsidiaries of the Company, in the Los Angeles Superior Court of California,
Case No. BC294361 (the "Los Angeles County Suit"; the Los Angeles County Suit
and the Orange County Suit shall be referred to jointly as the "Suits").

The Orange County Suit was brought as a purported class action. The Los
Angeles County Suit was brought as a multi-party action. The Suits allege
several causes of action, each based on the factual allegation that in the State
of California the Company and K&G misclassified its managers and assistant
managers as exempt from the application of certain California labor statutes.
Because of this alleged misclassification, the Suits allege that the Company and
K&G failed to pay overtime compensation and provide the required rest periods to
such employees. The Suits seek, among other things, declaratory and injunctive
relief along with an accounting as to alleged wages, premium pay, penalties,
interest and restitution allegedly due the class defendants.

On April 23, 2003, a lawsuit was filed against K&G in the Los Angeles
Superior Court of California, Case No. BC294497 (the "Tailor's Suit"). The
Tailor's Suit was brought as a multi-party action. The Tailor's Suit alleges
several causes of action, each based on the factual allegation that in the State
of California K&G misclassified the tailors working in their stores as
"independent contractors" and refused to classify them as non-exempt employees
subject to the application of certain California labor statutes. Because of this
alleged misclassification, the Tailor's Suit alleges that K&G failed to pay
hourly and overtime compensation and provide the required rest periods required
by such labor statutes. The Tailor's Suit further alleges that K&G violated
several other labor statutes and regulations as well as the California Unfair
Competition Law. It seeks, among other things, restitution, disgorgement due to
failure to comply with California labor laws, penalties, declaratory and
injunctive relief.

As a result of recent mediations, we recognized a charge in the fourth
quarter of 2003 for $3.7 million ($2.3 million, net of tax) which we believe to
be a reasonable estimate of the incremental cost we expect to incur in
connection with the proposed resolution of the Suits and the Tailor's Suit. We
believe that the Suits and the Tailor's Suit will be resolved in 2004; however,
no assurance can be given that the anticipated resolution will be realized. We
do not believe the ultimate resolution of the Suits or the Tailor's Suit will
have a material adverse effect on our financial position, results of operations
or cash flows.

On April 1, 2004, a lawsuit was filed against the Company in the
Superior Court of California for the County of Los Angeles, Case No. BC313038
(the "PII Suit"). The PII Suit, which was brought as a purported class action,
alleges two causes of action, each based on the factual allegation that the
Company requests or requires, in conjunction with a customer's use of his or her
credit card, the customer to provide personal identification information which
is recorded upon the credit card transaction form. The PII Suit seeks: (i) civil
penalties pursuant to the California Civil Code; (ii) an order enjoining the
Company from requesting or requiring that a customer provide personal
identification information which is then recorded on the transaction form; (iii)
permanent and preliminary injunctions against the Company requesting or
requiring that a customer provide personal identification information which is
then recorded on the transaction form; (iv) restitution of all funds allegedly
acquired by means of any act or practice declared by the Court to be unlawful or
fraudulent or to constitute a violation of the California Business and
Professions Code; (v) attorney's fees; and (vi) costs of suit. The court has not
yet decided whether the action may proceed as a class action. The Company
intends to vigorously defend the PII Suit. We do not believe the ultimate
resolution of the PII Suit will have a material adverse effect on our financial
position, results of operations or cash flows.

9

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended January 31, 2004.

10

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is traded on the New York Stock Exchange under the
symbol "MW." The following table sets forth, on a per share basis for the
periods indicated, the high and low sale prices per share for our common stock
as reported by the New York Stock Exchange:

HIGH LOW
------------ ------------

FISCAL YEAR 2002
First quarter ended May 4, 2002....................... $ 26.50 $ 20.29
Second quarter ended August 3, 2002................... 28.72 18.35
Third quarter ended November 2, 2002.................. 20.61 9.61
Fourth quarter ended February 1, 2003................. 20.00 13.25
FISCAL YEAR 2003
First quarter ended May 3, 2003....................... $ 17.05 $ 11.76
Second quarter ended August 2, 2003................... 26.00 15.80
Third quarter ended November 1, 2003.................. 30.90 23.95
Fourth quarter ended January 31, 2004................. 31.25 21.41

On April 9, 2004, there were approximately 1,580 holders of record and
approximately 5,900 beneficial holders of our common stock.

We have not paid cash dividends on our common stock and we currently
intend to retain all of our earnings for the future operation and expansion of
our business. Our credit agreement prohibits the payment of cash dividends on
our common stock (see Note 3 of Notes to Consolidated Financial Statements).

On October 21, 2003, we issued $130.0 million of 3.125% Convertible
Senior Notes due 2023 ("Notes") in a private placement to Bear, Stearns & Co.
Inc., Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc. and Fleet
Securities, Inc., as initial purchasers. The Notes were offered only to
"qualified institutional buyers", in accordance with Rule 144A under the
Securities Act of 1933. We received aggregate proceeds of $126.6 million,
excluding the initial purchasers' discount. A portion of the net proceeds from
the Notes was used to repay the outstanding indebtedness under our Canadian term
credit agreement and to repurchase shares of our common stock under the program
authorized by the Board in September 2003; the balance is reserved for general
corporate purposes, which may include additional purchases of our common stock
under our share repurchase program. Interest on the Notes is payable
semi-annually on April 15 and October 15 of each year, beginning on April 15,
2004. The Notes will mature on October 15, 2023. However, holders may require us
to purchase all or part of the Notes, for cash, at a purchase price of 100% of
the principal amount per Note plus accrued and unpaid interest on October 15,
2008, October 15, 2013 and October 15, 2018 or upon a designated event.
Beginning on October 15, 2008, we will pay additional contingent interest on the
Notes if the average trading price of the Notes is above a specified level
during a specified period. In addition, we may redeem all or a portion of the
Notes on or after October 20, 2008, at 100% of the principal amount of the Notes
plus any accrued and unpaid interest, contingent interest and additional
amounts, if any. We also have the right to redeem the Notes between October 20,
2006 and October 19, 2008 if the price of our common stock reaches certain
levels.

During certain periods, the Notes are convertible by holders into
shares of our common stock initially at a conversion rate of 23.3187 shares of
common stock per $1,000 principal amount of Notes, which is equivalent to an
initial conversion price of $42.88 per share of common stock (subject to
adjustment in certain events), under the following circumstances: (1) if the
closing sale price of our common stock issuable upon conversion exceeds 120% of
the conversion price under specified conditions; (2) if we call the Notes for
redemption; or (3) upon the occurrence of specified corporate transactions. Upon
conversion of the Notes, in lieu of delivering common stock we may, at our
election, deliver cash or a combination of cash and common stock. The Notes are
general senior unsecured obligations, ranking on a parity in right of payment
with all our existing and future unsecured senior indebtedness and our other
general unsecured obligations, and senior in right of payment with all our
future subordinated indebtedness. The Notes are effectively subordinated to all
of our senior secured indebtedness, and all indebtedness and liabilities of our
subsidiaries.

11

ITEM 6. SELECTED FINANCIAL DATA

The following selected statement of earnings and balance sheet
information for the fiscal years indicated has been derived from our audited
consolidated financial statements. The Selected Financial Data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and notes
thereto. References herein to years are to the Company's 52-week or 53-week
fiscal year, which ends on the Saturday nearest January 31 in the following
calendar year. For example, references to "2003" mean the fiscal year ended
January 31, 2004. All fiscal years for which financial information is included
herein had 52 weeks, except 2000 which had 53 weeks.

Financial and operating data for all periods presented reflect the
retroactive effect of the February 1999 combination with Moores Retail Group
Inc. ("Moores") and the June 1999 combination with K&G Men's Center, Inc.
("K&G"), both accounted for as a pooling of interests (see notes below).

1999 2000 2001 2002 2003
----------- ----------- ----------- ----------- -----------
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT
PER SHARE AND PER SQUARE FOOT DATA)

STATEMENT OF EARNINGS DATA:
Net sales .................................. $ 1,186,748 $ 1,333,501 $ 1,273,154 $ 1,295,049 $ 1,392,680
Gross margin ............................... 438,966 514,666 451,111 454,348 513,943
Operating income (1) ....................... 100,931 141,158 73,841 69,392 82,248
Net earnings (1) ........................... 53,045 84,661 43,276 42,412 50,026
Net earnings per share of
common stock (1):
Basic .................................... $ 1.27 $ 2.03 $ 1.06 $ 1.04 $ 1.29
Diluted .................................. $ 1.25 $ 2.00 $ 1.04 $ 1.04 $ 1.27
Weighted average shares
outstanding .............................. 41,848 41,769 40,997 40,590 38,789
Weighted average shares outstanding
plus dilutive potential common shares .... 42,452 42,401 41,446 40,877 39,295

OPERATING INFORMATION:
Percentage increase/(decrease) in
comparable US store sales (2) ............ 7.7% 3.3% (10.2)% (3.1)% 6.1%
Percentage increase/(decrease) in comparable
Canadian store sales (2) ................... 0.3% 8.3% 4.2% (2.1)% (5.1)%
Average square footage-- all stores (3) .... 6,193 6,520 7,046 7,174 7,411
Average sales per square foot of selling
space (4) ................................ $ 400 $ 406 $ 336 $ 319 $ 338

Number of retail apparel stores:
Open at beginning of the period ......... 579 614 651 680 689
Opened .................................. 54 39 32 16 13
Acquired ................................ - 1 - - -
Closed .................................. (19) (3) (3) (7) (9)
----------- ----------- ----------- ----------- -----------
Open at end of the period ............... 614 651 680 689 693

CASH FLOW INFORMATION:
Capital expenditures ....................... $ 47,506 $ 79,411 $ 64,777 $ 45,422 $ 48,700
Depreciation and amortization .............. 30,082 34,689 41,949 44,284 48,130
Purchase of treasury stock ................. 1,273 7,871 30,409 28,058 109,186

12

JANUARY 29, FEBRUARY 3, FEBRUARY 2, FEBRUARY 1, JANUARY 31,
2000 2001 2002 2003 2004
----------- ----------- ----------- ----------- -----------

BALANCE SHEET INFORMATION:
Cash.......................................... $ 77,798 $ 84,426 $ 38,644 $ 84,924 $ 132,146
Working capital............................... 280,251 316,213 301,935 325,272 356,823
Total assets.................................. 611,195 713,317 717,869 769,313 869,198
Long-term debt ............................... 46,697 42,645 37,740 38,709 131,000
Shareholders' equity.......................... 408,973 494,987 509,883 531,761 493,460

(1) On February 10, 1999, we combined with Moores, a privately owned Canadian
corporation, in exchange for securities ("Exchangeable Shares")
exchangeable for 2.5 million shares of our common stock. The Exchangeable
Shares were issued to the shareholders and option Holders of Moores in
exchange for all of the outstanding shares of capital stock and options of
Moores because of Canadian tax law considerations. As of February 3, 2001,
all Exchangeable Shares, which had substantially identical economic and
legal rights as shares of our common stock, had been converted on a
one-on-one basis to our common stock. As of January 29, 2000, there were
1.0 million Exchangeable Shares that had not yet been converted but were
reflected as common stock outstanding for financial reporting purposes by
the Company. The combination with Moores has been accounted for as a
pooling of interests.

On June 1, 1999, we combined with K&G, a superstore retailer of men's
apparel and accessories operating 34 stores in 16 states. We issued
approximately 4.4 million shares of our common stock to K&G shareholders
based on an exchange ratio of 0.43 of a share of our common stock for each
share of K&G common stock outstanding. In addition, we converted the
outstanding options to purchase K&G common stock, whether vested or
unvested, into options to purchase 228,000 shares of our common stock based
on the exchange ratio of 0.43. The combination has been accounted for as a
pooling of interests.

In 1999, in conjunction with the Moores and K&G combinations as discussed
above, we recorded transaction costs of $7.7 million, duplicative store
closing costs of $6.1 million and litigation costs of $0.9 million. These
charges in total reduced operating income by $19.0 million and net earnings
by $14.1 million; basic and diluted earnings per share of common stock were
reduced by $0.34 and $0.33, respectively. In addition, we recorded a charge
of $4.3 million related to the write-off of deferred financing costs and
prepayment penalties for the refinancing of approximately US$57 million of
Moores indebtedness.

(2) Comparable store sales data is 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. Fiscal year 2000 is calculated on a 52-week
basis.

(3) Average square footage -- all stores is calculated by dividing the total
square footage for all stores open at the end of the period by the number
of stores open at the end of such period.

(4) Average sales per square foot of selling space is calculated by dividing
total selling square footage for all stores open the entire year into total
sales for those stores.

13

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

The Men's Wearhouse opened its first store in Houston, Texas in August
1973, and we are now one of the largest specialty retailers of men's suits in
the United States and Canada. At January 31, 2004, we operated 693 retail
apparel stores with 579 stores in the United States and 114 stores in Canada.
Our U.S. stores are primarily operated under the brand names of Men's Wearhouse
(506 stores) and K&G (73 stores) in 44 states and the District of Columbia. Our
Canadian stores are operated under the brand name of Moores Clothing for Men in
ten provinces. For 2003, we had revenues of $1.393 billion and net earnings of
$50.0 million, compared to revenues of $1.295 billion and net earnings of $42.4
million in 2002 and revenues of $1.273 billion and net earnings of $43.3 million
in 2001. The more significant factors impacting these results are addressed in
the "Results of Operations" discussion below.

Under the Men's Wearhouse and Moores brands, which contributed
approximately 80% of our revenues, we target middle and upper-middle income men
by offering quality merchandise at everyday low prices. Because we concentrate
on men's "wear-to-work" business attire which is characterized by infrequent and
more predictable fashion changes, we believe we are not as exposed to trends
typical of more fashion-forward apparel retailers, where significant markdowns
and promotional pricing are more common. In addition, because this inventory mix
includes "business casual" merchandise, we are able to meet demand for such
products resulting from the trend over the past decade toward more relaxed dress
codes in the workplace. We also strive to provide a superior level of customer
service by training our sales personnel as clothing consultants and offering
on-site tailoring services in each of our stores. We believe that the quality,
value, selection and service we provide to our Men's Wearhouse and Moores
customers have been significant factors in enabling us to consistently gain
valuable market share within both the U.S. and Canadian markets for men's
tailored apparel. In addition, we have expanded our customer base and leveraged
our existing infrastructure by completing the rollout of our tuxedo rental
program to nearly all of our Men's Wearhouse stores in early 2002 and
introducing the program in 48 Moores stores in late 2003. As a percentage of
total revenues, tuxedo rentals have grown from 0.8% in 2001 to 2.5% in 2002 and
3.7% in 2003. These revenues are expected to continue to increase in 2004 as the
program matures and is extended to the remaining Moores stores.

Under the K&G brand, we target the more price sensitive customer with a
value-oriented superstore approach. K&G's merchandising strategy emphasizes
broad assortments of men's apparel across all major categories, including
tailored clothing, casual sportswear, dress furnishings, footwear and
accessories. In addition, 35 of the 73 K&G stores operating at January 31, 2004
offer ladies' career apparel that is also targeted to the more price sensitive
customer. Although K&G employees assist customers with merchandise selection,
including correct sizing, the stores are designed to allow customers to select
and purchase apparel by themselves. Each store also provides on-site tailoring
services.

Like most retailers, our business is subject to seasonal fluctuations.
In most years, more than 30% of our net sales and more than 45% of our net
earnings have been generated during the fourth quarter of each year. Because of
the seasonality of our business, results for any quarter are not necessarily
indicative of the results that may be achieved for the full year.

We opened 32 stores in 2001, 16 stores in 2002 and 13 stores in 2003.
Expansion is generally continued within a market as long as management believes
it will provide profitable incremental sales volume. Historically, new stores
have contributed significantly to increases in net sales and have also
contributed to increased net earnings. In 2004, we plan to open approximately
eleven new Men's Wearhouse stores and eight new K&G stores and to expand and/or
relocate approximately twelve existing Men's Wearhouse stores and one existing
K&G store. The average cost (excluding telecommunications and point-of-sale
equipment and inventory) of opening a new store is expected to be approximately
$0.3 million in 2004. Although we believe that our ability to increase the
number of Men's Wearhouse stores in the U.S. above 550 will be limited, we
believe that additional growth opportunities exist through improving and
diversifying the merchandise mix, relocating stores, expanding our K&G brand and
adding complementary products and services.

We have closed nineteen stores in the three years ended January 31,
2004. Generally, in determining whether to close a store, we consider the
store's historical and projected performance and the continued desirability of
the store's location. In determining store contribution, we consider net sales,
cost of sales and other direct store costs, but exclude buying costs, corporate
overhead, depreciation and amortization, financing costs and advertising. Store

14

performance is continually monitored and, occasionally, as regions and shopping
areas change, we may determine that it is in our best interest to close or
relocate a store. In 2001, three stores were closed due to substandard
performance or lease expiration. In 2002, five stores were closed due to
substandard performance or lease expiration and two stores were closed when
their operations were combined with other existing area stores. In 2003, nine
stores were closed due to substandard performance. We plan to close
approximately ten stores in 2004.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements requires the
appropriate application of accounting policies in accordance with generally
accepted accounting principles. In many instances, this also requires management
to make estimates and assumptions about future events that affect the amounts
and disclosures included in our financial statements. We base our estimates on
historical experience and various assumptions that we believe are reasonable
under the circumstances. However, since future events and conditions and their
effects cannot be determined with certainty, actual results will differ from our
estimates and such differences could be material to our financial statements.

Our accounting policies are described in Note 1 of Notes to
Consolidated Financial Statements. We consistently apply these policies and
periodically evaluate the reasonableness of our estimates in light of actual
events. Historically, we have found our accounting policies to be appropriate
and our estimates and assumptions reasonable. We believe our critical accounting
policies and our most significant estimates are those that relate to inventories
and long-lived assets, including goodwill, and our estimated liabilities for the
self-insured portions of our workers' compensation and employee health benefit
costs.

Our inventory is carried at the lower of cost or market. Cost is
determined on the average cost method for approximately 79% of our inventory and
on the retail inventory method for the remaining 21%. Our inventory cost also
includes estimated procurement and distribution costs (warehousing, freight,
hangers and merchandising costs) associated with the inventory, with the balance
of such costs included in cost of sales. We make assumptions, based primarily on
historical experience, as to items in our inventory that may be damaged,
obsolete or salable only at marked down prices and reduce the cost of inventory
to reflect the market value of these items. If actual damages, obsolescence or
market demand is significantly different from our estimates, additional
inventory write-downs could be required. In addition, procurement and
distribution costs are allocated to inventory based on the ratio of annual
product purchases to average inventory cost. If this ratio were to change
significantly, it could materially affect the amount of procurement and
distribution costs included in cost of sales.

We make judgments about the carrying value of long-lived assets, such
as property and equipment and amortizable intangibles, and the recoverability of
goodwill whenever events or changes in circumstances indicate that an
other-than-temporary impairment in the remaining value of the assets recorded on
our balance sheet may exist. We test for impairment annually or more frequently
if circumstances dictate. To estimate the fair value of long-lived assets,
including goodwill, we make various assumptions about the future prospects for
the brand that the asset relates to and typically estimate future cash flows to
be generated by these brands. Based on these assumptions and estimates, we
determine whether we need to take an impairment charge to reduce the value of
the asset stated on our balance sheet to reflect its estimated fair value.
Assumptions and estimates about future values and remaining useful lives are
complex and often subjective. They can be affected by a variety of factors,
including external factors such as industry and economic trends, and internal
factors such as changes in our business strategy and our internal forecasts.
Although we believe the assumptions and estimates we have made in the past have
been reasonable and appropriate, different assumptions and estimates could
materially impact our reported financial results. We recorded no impairment
charge as a result of our testing performed during 2002 or 2003.

We self-insure portions of our workers' compensation and employee
medical costs. We estimate our liability for future payments under these
programs based on historical experience and various assumptions as to
participating employees, health care costs, number of claims and other factors,
including industry trends and information provided to us by our insurance
broker. We also use actuarial estimates with respect to workers' compensation.
If the number of claims or the costs associated with those claims were to
increase significantly over our estimates, additional charges to earnings could
be necessary to cover required payments.

15

RESULTS OF OPERATIONS

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

FISCAL YEAR
----------------------------------
2001 2002 2003
-------- -------- --------

Net sales ................................................ 100.0% 100.0% 100.0%
Cost of goods sold, including buying and occupancy costs.. 64.6 64.9 63.1
-------- -------- --------
Gross margin ............................................. 35.4 35.1 36.9
Selling, general and administrative expenses ............. 29.6 29.7 31.0
-------- -------- --------
Operating income ......................................... 5.8 5.4 5.9
Interest expense, net .................................... 0.2 0.1 0.2
-------- -------- --------
Earnings before income taxes ............................. 5.6 5.3 5.7
Provision for income taxes ............................... 2.2 2.0 2.1
-------- -------- --------
Net earnings ............................................. 3.4% 3.3% 3.6%
======== ======== ========

2003 COMPARED WITH 2002

The following table presents a breakdown of 2002 and 2003 net sales of
the Company by stores open in each of these periods (in millions):

NET SALES
--------------------------------------
INCREASE/
STORES 2002 2003 (DECREASE)
------ ---------- ---------- ----------

13 stores opened in 2003 ..... $ -- $ 12.0 $ 12.0
16 stores opened in 2002 ..... 24.6 36.1 11.5
Stores opened before 2002 .... 1,270.4 1,344.6 74.2
---------- ---------- ----------
Total .............. $ 1,295.0 $ 1,392.7 $ 97.7
========== ========== ==========

The Company's net sales increased $97.7 million, or 7.5%, to $1.393
billion for 2003 due mainly to a $78.8 million increase in clothing and
alteration sales and an $18.3 million increase in tuxedo rental revenues. Our
U.S. 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 6.1% as improvement was experienced in
nearly all product categories. At our core Men's Wearhouse brand, a 14.9%
increase in unit suit sales helped drive increases in other product categories
as well as in alteration sales. In addition, our tuxedo rental business
continued to grow following its rollout to nearly all of the Men's Wearhouse
stores in early 2002 with tuxedo rental revenues increasing from 2.5% of total
net sales in 2002 to 3.7% in 2003. Store traffic also increased, not only from
our tuxedo rental customers, but also from efforts started in 2002 to increase
our mix of opening price point product and to increase our penetration into the
traditional clothing market. In Canada, comparable store sales for 2003
decreased 5.1% from 2002 due mainly to unusually severe and extended winter
weather conditions during the first quarter, a shorter summer sale period during
the second quarter and softer demand overall in the Canadian men's apparel
market experienced throughout 2003. However, this decrease was more than offset
by the foreign currency exchange rate translation effect from the strengthening
of the Canadian dollar.

Gross margin increased $59.6 million, or 13.1%, to $513.9 million in
2003. As a percentage of sales, gross margin increased from 35.1% in 2002 to
36.9% in 2003. This increase in gross margin percentage resulted mainly from
continued growth in our tuxedo rental business, which carries a significantly
higher incremental gross margin impact than our clothing sales, and from higher
cumulative mark-ups that produced higher clothing product margins. The gross
margin percentage was also increased as occupancy cost, which is relatively
constant on a per store basis and includes store related rent, common area
maintenance, utilities, repairs and maintenance, security, property taxes and
depreciation, decreased modestly as a percentage of sales from 2002 to 2003.
However, on an absolute dollar basis, occupancy costs increased by 5.1% from
2002 to 2003 due mainly to higher rent expense from our increased store count
and renewals of existing leases at higher rates and increased depreciation.

Selling, general and administrative ("SG&A") expenses, as a percentage
of sales, were 31.0% in 2003 compared to 29.7% in 2002, with SG&A expenditures
increasing by $46.7 million or 12.1% to $431.7 million. On an absolute dollar
basis, advertising increased by $2.8 million, store salaries increased by $15.3
million and other SG&A increased by $28.6 million. As a percentage of sales,
advertising expense decreased from 4.6% to 4.5%, store salaries increased from
12.1% to 12.3% and other SG&A expenses increased from 13.0% to 14.2%. On an
absolute dollar basis, the principal components of SG&A expenses increased
primarily due to (i) the elimination of

16

media spending reductions imposed in 2002, (ii) increased commissions and
bonuses due to higher sales, (iii) increased store and warehouse salaries,
benefits and other costs associated with a 47% increase in unit tuxedo rentals,
(iv) increased non-store salaries, benefits and other costs related to our
expansion strategies and (v) higher insurance costs. SG&A expenses were reduced
by the recognition of a $4.4 million deferred pretax gain from the sale, in
March 2002, of certain technology assets to an unrelated company regularly
engaged in the development and licensing of software to the retail industry (see
"Other Matters" herein). However, the gain recognized was more than offset by
$2.9 million in costs related to store closures, $2.5 million in costs related
to the write-off of certain technology assets and $3.7 million in litigation
costs related to certain California lawsuits.

Interest expense, net of interest income, increased from $1.3 million
in 2002 to $2.5 million in 2003. Weighted average borrowings outstanding
increased $30.2 million from the prior year to $70.0 million in 2003, and the
weighted average interest rate on outstanding indebtedness decreased from 4.9%
to 4.6%. The increase in the weighted average borrowings was due primarily to
the issuance of $130.0 million of 3.125% Notes in a private placement on October
21, 2003. A portion of the proceeds from the Notes was used to repay the balance
outstanding on our Canadian credit facility. The decrease in the weighted
average interest rate was due primarily to the lower interest rate on the Notes.
Interest expense was offset by interest income from the investment of excess
cash of $1.0 million in 2002 and $1.5 million in 2003. See further discussion of
the Notes in Note 3 of Notes to Consolidated Financial Statements and "Liquidity
and Capital Resources" herein.

Our effective income tax rate for the year ended January 31, 2004 was
37.3% compared to 37.8% for the prior year. The effective tax rate was higher
than the statutory federal rate of 35% primarily due to the effect of state
income taxes.

These factors resulted in 2003 net earnings of $50.0 million or 3.6% of
net sales, compared with 2002 net earnings of $42.4 million or 3.3% of net
sales.

2002 COMPARED WITH 2001

The following table presents a breakdown of 2001 and 2002 net sales of
the Company by stores open in each of these periods (in millions):

NET SALES
---------------------------------------
INCREASE/
STORES 2001 2002 (DECREASE)
------ ---------- ---------- ----------

16 stores opened in 2002 ........ $ -- $ 24.6 $ 24.6
32 stores opened in 2001 ........ 26.7 57.8 31.1
Stores opened before 2001 ... 1,246.5 1,212.6 (33.9)
---------- ---------- ----------
Total ............. $ 1,273.2 $ 1,295.0 $ 21.8
========== ========== ==========

The Company's net sales increased $21.8 million, or 1.7%, to $1.295
billion for 2002 due primarily to increased sales in US stores opened in 2001
and 2002, offset partially by decreased sales from stores opened prior to fiscal
2001. Comparable store sales for 2002 decreased 3.1% in the US and 2.1% in
Canada from 2001. The decrease in comparable sales for the U.S. and Canadian
stores was due mainly to continued weakness in the U.S. and Canadian economies.
Sales of men's apparel is particularly affected since buying patterns for men
are considered to be more discretionary than those in other apparel areas.

Gross margin increased $3.2 million, or 0.7%, to $454.3 million in
2002. As a percentage of sales, gross margin decreased from 35.4% in 2001 to
35.1% in 2002. This decrease in gross margin percentage predominately resulted
from an increase in occupancy cost (which is relatively constant on a per store
basis) as a percentage of sales and higher markdowns at the Men's Wearhouse
brand associated with a shift to merchandise with lower opening price points.
These decreases in the gross margin percentage were offset in part by our higher
margin tuxedo rental revenues increasing from 0.8% of total revenues in fiscal
2001 to 2.5% of total revenues in fiscal 2002. Occupancy cost, which includes
store related rent, common area maintenance, utilities, repairs and maintenance,
security, property taxes and depreciation, increased by 8.9% on an absolute
dollar basis from 2001 to 2002 due mainly to higher rent expense from our
increased store count and renewals of existing leases at higher rates, higher
property taxes and increased depreciation.

SG&A expenses, as a percentage of sales, were 29.7% in 2002 compared to
29.6% in 2001, with SG&A expenditures increasing by $7.7 million or 2.0% to
$385.0 million. On an absolute dollar basis, advertising

17

decreased by $1.1 million, store salaries increased by $10.4 million and other
SG&A decreased by $1.6 million. As a percentage of sales, advertising expense
decreased from 4.8% to 4.6%, store salaries increased from 11.4% to 12.1% and
other SG&A expenses decreased from 13.4% to 13.0%. The decrease in advertising
was due to planned reductions in media spending. The increase in store salaries
was the result of higher sales commission rates in 2002 for promotional and
other merchandise sales categories. These commission rates were put in place to
help drive the shift to lower opening price points for merchandise offerings at
the Men's Wearhouse brand. Other SG&A expenses decreased due to our focus on
reducing corporate overhead.

Interest expense, net of interest income, decreased from $2.9 million
in 2001 to $1.3 million in 2002. Weighted average borrowings outstanding
decreased $25.5 million from the prior year to $39.8 million in 2002, and the
weighted average interest rate on outstanding indebtedness decreased from 5.4%
to 4.9%. The decrease in the weighted average borrowings resulted primarily from
decreased short-term borrowings under our credit facilities. The decrease in the
weighted average interest rate was due primarily to decreases during 2002 in the
LIBOR rate. Interest expense was offset by interest income from the investment
of excess cash of $0.8 million in 2001 and $1.0 million in 2002. See "Liquidity
and Capital Resources" discussion herein.

Our effective income tax rate for the year ended February 1, 2003 was
37.8% compared to 39.0% for the prior year. The effective tax rate was higher
than the statutory federal rate of 35% primarily due to the effect of state
income taxes.

These factors resulted in 2002 net earnings of $42.4 million or 3.3% of
net sales, compared with 2001 net earnings of $43.3 million or 3.4% of net
sales.

LIQUIDITY AND CAPITAL RESOURCES

In January 2003, we replaced our existing $125.0 million revolving
credit facility which was scheduled to mature in February 2004 with a new
revolving credit agreement with a group of banks (the "Credit Agreement") that
provides for borrowing of up to $100.0 million through February 4, 2006 (with
extensions for up to two years under certain conditions). The Credit Agreement
is secured by substantially all of the stock of the subsidiaries of The Men's
Wearhouse, Inc. Advances under the new Credit Agreement bear interest at a rate
per annum equal to, at our option, the agent's prime rate or the reserve
adjusted LIBOR rate plus a varying interest rate margin up to 2.25%. The Credit
Agreement also provides for fees applicable to unused commitments ranging from
0.275% to 0.500%. The terms and conditions of the new Credit Agreement are
substantially the same as those of the replaced facility. In addition, in
January 2003, we entered into a new Canadian term credit agreement under which
we borrowed Can $62.0 million (US $40.7 million) which was used to repay
approximately Can $60.9 million (US $40.0 million) in outstanding indebtedness
of Moores under the previous term credit agreement. On October 31, 2003, we
repaid the outstanding indebtedness of Can $60.5 million (US $45.9 million). As
of January 31, 2004, there were no borrowings outstanding under the Credit
Agreement.

The Credit Agreement contains certain restrictive and financial
covenants, including the requirement to maintain a minimum level of net worth
and certain financial ratios. The Credit Agreement also prohibits payment of
cash dividends on our common stock. We are in compliance with the covenants in
the Credit Agreement as of January 31, 2004.

On October 21, 2003, we issued $130.0 million of 3.125% Notes in a
private placement. A portion of the net proceeds from the Notes was used to
repay the outstanding indebtedness under our Canadian term credit agreement and
to repurchase shares of our common stock under the program authorized by the
Board in September 2003 (see below); the balance is reserved for general
corporate purposes, which may include additional purchases of our common stock
under our share repurchase program. Interest on the Notes is payable
semi-annually on April 15 and October 15 of each year, beginning on April 15,
2004. The Notes will mature on October 15, 2023. However, holders may require us
to purchase all or part of the Notes, for cash, at a purchase price of 100% of
the principal amount per Note plus accrued and unpaid interest on October 15,
2008, October 15, 2013 and October 15, 2018 or upon a designated event.
Beginning on October 15, 2008, we will pay additional contingent interest on the
Notes if the average trading price of the Notes is above a specified level
during a specified period. In addition, we may redeem all or a portion of the
Notes on or after October 20, 2008, at 100% of the principal amount of the Notes
plus any accrued and unpaid interest, contingent interest and additional
amounts, if any. We also have the right to redeem the Notes between October 20,
2006 and October 19, 2008 if the price of our common stock reaches certain
levels.

18

During certain periods, the Notes are convertible by holders into
shares of our common stock initially at a conversion rate of 23.3187 shares of
common stock per $1,000 principal amount of Notes, which is equivalent to an
initial conversion price of $42.88 per share of common stock (subject to
adjustment in certain events), under the following circumstances: (1) if the
closing sale price of our common stock issuable upon conversion exceeds 120% of
the conversion price under specified conditions; (2) if we call the Notes for
redemption; or (3) upon the occurrence of specified corporate transactions. Upon
conversion of the Notes, in lieu of delivering common stock we may, at our
election, deliver cash or a combination of cash and common stock. The Notes are
general senior unsecured obligations, ranking on a parity in right of payment
with all our existing and future unsecured senior indebtedness and our other
general unsecured obligations, and senior in right of payment with all our
future subordinated indebtedness. The Notes are effectively subordinated to all
of our senior secured indebtedness, and all indebtedness and liabilities of our
subsidiaries.

In December 2003, we acquired the assets and operating leases for 13
retail dry cleaning and laundry facilities and issued a note payable for $1.0
million as partial consideration. The unsecured note payable is due in full in
2008 and interest compounds annually at 4.0%.

Our primary sources of working capital are cash flow from operations
and borrowings under the Credit Agreement. We had working capital of $301.9
million, $325.3 million and $356.8 million at the end of 2001, 2002 and 2003,
respectively. Historically, our working capital has been at its lowest level in
January and February, and has increased through November as inventory buildup is
financed with both vendor payables and credit facility borrowings in preparation
for the fourth quarter selling season. Working capital at the end of fiscal year
2003 is higher than fiscal year 2001 and 2002 due mainly to our increased
inventory levels and cash balances.

Our operating activities provided net cash of $52.3 million in 2001,
$113.0 million in 2002 and $118.8 million in 2003 mainly because cash provided
by net earnings, as adjusted for non-cash charges, and increases in payables and
accrued expenses more than offset cash used for other assets, inventories (2001
and 2003) and decreases in income taxes payable (2001 and 2002). Inventory
increased $22.8 million in 2001, but decreased $17.3 million in 2002. A modest
increase in net sales in 2002, combined with our inventory levels at the end of
2001 and a modification to our inventory mix at our Men's Wearhouse stores to
increase our offering of opening price point product, resulted in lower planned
inventory purchases through most of 2002. However, our buying patterns
normalized in the last quarter of 2002 and resulted in an increase of $19.5
million in payables and accrued expenses for the year. In 2003, inventories
increased $21.6 million as sales increased and we continued our normal buying
patterns. The 2003 increase of $35.5 million in payables and accrued expenses
was due to the increased inventories as well as higher bonuses earned as a
result of increased sales and higher insurance costs. Other assets increased in
each of the years primarily due to increased investment in tuxedo rental
merchandise. Income taxes payable decreased in 2001 and 2002 mainly due to
reduced earnings in 2001 and a lower effective tax rate associated with the mix
of federal and state earnings in 2002; the increase in income taxes payable in
2003 resulted from increased earnings and the timing of tax payments, offset in
part by a further reduction in the effective tax rate.

Our investing activities used net cash of $66.4 million, $41.2 million
and $54.8 million in 2001, 2002 and 2003, respectively, due mainly to capital
expenditures of $64.8 million, $45.4 million and $48.7 million in 2001, 2002 and
2003, respectively. Our capital expenditures relate to costs incurred for stores
opened, remodeled or relocated during the year or under construction at the end
of the year, distribution facility additions and infrastructure technology
investments. However, during 2002, cash used for capital expenditures was
partially offset by $6.8 million of net proceeds received from the sale of
certain technology assets to an unrelated company regularly engaged in the
development and licensing of software to the retail industry. Approximately $4.4
million of this amount was recognized as a pretax operating gain by the Company
in the first quarter of 2003 (see "Other Matters" herein). During 2003, our cash
used by investing activities also included $4.5 million for net assets acquired.

19

The following table details our capital expenditures (in millions):

2001 2002 2003
-------- -------- --------

New store construction ........................... $ 13.3 $ 5.7 $ 7.9
Relocation and remodeling of existing stores ..... 27.8 23.6 15.0
Information technology ........................... 13.2 8.4 11.5
Distribution facilities .......................... 6.4 3.4 12.2
Other ............................................ 4.1 4.3 2.1
-------- -------- --------
Total ........................................ $ 64.8 $ 45.4 $ 48.7
======== ======== ========

Property additions relating to new retail apparel stores include stores
in various stages of completion at the end of the fiscal year (three stores at
the end of 2001, no stores at the end of 2002 and eight stores at the end of
2003). Our expenditures for the relocation and remodeling of existing retail
apparel stores continue to be substantial as we have opened fewer new stores.
Capital expenditures in 2003 also include approximately $9.0 million for
expansion of our tuxedo distribution facility and additional material handling
equipment and $1.9 million for two new concept stores under construction at the
end of 2003.

We used net cash in financing activities of $30.7 million in 2001 and
$26.6 million in 2002 mainly for net payments of long-term debt and purchases of
treasury stock. As previously noted, we entered into a new Canadian credit
facility which was a term credit agreement under which we borrowed CAN$62.0
million (US $40.7 million) in January 2003. Borrowings under the term credit
agreement were used to repay approximately CAN$60.9 million (US $40.0 million)
in outstanding indebtedness of Moores under the previous term credit agreement.
In 2003, net cash used in financing activities was $19.7 million due mainly to
proceeds received from the issuance of the Notes in October 2003 and proceeds
from the issuance of our common stock for options exercised, offset by purchases
of treasury stock and the repayment of our Canadian term loan. The treasury
stock purchases were made under stock repurchase programs authorized by our
Board of Directors in January 2000, January 2001, November 2002 and September
2003. Under the first three authorized programs, we repurchased 1,185,000,
1,480,000 and 1,057,100 shares of our common stock during 2001, 2002 and 2003,
respectively, at a cost of $30.4 million, $28.1 million and $24.1 million,
respectively. The average price per share of our common stock repurchased under
these programs was $25.66, $18.96 and $22.80 during 2001, 2002 and 2003,
respectively. In September 2003, the Board of Directors authorized a program for
the repurchase of up to $100.0 million of Company common stock in the open
market or in private transactions. This authorization superceded the
approximately $1 million we had remaining under the Board's November 2002
authorization. As of January 31, 2004, we had repurchased under this program
1,405,400 shares at a cost of $42.4 million in private transactions and
1,713,400 shares at a cost of $42.6 million in open market transactions. Under
all programs during fiscal 2003, we repurchased 4,175,900 shares of our common
stock at a cost of $109.2 million with an average repurchase price of $26.15 per
share.

In connection with our share repurchase programs, we from time to time
issued put option contracts and received premiums for doing so, with the
premiums being added to our capital in excess of par and effectively reducing
the cost of our share repurchases. Under these contracts, the contract
counterparties had the option to require us to purchase a specific number of
shares of our common stock at specific strike prices per share on specific
dates. During 2002, we issued a put contract for 500,000 shares and received a
premium of $0.6 million for issuing this contract. The contract counterparty had
the option to exercise this contract at a strike price of $22.76 per share on
December 17, 2002, but contract completion was required earlier if the market
price of our common stock fell below a trigger price of $12.64 per share. During
the third quarter of 2002, the market price of our common stock fell below the
trigger price and we settled the contract by repurchasing the 500,000 shares at
$22.76 per share or $11.4 million; we recorded the shares purchased as treasury
stock. We were not obligated to issue any shares under the put contract nor were
we obligated to settle in cash.

Our primary cash requirements are to finance working capital increases
as well as to fund capital expenditure requirements which are anticipated to be
approximately $57.0 million for 2004. This amount includes the anticipated costs
of opening approximately eleven new Men's Wearhouse stores and eight new K&G
stores in 2004 at an expected average cost per store of approximately $0.3
million (excluding telecommunications and point-of-sale equipment and
inventory). It also includes approximately $10.0 million for development of
distribution facilities in Houston for our K&G brand and future business models.
The balance of the capital expenditures for 2004 will be used for
telecommunications, point-of-sale and other computer equipment and systems,
store relocations, remodeling and expansion and investment in complimentary
services and concepts. The Company anticipates that each of the eleven new Men's
Wearhouse stores and each of the eight new K&G stores will require, on average,
an initial inventory costing approximately $0.3 million and $1.1 million,
respectively (subject to the same seasonal patterns affecting inventory at all
stores), which will be funded by our revolving credit facility, trade

20

credit and cash from operations. The actual amount of future capital
expenditures and inventory purchases will depend in part on the number of new
stores opened and the terms on which new stores are leased. Additionally, the
continuing consolidation of the men's tailored clothing industry may present us
with opportunities to acquire retail chains significantly larger than our past
acquisitions. Any such acquisitions may be undertaken as an alternative to
opening new stores. We may use cash on hand, together with cash flow from
operations, borrowings under our revolving credit facility and issuances of
equity securities, to take advantage of significant acquisition opportunities.

We anticipate that our existing cash and cash flow from operations,
supplemented by borrowings under our various credit agreements, will be
sufficient to fund planned store openings, other capital expenditures and
operating cash requirements for at least the next 12 months.

As substantially all of our cash is held by five financial
institutions, we are exposed to risk of loss in the event of failure of any of
these parties. However, due to the creditworthiness of these five financial
institutions, we anticipate full performance and access to our deposits and
liquid investments.

In connection with our direct sourcing program, we may enter into
purchase commitments that are denominated in a foreign currency (primarily the
Euro). We generally enter into forward exchange contracts to reduce the risk of
currency fluctuations related to such commitments. As these forward exchange
contracts are with two 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. We may also be exposed to market risk as a result of changes in
foreign exchange rates. This market risk should be substantially offset by
changes in the valuation of the underlying transactions.

CONTRACTUAL OBLIGATIONS

As of January 31, 2004, the Company is obligated to make cash payments
in connection with its long-term debt, operating leases and purchase obligations
in the amounts listed below. In addition, we utilize letters of credit primarily
for inventory purchases. At January 31, 2004, letters of credit totaling
approximately $17.3 million were issued and outstanding.

<1 1-3 3-5 >5
CONTRACTUAL OBLIGATIONS Total Year Years Years Years
- -------------------------------- -------- -------- -------- -------- --------

Long-term debt (a) $ 131.0 $ - $ - $ 1.0 $ 130.0
Operating lease base rentals (b) 454.4 91.8 152.7 107.2 102.7
Purchase obligations (c) 15.4 15.4 - - -
-------- -------- -------- -------- --------
Total contractual obligations $ 600.8 $ 107.2 $ 152.7 $ 108.2 $ 232.7
======== ======== ======== ======== ========

(a) Long-term debt includes our $130.0 million convertible senior notes
issued in October 2003 and a $1.0 million unsecured note payable due in 2008.
These borrowings are further described in Note 3 of Notes to Consolidated
Financial Statements. The table assumes our long-term debt is held to maturity.

(b) We lease retail business locations, office and warehouse facilities,
copier equipment and automotive equipment under operating leases. Leases on
retail business locations specify minimum base rentals plus common area
maintenance charges and possible additional rentals based upon percentages of
sales. Most of the retail business location leases provide for renewal options
at rates specified in the leases. Our future operating lease obligations would
change if we exercised these renewal options and if we entered into additional
operating lease agreements. See Note 9 of Notes to Consolidated Financial
Statements for more information.

(c) Included in purchase obligations are our forward exchange contracts. At
January 31, 2004, we had 23 contracts maturing in varying increments to purchase
an aggregate notional amount of $15.4 million in foreign currency, maturing at
various dates through January 2005. See Note 8 of Notes to Consolidated
Financial Statements for more information.

OFF-BALANCE SHEET ARRANGEMENTS

Other than the operating leases, forward exchange contracts and letters
of credit discussed above, the Company does not have any off-balance sheet
arrangements that are material to its financial position or results of
operations.

21

OTHER MATTERS

In January 2000, we formed Chelsea Market Systems, L.L.C. ("Chelsea"),
a joint venture company, for the purpose of developing a new point-of-sale
software system for the Company and after successful implementation, exploring
the possibility of marketing the system to third parties. Under the terms of the
agreement forming Chelsea, we owned 50% of Chelsea and Harry M. Levy, a former
director and officer, owned 50% with the understanding that Mr. Levy would
assign, either directly or indirectly, some of his interest in Chelsea to other
persons involved in the project. The point-of-sale system was developed and
successfully deployed by the Company during 2000 and 2001. From January 2000
though March 2002, we funded and recognized as expense all of the operating
costs of Chelsea, which aggregated $4.5 million. On March 31, 2002, Chelsea sold
substantially all of its assets, primarily certain technology assets, to an
unrelated company regularly engaged in the development and licensing of software
to the retail industry. As a result of the sale by Chelsea, the Company received
a net amount of $6.8 million. Approximately $4.4 million of this amount was
recognized as a pretax operating gain by the Company in the first quarter of
2003.

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2003, the FASB issued a revised interpretation of FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51 (revised December 2003)" ("FIN 46R"). FIN 46R
requires that if an entity has a controlling financial interest in a variable
interest entity, the assets, liabilities and results of activities of the
variable interest entity should be included in the consolidated financial
statements of the entity. FIN 46R is effective for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN
46R must be applied no later than December 31, 2003 for entities meeting the
definition of special-purpose entities, and no later than fiscal periods ending
after March 15, 2004 for all other entities under construction. As we do not
have any variable interest entities, the adoption of FIN 46R is not expected to
have a material impact on our financial position, results of operations or cash
flows.

INFLATION

The impact of inflation on the Company has been minimal.

22

FORWARD-LOOKING STATEMENTS

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

Actual results and trends in the future may differ materially depending
on a variety of factors including, but not limited to, domestic and
international economic activity and inflation, our successful execution of
internal operating plans and new store and new market expansion plans,
performance issues with key suppliers, severe weather, foreign currency
fluctuations, government export and import policies and legal proceedings.
Future results will also be dependent upon our ability to continue to identify
and complete successful expansions and penetrations into existing and new
markets and our ability to integrate such expansions with our existing
operations.

Expansion into more fashion-oriented merchandise categories or into
complementary products and services may present greater risks. We are
continuously assessing opportunities to expand complementary products and
services related to our traditional business, such as corporate apparel sales
and retail dry cleaning establishments, as well as concepts that include more
fashion-oriented merchandise. We may expend both capital and personnel resources
on such business opportunities which may or may not be successful.

Our business is particularly sensitive to economic conditions and
consumer confidence. Consumer confidence is often adversely impacted by many
factors including local, regional or national economic conditions, continued
threats of terrorism, acts of war and other uncertainties. We believe that a
decrease in consumer spending will affect us more than other retailers because
men's discretionary spending for items like tailored apparel tends to slow
faster than other retail purchases.

According to industry sources, sales in the men's tailored clothing
market generally have declined over the past several years. We believe that this
decline is attributable primarily to: (1) men allocating less of their income to
tailored clothing and (2) certain employers relaxing their dress codes. We
believe that this decrease in sales has contributed, and will continue to
contribute, to a consolidation among retailers of men's tailored clothing.
Despite this overall decline, we have been able to increase our share of the
men's tailored clothing market; however, we may not be able to continue to
expand our sales volume or maintain our profitability within our segment of the
retailing industry.

23

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to exposure from fluctuations in U.S. dollar/Euro
exchange rates. As further described in Note 8 of Notes to Consolidated
Financial Statements and Item 7, "Management's Discussion and Analysis of
Financial Information and Results of Operations - Liquidity and Capital
Resources", we utilize foreign currency forward exchange contracts to limit
exposure to changes in currency exchange rates. At January 31, 2004, we had 23
contracts maturing in varying increments to purchase an aggregate notional
amount of $15.4 million in foreign currency, maturing at various dates through
January 2005. At February 1, 2003, we had four contracts maturing in varying
increments to purchase an aggregate notional amount of $1.4 million in foreign
currency, maturing at various dates through March 2003. Unrealized pretax losses
on these forward contracts totaled approximately $0.2 million at February 1,
2003. Unrealized pretax gains on these forward contracts totaled approximately
$1.0 million at January 31, 2004. A hypothetical 10% change in applicable
January 31, 2004 forward rates would increase or decrease this pretax gain by
approximately $1.5 million related to these positions. However, it should be
noted that any change in the value of these contracts, whether real or
hypothetical, would be significantly offset by an inverse change in the value of
the underlying hedged item.

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

24

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
The Men's Wearhouse, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheets of The Men's
Wearhouse, Inc. and its subsidiaries (the "Company") as of January 31, 2004 and
February 1, 2003, and the related consolidated statements of earnings,
shareholders' equity, and cash flows for each of the three years in the period
ended January 31, 2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of January 31, 2004
and February 1, 2003, and the results of its operations and its cash flows for
each of the three years in the period ended January 31, 2004 in conformity with
accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for goodwill and other intangible assets
effective February 3, 2002 to conform to Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets," as amended.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas
April 5, 2004

25

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARES)

FEBRUARY 1, JANUARY 31,
2003 2004
----------- ----------

ASSETS
CURRENT ASSETS:
Cash ........................................................ $ 84,924 $ 132,146
Accounts receivable, net .................................... 20,004 17,919
Inventories ................................................. 360,159 388,956
Other current assets ........................................ 29,495 30,858
----------- ----------

Total current assets ..................................... 494,582 569,879
----------- ----------

PROPERTY AND EQUIPMENT, AT COST:
Land ........................................................ 6,005 6,205
Buildings ................................................... 23,729 29,739
Leasehold improvements ...................................... 162,734 177,466
Furniture, fixtures and equipment ........................... 213,391 241,742
----------- -----------
405,859 455,152
Less accumulated depreciation and amortization .............. (195,679) (240,088)
----------- -----------

Net property and equipment ............................... 210,180 215,064
----------- -----------

GOODWILL, net ................................................. 36,607 43,867

OTHER ASSETS, net ............................................. 27,944 40,388
----------- -----------

TOTAL ............................................... $ 769,313 $ 869,198
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable ............................................ $ 98,716 $ 115,828
Accrued expenses ............................................ 55,323 71,132
Current portion of long-term debt ........................... 2,037 --
Income taxes payable ........................................ 13,234 26,096
----------- -----------
Total current liabilities ................................ 169,310 213,056

LONG-TERM DEBT ................................................ 38,709 131,000

DEFERRED TAXES AND OTHER LIABILITIES .......................... 29,533 31,682
----------- -----------

Total liabilities ........................................ 237,552 375,738
----------- -----------

COMMITMENTS AND CONTINGENCIES (Note 9)

SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 2,000,000 shares authorized,
no shares issued ......................................... -- --
Common stock, $.01 par value, 100,000,000 shares
authorized, 42,585,179 and 43,054,815 shares issued ...... 426 431
Capital in excess of par .................................... 196,146 205,636
Retained earnings ........................................... 397,540 447,566
Accumulated other comprehensive income ...................... 66 10,533
----------- -----------
Total .................................................... 594,178 664,166

Treasury stock, 2,845,364 and 6,979,423 shares at cost ..... (62,417) (170,706)
----------- -----------

Total shareholders' equity ............................... 531,761 493,460
----------- -----------

TOTAL ............................................... $ 769,313 $ 869,198
=========== ===========

The accompanying notes are an integral part of these consolidated financial
statements.

26

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED
FEBRUARY 2, 2002, FEBRUARY 1, 2003 AND JANUARY 31, 2004
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

FISCAL YEAR
------------------------------------
2001 2002 2003
---------- ---------- ----------

Net sales ................................................. $1,273,154 $1,295,049 $1,392,680

Cost of goods sold, including buying and occupancy costs .. 822,043 840,701 878,737
---------- ---------- ----------

Gross margin .............................................. 451,111 454,348 513,943

Selling, general and administrative expenses .............. 377,270 384,956 431,695
---------- ---------- ----------

Operating income .......................................... 73,841 69,392 82,248

Interest expense (net of interest income of
$841, $981 and $1,495, respectively) .................... 2,867 1,261 2,511
---------- ---------- ----------

Earnings before income taxes .............................. 70,974 68,131 79,737

Provision for income taxes ................................ 27,698 25,719 29,711
---------- ---------- ----------

Net earnings .............................................. $ 43,276 $ 42,412 $ 50,026
========== ========== ==========

Net earnings per share:
Basic ................................................... $ 1.06 $ 1.04 $ 1.29
========== ========== ==========

Diluted ................................................. $ 1.04 $ 1.04 $ 1.27
========== ========== ==========

Weighted average shares outstanding:

Basic ................................................... 40,997 40,590 38,789
========== ========== ==========

Diluted ................................................. 41,446 40,877 39,295
========== ========== ==========

The accompanying notes are an integral part of these consolidated
financial statements.

27

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED FEBRUARY 2, 2002,
FEBRUARY 1, 2003 AND JANUARY 31. 2004
(IN THOUSANDS, EXCEPT SHARES)

ACCUMULATED
CAPITAL OTHER
COMMON IN EXCESS RETAINED COMPREHENSIVE TREASURY
STOCK OF PAR EARNINGS (LOSS) INCOME STOCK TOTAL
------ --------- --------- ------------- --------- ----------

BALANCE -- February 3, 2001.............. $ 422 $ 189,656 $ 311,852 $ (316) $ (6,627) $ 494,987
Comprehensive income:
Net earnings......................... -- -- 43,276 -- -- 43,276
Translation adjustment............... -- -- -- (2,157) -- (2,157)
Cumulative effect of accounting
change on derivative instruments... -- -- -- (331) -- (331)
Change in derivative fair value...... -- -- -- (394) -- (394)
----------
Total comprehensive income...... 40,394
Common stock issued to stock
discount plan -- 56,617 shares....... 1 940 -- -- -- 941
Common stock issued upon exercise of
stock options -- 79,479 shares...... 1 1,211 -- -- -- 1,212
Tax benefit recognized upon exercise
of stock options..................... -- 258 -- -- -- 258
Treasury stock purchased -- 1,185,000
shares............................... -- -- -- -- (30,409) (30,409)
Treasury stock issued to profit
sharing plan -- 106,382 shares...... -- (177) -- -- 2,677 2,500
------ --------- --------- --------- --------- ----------
BALANCE -- February 2, 2002.............. 424 191,888 355,128 (3,198) (34,359) 509,883

Comprehensive income:
Net earnings......................... -- -- 42,412 -- -- 42,412
Translation adjustment............... -- -- -- 2,442 -- 2,442
Change in derivative fair value...... -- -- -- 822 822
----------
Total comprehensive income...... 45,676
Common stock issued to stock
discount plan -- 51,359 shares....... 1 761 -- -- -- 762
Common stock issued upon exercise of
stock options -- 165,105 shares...... 1 2,272 -- -- -- 2,273
Tax benefit recognized upon exercise
of stock options..................... -- 624 -- -- -- 624
Proceeds from sale of put option
contracts............................ -- 601 -- -- -- 601
Treasury stock purchased -- 1,480,000
shares............................... -- -- -- -- (28,058) (28,058)
------ --------- --------- --------- --------- ----------

BALANCE -- February 1, 2003.............. $ 426 $ 196,146 $ 397,540 $ 66 $ (62,417) $ 531,761

Comprehensive income:
Net earnings........................ -- -- 50,026 -- -- 50,026
Translation adjustment.............. -- -- -- 9,908 -- 9,908
Change in derivative fair value..... -- -- -- 559 -- 559
----------
Total comprehensive income 60,493
Common stock issued to stock
discount plan -- 48,195 shares...... 1 742 -- -- -- 743
Common stock issued upon exercise of
stock options -- 421,441 shares..... 4 7,573 -- -- -- 7,577
Tax benefit recognized upon exercise
of stock options.................... -- 1,572 -- -- -- 1,572
Treasury stock issued to profit
sharing plan - 41,841 shares........ -- (397) -- -- 897 500
Treasury stock purchased -- 4,175,900
shares.............................. -- -- -- -- (109,186) (109,186)
------ --------- --------- --------- --------- ----------
BALANCE -- January 31, 2004............. $ 431 $ 205,636 $ 447,566 $ 10,533 $(170,706) $ 493,460
====== ========= ========= ========= ========= ==========

The accompanying notes are an integral part of these consolidated financial
statements.

28

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
FEBRUARY 2, 2002, FEBRUARY 1, 2003 AND JANUARY 31, 2004
(IN THOUSANDS)

FISCAL YEAR
-----------------------------------
2001 2002 2003
--------- --------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings ...................................................... $ 43,276 $ 42,412 $ 50,026
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization .................................. 41,949 44,284 48,130
Gain on sale of assets ......................................... -- -- (4,381)
Deferred tax provision ......................................... 3,354 7,485 505
(Increase) decrease in inventories ................................ (22,773) 17,338 (21,624)
Increase in other assets .......................................... (8,995) (13,594) (3,246)
Increase in accounts payable and accrued expenses ................. 719 19,503 35,491
Increase (decrease) in income taxes payable ....................... (6,949) (4,933) 14,086
Increase (decrease) in other liabilities .......................... 1,721 531 (220)
--------- --------- ---------
Net cash provided by operating activities ................. 52,302 113,026 118,767
--------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures .............................................. (64,777) (45,422) (48,700)
Net proceeds from sale of assets .................................. -- 6,812 --
Net assets acquired ............................................... -- -- (4,500)
Investment in trademarks, tradenames and other assets ............. (1,590) (2,619) (1,644)
--------- --------- ---------
Net cash used in investing activities ..................... (66,367) (41,229) (54,844)
--------- --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ............................ 2,153 3,035 8,320
Proceeds from issuance of debt .................................... -- -- 130,000
Bank borrowings ................................................... -- 39,624 --
Principal payments on bank debt ................................... (2,407) (40,743) (44,931)
Deferred financing costs .......................................... -- (1,075) (3,916)
Proceeds from sale of put option contracts ........................ -- 601 --
Purchase of treasury stock ........................................ (30,409) (28,058) (109,186)
--------- --------- ---------

Net cash used in financing activities ..................... (30,663) (26,616) (19,713)
--------- --------- ---------

Effect of exchange rate changes on cash ............................. (1,054) 1,099 3,012
--------- --------- ---------

INCREASE (DECREASE) IN CASH ......................................... (45,782) 46,280 47,222
Cash beginning of period .......................................... 84,426 38,644 84,924
--------- --------- ---------
Cash end of period ................................................ $ 38,644 $ 84,924 $ 132,146
========= ========= =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ........................................................ $ 3,468 $ 1,945 $ 2,091
========= ========= =========

Income taxes .................................................... $ 32,539 $ 25,582 $ 15,863
========= ========= =========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:

Additional capital in excess of par resulting from tax benefit
recognized upon exercise of stock options ...................... $ 258 $ 624 $ 1,572
========= ========= =========

Treasury stock contributed to employee stock plan ................. $ 2,500 $ -- $ 500
========= ========= =========

Note payable issued as partial consideration for assets acquired .. $ -- $ -- $ 1,000
========= ========= =========

The accompanying notes are an integral part of these
consolidated financial statements.

29

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED FEBRUARY 2, 2002
FEBRUARY 1, 2003 AND JANUARY 31, 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business -- The Men's Wearhouse, Inc. and its
subsidiaries (the "Company") is a specialty retailer of menswear. We operate
throughout the United States primarily under the brand names of Men's Wearhouse
and K&G and under the brand name of Moores in Canada. We follow the standard
fiscal year of the retail industry, which is a 52-week or 53-week period ending
on the Saturday closest to January 31. Fiscal year 2001 ended on February 2,
2002, fiscal year 2002 ended on February 1, 2003 and fiscal year 2003 ended on
January 31, 2004. Fiscal years 2001, 2002 and 2003 included 52 weeks.

Principles of Consolidation -- The consolidated financial statements
include the accounts of The Men's Wearhouse, Inc. and its wholly owned or
controlled subsidiaries. Intercompany accounts and transactions have been
eliminated in the consolidated financial statements.

Use of Estimates -- The preparation of financial statements in
conformity with accounting principals generally accepted in the United States of
America, requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. The most significant estimates and assumptions are
those relating to inventories and long-lived assets, including goodwill, and our
estimated liabilities for self-insured portions of our workers' compensation and
employee health benefit costs.

Cash -- Cash includes all cash in banks, cash on hand and all highly
liquid investments with an original maturity of three months or less. As
substantially all of our cash is held by five financial institutions, we are
exposed to risk of loss in the event of failure of any of these parties.
However, due to the creditworthiness of these five financial institutions, we
anticipate full performance and access to our deposits and liquid investments.

Accounts Receivable -- Accounts receivable consists of our third-party
credit card receivables and other receivables, net of an allowance for
uncollectible accounts of $0.4 million at fiscal year end 2002 and 2003.
Collectibility is reviewed regularly and the allowance is adjusted as necessary.

Inventories -- Inventories are valued at the lower of cost or market,
with cost determined on the average cost method and the retail cost method.
Inventory cost includes procurement and distribution costs (warehousing,
freight, hangers and merchandising costs) associated with ending inventory.

Property and Equipment -- Property and equipment are stated at cost.
Normal repairs and maintenance costs are charged to earnings as incurred and
additions and major improvements are capitalized. The cost of assets retired or
otherwise disposed of and the related allowances for depreciation are eliminated
from the accounts in the year of disposal and the resulting gain or loss is
credited or charged to earnings.

Buildings are depreciated using the straight-line method over their
estimated useful lives of 20 to 25 years. Depreciation of leasehold improvements
is computed on the straight-line method over the term of the lease or useful
life of the assets, whichever is shorter. Furniture, fixtures and equipment are
depreciated using primarily the straight-line method over their estimated useful
lives of three to ten years.

Goodwill and Other Assets -- We adopted the provisions of Statement of
Financial Accounting Standard No. 142 "Goodwill and Other Intangible Assets"
("SFAS No. 142") on February 3, 2002. Accordingly, intangible assets are
initially recorded at their fair values. Identifiable intangible assets with
finite useful lives are amortized to expense over the estimated useful life of
the asset. Trademarks, tradenames and other intangibles are amortized over
estimated useful lives of 3 to 17 years using the straight-line method.
Identifiable intangible assets with an indefinite useful life, including
goodwill, are evaluated, at least annually, for impairment by comparison of
their carrying amounts with the fair value of the individual assets. The
adoption of SFAS No. 142 did not result in any impairment charge. The
disclosures required by SFAS No. 142 are included in Note 7.

30

Impairment of Long-Lived Assets -- We adopted Statement of Financial
Accounting Standard No. 144 "Impairment or Disposal of Long-lived Assets" ("SFAS
No. 144") on February 3, 2002. We evaluate the carrying value of long-lived
assets, such as property and equipment and amortizable intangibles, for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If it is determined, based
on estimated undiscounted future cash flows, that an impairment has occurred, a
loss is recognized currently for the impairment. The adoption of this statement
did not have a material impact on our financial position, results of operations
or cash flows.

Fair Value of Financial Instruments -- As of February 1, 2003 and
January 31, 2004, management estimates that the fair value of cash, receivables,
accounts payable and accrued expenses are carried at amounts that reasonably
approximate their fair value. See Note 3 for the fair values of our long-term
debt.

Revenue Recognition -- Revenue is recognized at the time of sale and
delivery of merchandise, net of actual sales returns and a provision for
estimated sales returns. Revenues from alteration services are recognized upon
completion of the alteration services.

Advertising -- Advertising costs are expensed as incurred or, in the
case of media production costs, when the commercial first airs. Advertising
expenses were $61.2 million, $60.1 million and $62.9 million in fiscal 2001,
2002 and 2003, respectively.

Shipping and Handling Costs -- All shipping and handling costs for
product sold are recognized as cost of goods sold.

New Store Costs -- Promotion and other costs associated with the
opening of new stores are expensed as incurred.

Store Closures and Relocations -- On November 3, 2002, we adopted
Statement of Financial Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS No. 146"). This statement
requires, among other things, that a liability for costs associated with an exit
or disposal activity be recognized when the liability is incurred rather than
when a company commits to such an activity and also establishes fair value as
the objective for initial measurement of the liability. As of the fourth quarter
of 2002, when we close or relocate a store, the present value of estimated
unrecoverable cost, which is substantially made up of the remaining net lease
obligation, is charged to expense. Prior to the fourth quarter of 2002, these
costs were expensed upon management's commitment to closing or relocating a
store, which was generally before the actual liability was incurred. The
adoption of this statement did not have a material impact on our financial
position, results of operations or cash flows.

Stock Based Compensation -- As permitted by Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123"), we account for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB No. 25"). We have adopted the disclosure-only
provisions of SFAS No. 123 and continue to apply APB No. 25 and related
interpretations in accounting for the stock option plans and the employee stock
purchase plan.

In December 2002, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure" ("SFAS No. 148"). This
statement amends SFAS No. 123 to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this statement amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.
This statement is effective for fiscal years ending after December 15, 2002. The
adoption of the disclosure requirements of this statement, on February 1, 2003,
did not have a material effect on the Company's financial position, results of
operations or cash flows. The disclosures required by SFAS No. 148 are included
below.

31

Had we elected to apply the accounting standards of SFAS No. 123, as
amended by SFAS No. 148, our net earnings and net earnings per share would have
been approximately the pro forma amounts indicated below (in thousands, except
per share data):

FISCAL YEAR
--------------------------------------
2001 2002 2003
---------- ---------- ----------

Net earnings, as reported ................................ $ 43,276 $ 42,412 $ 50,026
Deduct: Additional compensation expense, net of tax ..... (3,129) (2,977) (2,460)
---------- ---------- ----------
Pro forma net earnings ................................... $ 40,147 $ 39,435 $ 47,566
========== ========== ==========

Net earnings per share:
As reported:
Basic .................................................. $ 1.06 $ 1.04 $ 1.29
Diluted ................................................ $ 1.04 $ 1.04 $ 1.27

Pro forma:
Basic .................................................. $ 0.98 $ 0.97 $ 1.23
Diluted ................................................ $ 0.97 $ 0.96 $ 1.21

For purposes of computing pro forma net earnings, the fair value of
each option grant is estimated on the date of grant using the Black-Scholes
option-pricing model, which resulted in a weighted-average fair value of $11.47,
$11.70 and $9.99 for grants made during fiscal 2001, 2002 and 2003,
respectively. The following weighted average assumptions were used for option
grants in fiscal 2001, 2002 and 2003, respectively: expected volatility of
54.01%, 54.14% and 54.75%, risk-free interest rates (U.S. Treasury five year
notes) of 4.57%, 4.29% and 3.14%, and an expected life of six years.

The effects of applying SFAS No. 123 in this pro forma disclosure may
not be indicative of pro forma future amounts. See Note 6 for additional
disclosures regarding stock-based compensation.

Derivative Financial Instruments -- We enter into foreign currency
forward exchange contracts to hedge against foreign exchange risks associated
with certain firmly committed, and certain other probable, but not firmly
committed, inventory purchase transactions that are denominated in a foreign
currency (primarily the Euro). Gains and losses associated with these contracts
are accounted for as part of the underlying inventory purchase transactions.
These contacts have been accounted for in accordance with Statement of Financial
Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No. 133"), as amended, which we adopted on February 4, 2001.
In accordance with the transition provisions of SFAS No. 133, we recorded a
cumulative loss adjustment of $0.5 million ($0.3 million, net of tax) in
accumulated other comprehensive loss related primarily to the unrealized losses
on foreign currency exchange contracts, which were designated as cash-flow
hedging instruments. The disclosures required by SFAS No. 133 are included in
Note 8.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities ("SFAS No. 149"). SFAS No.
149 amends and clarifies accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities under SFAS No. 133. SFAS No. 149 is effective for contracts entered
into or modified after June 30, 2003 and for hedging relationships designated
after June 30, 2003. Our adoption of this statement as of June 30, 2003 did not
have a material impact on our financial position, results of operations or cash
flows.

In connection with our share repurchase programs, as described in Note
6, we from time to time issued put option contracts and received premiums for
doing so, with the premiums being added to our capital in excess of par. Under
these contracts, the contract counterparties had the option to require us to
purchase a specific number of shares of our common stock at specific strike
prices per share on specific dates. See Note 6 for additional disclosures
regarding our put option contracts.

Foreign Currency Translation -- Assets and liabilities of foreign
subsidiaries are translated into U.S. dollars at the exchange rates in effect at
each balance sheet date. Shareholders' equity is translated at applicable
historical exchange rates. Income, expense and cash flow items are translated at
average exchange rates during the year. Resulting translation adjustments are
reported as a separate component of shareholders' equity.

32

Comprehensive Income -- Comprehensive income includes all changes in
equity during the period presented that result from transactions and other
economic events other than transactions with shareholders.

Segment Information -- We consider our business as one operating
segment based on the similar economic characteristics of our three brands.
Revenues of Canadian retail operations were $144.6 million, $141.9 million and
$154.7 million for fiscal 2001, 2002 and 2003, respectively. Long-lived assets
of our Canadian operations were $35.2 million and $45.5 million as of the end of
fiscal 2002 and 2003, respectively.

Accounting for Guarantees -- In November 2002, the FASB issued
Financial Interpretation No. 45 ("FIN No. 45"), "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." FIN No. 45 requires that upon issuance of a guarantee,
the guarantor must disclose and recognize a liability for the fair value of the
obligation it assumes under that guarantee. The initial recognition and
measurement requirement of FIN No. 45 is effective for guarantees issued or
modified after December 31, 2002. As of January 31, 2004, we did not have any
material guarantees that were issued or modified after December 31, 2002. The
disclosure requirements of FIN No. 45 are effective for interim and annual
periods ending after December 15, 2002 and are applicable to guarantees issued
before December 31, 2002. We did not have any significant guarantees issued
before December 31, 2002.

Vendor Allowances -- In November 2002, the Emerging Issues Task Force
("EITF") issued Issue 02-16, "Accounting by a Customer (Including a Reseller)
for Cash Consideration Received from a Vendor." This EITF addresses the
accounting treatment for cash vendor allowances received. The adoption of EITF
Issue 02-16 in 2003 did not have a material impact on the Company's financial
position, results of operations or cash flows.

Reporting Gains and Losses from the Early Extinguishment of Debt -- We
adopted Statement No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS No. 145")
on February 2, 2003. SFAS No. 145 rescinds FASB Statement No. 4, "Reporting
Gains and Losses from Extinguishment of Debt," FASB Statement No. 44,
"Accounting for Intangible Assets of Motor Carriers" and FASB Statement No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". In
addition, SFAS No. 145 amends FASB Statement No. 13, "Accounting for Leases," to
eliminate an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. This
statement also makes non-substantive technical corrections to existing
pronouncements. The adoption of this statement did not have a material impact on
our financial position, results of operations or cash flows.

Accounting for Asset Retirement Obligations -- We adopted Statement of
Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143"), on February 2, 2003. SFAS No. 143 addresses the
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated retirement costs. The adoption of
this statement did not have a material impact on our financial position, results
of operations or cash flows.

Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity -- We adopted Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity" ("SFAS No. 150") as of August 3,
2003. SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments, many of which were previously classified
as equity. This statement is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. The adoption of this
statement did not have a material impact on our financial position, results of
operations or cash flows.

Recently Issued Accounting Pronouncements -- In December 2003, the FASB
issued a revised interpretation of FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51 (revised December
2003)" ("FIN 46R"). FIN 46R requires that if an entity has a controlling
financial interest in a variable interest entity, the assets, liabilities and
results of activities of the variable interest entity should be included in the
consolidated financial statements of the entity. FIN 46R is effective for all
new variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46R must be applied no later than December 31, 2003 for
entities meeting the definition of special - purpose entities, and no later than
fiscal periods ending after March 15, 2004 for all other entities under
construction. As we do not have any variable interest entities, the adoption of
FIN 46R is not expected to have a material impact on our financial position,
results of operations or cash flows.

33

2. EARNINGS PER SHARE

Basic EPS is computed using the weighted average number of common
shares outstanding during the period and net earnings. Diluted EPS gives effect
to the potential dilution which would have occurred if additional shares were
issued for stock options exercised under the treasury stock method, as well as
the potential dilution that could occur if our contingent convertible debt or
other contracts to issue common stock were converted or exercised. No dilution
from the contingent convertible debt or other contracts has occurred.

The following table reconciles the earnings and shares used in the
basic and diluted EPS computations (in thousands, except per share amounts):

FISCAL YEAR
---------------------------
2001 2002 2003
------- ------- -------

Net earnings ........................ $43,276 $42,412 $50,026
======= ======= =======

Weighted average number of
common shares outstanding ........ 40,997 40,590 38,789
======= ======= =======

Basic earnings per share ............ $ 1.06 $ 1.04 $ 1.29
======= ======= =======
Weighted average number of
common shares outstanding ........ 40,997 40,590 38,789
Assumed exercise of stock options ... 449 287 506
------- ------- -------
As adjusted ......................... 41,446 40,877 39,295
======= ======= =======

Diluted earnings per share .......... $ 1.04 $ 1.04 $ 1.27
======= ======= =======

3. LONG-TERM DEBT

In January 2003, we replaced our existing $125.0 million revolving
credit facility which was scheduled to mature in February 2004 with a new
revolving credit agreement with a group of banks (the "Credit Agreement") that
provides for borrowing of up to $100.0 million through February 4, 2006 (with
extensions for up to two years under certain conditions). The Credit Agreement
is secured by substantially all of the stock of the subsidiaries of The Men's
Wearhouse, Inc. Advances under the Credit Agreement bear interest at a rate per
annum equal to, at our option, the agent's prime rate or the reserve adjusted
LIBOR rate plus a varying interest rate margin up to 2.25%. The Credit Agreement
also provides for fees applicable to unused commitments ranging from 0.275% to
0.500%. The terms and conditions of the new Credit Agreement are substantially
the same as those of the replaced facility. In addition, in January 2003, we
entered into a new Canadian term credit agreement under which we borrowed Can
$62.0 million (US $40.7 million) which was used to repay approximately Can $60.9
million (US $40.0 million) in outstanding indebtedness of Moores under the
previous term credit agreement. On October 31, 2003, we repaid the outstanding
indebtedness of Can $60.5 million (US $45.9 million). As of January 31, 2004,
there were no borrowings outstanding under the Credit Agreement.

The Credit Agreement contains certain restrictive and financial
covenants, including the requirement to maintain a minimum level of net worth
and certain financial ratios. The Credit Agreement also prohibits payment of
cash dividends on our common stock. We are in compliance with the covenants in
the Credit Agreement as of January 31, 2004.

On October 21, 2003, we issued $130.0 million of 3.125% Convertible
Senior Notes due 2023 ("Notes") in a private placement. A portion of the net
proceeds from the Notes was used to repay the outstanding indebtedness under our
Canadian term credit agreement and to repurchase shares of our common stock
under the program authorized by the Board in September 2003; the balance is
reserved for general corporate purposes, which may include additional purchases
of our common stock under our share repurchase program. Interest on the Notes is
payable semi-annually on April 15 and October 15 of each year, beginning on
April 15, 2004. The Notes will mature on October 15, 2023. However, holders may
require us to purchase all or part of the Notes, for cash, at a purchase price
of 100% of the principal amount per Note plus accrued and unpaid interest on
October 15, 2008, October 15, 2013 and October 15, 2018 or upon a designated
event. Beginning on October 15, 2008, we will pay additional contingent interest
on the Notes if the average trading price of the Notes is above a specified
level during a specified period. In addition, we may redeem all or a portion of
the Notes on or after October 20, 2008, at 100% of the principal amount of the
Notes plus any accrued and unpaid interest, contingent interest and additional

34

amounts, if any. We also have the right to redeem the Notes between October 20,
2006 and October 19, 2008 if the price of our common stock reaches certain
levels.

During certain periods, the Notes are convertible by holders into
shares of our common stock initially at a conversion rate of 23.3187 shares of
common stock per $1,000 principal amount of Notes, which is equivalent to an
initial conversion price of $42.88 per share of common stock (subject to
adjustment in certain events), under the following circumstances: (1) if the
closing sale price of our common stock issuable upon conversion exceeds 120% of
the conversion price under specified conditions; (2) if we call the Notes for
redemption; or (3) upon the occurrence of specified corporate transactions. Upon
conversion of the Notes, in lieu of delivering common stock we may, at our
election, deliver cash or a combination of cash and common stock. The Notes are
general senior unsecured obligations, ranking on a parity in right of payment
with all our existing and future unsecured senior indebtedness and our other
general unsecured obligations, and senior in right of payment with all our
future subordinated indebtedness. The Notes are effectively subordinated to all
of our senior secured indebtedness, and all indebtedness and liabilities of our
subsidiaries.

In December 2003, we acquired the assets and operating leases for 13
retail dry cleaning and laundry facilities and issued a $1.0 million note
payable as partial consideration. The unsecured note payable is due in full in
2008 and interest compounds annually at 4.0%.

We utilize letters of credit primarily for inventory purchases. At
January 31, 2004, letters of credit totaling approximately $17.3 million were
issued and outstanding.

The fair value of the Notes, using quoted market prices of the same or
similar issues, was approximately $127.1 million at January 31, 2004. The
carrying amounts of all other long-term debt approximate fair value at February
1, 2003 and January 31, 2004.

4. INCOME TAXES

The provision for income taxes consists of the following (in
thousands):

FISCAL YEAR
------------------------------
2001 2002 2003
-------- -------- --------

Current tax expense:
Federal ........................... $ 14,607 $ 10,248 $ 17,889
State ............................. 1,715 1,010 1,081
Foreign ........................... 8,022 6,976 10,236
Deferred tax expense (benefit):
Federal and state ................. 3,088 5,695 3,107
Foreign ........................... 266 1,790 (2,602)
-------- -------- --------
Total ..................... $ 27,698 $ 25,719 $ 29,711
======== ======== ========

No provision for U.S. income taxes or Canadian withholding taxes has
been made on the cumulative undistributed earnings of Moores (approximately
$96.2 million at January 31, 2004) since such earnings are considered to be
permanently invested in Canada. The determination of any unrecognized deferred
tax liability for the cumulative undistributed earnings of Moores is not
considered practicable since such liability, if any, will depend on a number of
factors that cannot be known until such time as a decision to repatriate the
earnings might be made by management.

A reconciliation of the statutory federal income tax rate to our effective tax
rate is as follows:

FISCAL YEAR
----------------
2001 2002 2003
---- ---- ----

Federal statutory rate ...................... 35% 35% 35%
State income taxes, net of federal benefit .. 2 1 2
Other ....................................... 2 2 -
--- --- ---
39% 38% 37%
=== === ===

At February 1, 2003, we had net deferred tax liabilities of $8.1
million with $12.7 million classified as other current assets and $20.8 million
classified as other liabilities (noncurrent). At January 31, 2004, we had net
deferred tax liabilities of $8.5 million with $14.4 million classified as other
current assets and $22.9 million classified as other liabilities (noncurrent).
Our state net operating loss and foreign tax credit carryforwards expire in
varying amounts annually from 2005 through 2023 and from 2004 through 2008,
respectively. A valuation

35

allowance is recorded to reduce the carrying amount of deferred tax assets
unless it is more likely than not that such assets will be realized. As of
February 1, 2003 and January 31, 2004, no valuation allowance was considered
necessary.

Total deferred tax assets and liabilities and the related temporary
differences as of February 1, 2003 and January 31, 2004 were as follows (in
thousands):

FEBRUARY 1, JANUARY 31,
2003 2004
-------- --------

Deferred tax assets:
Accrued rent and other expenses .............. $ 6,854 $ 8,857
Accrued compensation ......................... 1,932 2,016
Accrued inventory markdowns .................. 985 595
Deferred intercompany profits ................ 2,742 3,399
Unused state operating loss carryforwards .... 3,130 1,609
Unused foreign tax credits ................... 662 873
Other ........................................ 518 620
-------- --------
16,823 17,969
-------- --------

Deferred tax liabilities:
Capitalized inventory costs .................. (4,126) (3,483)
Property and equipment ....................... (19,533) (20,520)
Intangibles .................................. (1,225) (1,781)
Deferred interest ............................ -- (674)
-------- --------
(24,884) (26,458)
-------- --------

Net deferred tax liabilities ................... $ (8,061) $ (8,489)
======== ========

5. OTHER ASSETS AND ACCRUED EXPENSES

Other assets consist of the following (in thousands):

FEBRUARY 1, JANUARY 31,
2003 2004
-------- --------

Trademarks, tradenames and other intangibles .............. $ 7,958 $ 9,475
Accumulated amortization .................................. (1,771) (2,450)
-------- --------
6,187 7,025
Tuxedo rental assets, deposits and other .................. 21,757 33,363
-------- --------
Total ........................................... $ 27,944 $ 40,388
======== ========

Accrued expenses consist of the following (in thousands):

Sales, payroll and property taxes payable ................. $ 8,874 $ 10,725
Accrued salary, bonus and vacation ........................ 17,779 24,041
Accrued workers compensation and medical costs ............ 5,419 8,919
Unredeemed gif certificates ............................... 10,624 13,096
Deferred gain on sale of assets ........................... 4,423 --
Other ..................................................... 8,204 14,351
-------- --------
Total ........................................... $ 55,323 $ 71,132
======== ========

36

6. CAPITAL STOCK, STOCK OPTIONS AND BENEFIT PLANS

In January 2000, the Board of Directors authorized the repurchase of up
to one million shares of our common stock in the open market or in private
transactions. On January 31, 2001, the Board authorized an expansion of the
program for up to an additional two million shares. On November 19, 2002, the
Board of Directors authorized a new stock repurchase program for up to $25.0
million in shares of our common stock. Under the first three authorized
programs, we repurchased 1,185,000, 1,480,000 and 1,057,100 shares of our common
stock during fiscal 2001, 2002 and 2003, respectively, at a cost of $30.4
million, $28.1 million and $24.1 million, respectively. The average price per
share of our common stock repurchased under these programs was $25.66, $18.96
and $22.80 during fiscal 2001, 2002 and 2003, respectively. In September 2003,
the Board of Directors authorized a program for the repurchase of up to $100.0
million of our common stock in the open market or in private transactions. This
authorization superceded the approximately $1 million we had remaining under the
Board's November 2002 authorization. As of January 31, 2004, we had repurchased
under this program 1,405,400 shares at a cost of $42.4 million in private
transactions and 1,713,400 shares at a cost of $42.6 million in open market
transactions. Under all programs during fiscal 2003, we repurchased 4,175,900
shares of our common stock at a cost of $109.2 million, with an average
repurchase price of $26.15 per share.

In connection with our share repurchase programs, we have from time to
time issued put option contracts and received premiums for doing so, with the
premiums being added to our capital in excess of par and effectively reducing
the cost of our share repurchases. Under these contracts, the contract
counterparties had the option to require us to purchase a specific number of
shares of our common stock at a specific strike price per share on a specific
date. During fiscal 2002, we issued a put contract for 500,000 shares and
received a premium of $0.6 million for issuing this contract. The contract
counterparty had the option to exercise this contract at a strike price of
$22.76 per share on December 17, 2002, but contract completion was required
earlier if the market price of our common stock fell below a trigger price of
$12.64 per share. During the third quarter of 2002, the market price of our
common stock fell below the trigger price and we settled the contract by
repurchasing the 500,000 shares at $22.76 per share or $11.4 million; we
recorded the shares purchased as treasury stock. We were not obligated to issue
any shares under the put contract nor were we obligated to settle in cash.

We have adopted the 1992 Stock Option Plan ("1992 Plan") which, as
amended, provides for the grant of options to purchase up to 1,071,507 shares of
our common stock to full-time key employees (excluding certain officers), the
1996 Stock Option Plan ("1996 Plan") which, as amended, provides for the grant
of options to purchase up to 1,850,000 shares of our common stock to full-time
key employees (excluding certain officers), and the 1998 Key Employee Stock
Option Plan ("1998 Plan") which, as amended, provides for the grant of options
to purchase up to 2,100,000 shares of our common stock to full-time key
employees (excluding certain officers). The 1992 Plan expired in February 2002
and each of the other plans will expire at the end of ten years; no option may
be granted pursuant to the plans after the expiration date. In fiscal 1992, we
also adopted a Non-Employee Director Stock Option Plan ("Director Plan") which,
as amended, provides for the grant of options to purchase up to 167,500 shares
of our common stock to non-employee directors of the Company. In fiscal 2001,
the Director Plan's termination date was extended to February 23, 2012. Options
granted under these plans must be exercised within ten years of the date of
grant.

Generally, options granted under the 1992 Plan, 1996 Plan and 1998 Plan
vest at the rate of 1/3 of the shares covered by the grant on each of the first
three anniversaries of the date of grant and may not be issued at a price less
than 50% of the fair market value of our stock on the date of grant. However, a
significant portion of options granted under these Plans vest annually in
varying increments over a period from one to ten years. Options granted under
the Director Plan vest one year after the date of grant and are issued at a
price equal to the fair market value of our stock on the date of grant.

On January 30, 2004, 4,000 restricted shares were granted to the
outside directors at a grant price of $23.29 per share. The grant of these
restricted shares is contingent upon shareholder approval of the amendment and
restatement of the Director Plan.

The following table is a summary of our stock option activity:

37

WEIGHTED
SHARES UNDER AVERAGE OPTIONS
OPTION EXERCISE PRICE EXERCISABLE
--------- -------------- -----------

Options outstanding, February 3, 2001...................... 2,434,361 $ 20.76 1,262,993
=========
Granted.................................................. 498,490 $ 20.45
Exercised................................................ (79,479) $ 15.24
Forfeited................................................ (60,165) $ 23.54
---------
Options outstanding, February 2, 2002...................... 2,793,207 $ 20.80 1,594,171
=========
Granted.................................................. 500,800 $ 20.42
Exercised................................................ (165,105) $ 13.77
Forfeited................................................ (125,115) $ 21.66
---------
Options outstanding, February 1, 2003...................... 3,003,787 $ 21.09 1,797,834
=========
Granted.................................................. 608,125 $ 17.23
Exercised................................................ (421,441) $ 17.98
Forfeited................................................ (75,533) $ 20.73
---------
Options outstanding, January 31, 2004...................... 3,114,938 $ 20.76 1,444,494
========= =========

Grants of stock options outstanding as of January 31, 2004 are
summarized as follows:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------------- ----------------------------
WEIGHTED-
AVERAGE WEIGHTED- WEIGHTED-
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
--------------- ----------- ----------- --------- ----------- -------

$ 9.89 to 18.00.............. 945,860 5.8 Years $ 14.56 471,985 $15.25
18.00 to 21.50.............. 966,522 6.6 Years 21.19 318,308 21.31
21.50 to 24.00.............. 830,040 7.1 Years 23.19 349,262 23.55
24.00 to 50.00.............. 372,516 5.3 Years 29.96 304,939 30.96
--------- ---------
$ 9.89 to 50.00.............. 3,114,938 $ 20.76 1,444,494 $21.91
========= =========

As of January 31, 2004, 741,113 options were available for grant under
existing plans and 3,860,051 shares of common stock were reserved for future
issuance.

The difference between the option price and the fair market value of
our common stock on the dates that options for 79,479, 165,105 and 421,441
shares of common stock were exercised during fiscal 2001, 2002 and 2003,
respectively, resulted in a tax benefit to us of $0.3 million, $0.6 million and
$1.6 million, respectively, which has been recognized as capital in excess of
par.

We have a profit sharing plan, in the form of an employee stock plan,
which covers all eligible employees, and an employee tax-deferred savings plan.
Contributions to the profit sharing plan are made at the discretion of the Board
of Directors. During fiscal 2001, 2002 and 2003, contributions charged to
operations were $0.4 million, $0.8 million and $1.7 million, respectively, for
the plans.

38

In 1998, we adopted an Employee Stock Discount Plan ("ESDP") which
allows employees to authorize after-tax payroll deductions to be used for the
purchase of up to 1,425,000 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. Effective for
offering periods beginning July 1, 2002, the plan was amended so that a
participant may not purchase more than 125 shares during any calendar quarter.
During fiscal 2001, 2002 and 2003, employees purchased 56,617, 51,359 and 48,195
shares, respectively, under the ESDP, the weighted-average fair value of which
was $16.63, $14.82 and $15.41 per share, respectively. As of January 31, 2004,
1,155,047 shares were reserved for future issuance under the ESDP.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

We adopted SFAS No. 142, "Goodwill and Other Intangible Assets," on
February 3, 2002. In accordance with SFAS No. 142, we discontinued the
amortization of goodwill effective February 3, 2002. Additionally, SFAS No. 142
subjects goodwill to fair-value based impairment tests performed, at a minimum,
on an annual basis, or more frequently if circumstances dictate. We completed
the annual impairment test of goodwill during the fourth quarter of 2003. No
impairment charges were recorded.

Had we applied SFAS No. 142 during fiscal 2001, our net earnings and
net earnings per share would have approximated the pro forma amounts indicated
below (in thousands, except per share amounts):

Net earnings, as reported.......................... $ 43,276

Add back:
Goodwill amortization, net of tax............. 1,708
---------
Pro forma net earnings............................. $ 44,984
=========

Earnings per share:
Basic:
Net earnings, as reported................. $ 1.06
Goodwill amortization, net of tax......... 0.04
---------
Pro forma net earnings.................... $ 1.10
=========
Diluted:
Net earnings, as reported................. $ 1.04
Goodwill amortization, net of tax......... 0.04
---------
Pro forma net earnings.................... $ 1.08
=========

Changes in the net carrying amount of goodwill for the years ended
February 1, 2003 and January 31, 2004 are as follows (in thousands):

Balance, February 2, 2002.................................. $ 35,561
Goodwill of acquired business.......................... 233
Translation adjustment................................. 813
----------
Balance, February 1, 2003.................................. 36,607
Goodwill of acquired business.......................... 4,550
Translation adjustment................................. 2,710
----------
Balance, January 31, 2004.................................. $ 43,867
==========

39

The gross carrying amounts and accumulated amortization of our other
intangibles are as follows (in thousands):

FEBRUARY 1, JANUARY 31,
2003 2004
----------- -----------

Trademarks, tradenames and other intangibles................ $ 7,958 $ 9,475

Accumulated amortization.................................... (1,771) (2,450)
----------- -----------
Net total.............................................. $ 6,187 $ 7,025
=========== ===========

The pretax amortization expense associated with intangible assets
totaled approximately $346,000, $428,000 and $737,000 for fiscal 2001, 2002 and
2003, respectively. Pretax amortization expense associated with intangible
assets at January 31, 2004 is estimated to be approximately $836,000 for each of
the fiscal years 2004 and 2005, $785,000 for fiscal year 2006 and $623,000 for
each of the fiscal years 2007 and 2008.

8. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING

In connection with our direct sourcing program, we may enter into
purchase commitments that are denominated in a foreign currency (primarily the
Euro). Our practices include entering into foreign currency forward exchange
contracts to minimize foreign currency exposure related to forecasted purchases
of certain inventories. Under SFAS No. 133, such contracts have been designated
as and accounted for as cash flow hedges. The settlement terms of the forward
contracts, including amount, currency and maturity, correspond with payment
terms for the merchandise inventories. Any ineffective portion of a hedge is
reported in earnings immediately. At January 31, 2004, we had 23 contracts
maturing in varying increments to purchase an aggregate notional amount of $15.4
million in foreign currency, maturing at various dates through January 2005.
During fiscal 2002 and 2003, we recognized an insignificant amount of hedge
ineffectiveness.

The changes in the fair value of the foreign currency forward exchange
contracts are matched to inventory purchases by period and are recognized in
earnings as such inventory is sold. The fair value of the forward exchange
contracts is estimated by comparing the cost of the foreign currency to be
purchased under the contracts using the exchange rates obtained under the
contracts (adjusted for forward points) to the hypothetical cost using the spot
rate at year-end. We expect to recognize in earnings through January 29, 2005
approximately $0.7 million, net of tax, of existing net gains presently deferred
in accumulated other comprehensive income.

9. COMMITMENTS AND CONTINGENCIES

Lease commitments

We lease retail business locations, office and warehouse facilities,
copier equipment and automotive equipment under operating leases expiring in
various years through 2028. Rent expense for fiscal 2001, 2002 and 2003 was
$78.3 million, $86.0 million and $90.0 million, respectively, and includes
contingent rentals of $0.3 million, $0.8 million and $0.6 million, respectively.
Minimum future rental payments under noncancelable operating leases as of
January 31, 2004 for each of the next five years and in the aggregate are as
follows (in thousands):

40

FISCAL YEAR AMOUNT
- ------------------------------------- ---------

2004................................. $ 91,839
2005................................. 83,178
2006................................. 69,542
2007................................. 58,966
2008................................. 48,211
Thereafter........................... 102,655
---------
Total............................ $ 454,391
=========

Leases on retail business locations specify minimum rentals plus common
area maintenance charges and possible additional rentals based upon percentages
of sales. Most of the retail business location leases provide for renewal
options at rates specified in the leases. In the normal course of business,
these leases are generally renewed or replaced by other leases.

Legal matters

On April 18, 2003, a lawsuit was filed against the Company in the
Superior Court of California for the County of Orange, Case No. 03CC00132 (the
"Orange County Suit"). On April 21, 2003, a lawsuit was filed against K&G Men's
Center, Inc. and K&G Men's Company Inc. (collectively, "K&G"), wholly owned
subsidiaries of the Company, in the Los Angeles Superior Court of California,
Case No. BC294361 (the "Los Angeles County Suit"; the Los Angeles County Suit
and the Orange County Suit shall be referred to jointly as the "Suits").

The Orange County Suit was brought as a purported class action. The Los
Angeles County Suit was brought as a multi-party action. The Suits allege
several causes of action, each based on the factual allegation that in the State
of California the Company and K&G misclassified its managers and assistant
managers as exempt from the application of certain California labor statutes.
Because of this alleged misclassification, the Suits allege that the Company and
K&G failed to pay overtime compensation and provide the required rest periods to
such employees. The Suits seek, among other things, declaratory and injunctive
relief along with an accounting as to alleged wages, premium pay, penalties,
interest and restitution allegedly due the class defendants.

On April 23, 2003, a lawsuit was filed against K&G in the Los Angeles
Superior Court of California, Case No. BC294497 (the "Tailor's Suit"). The
Tailor's Suit was brought as a multi-party action. The Tailor's Suit alleges
several causes of action, each based on the factual allegation that in the State
of California K&G misclassified the tailors working in their stores as
"independent contractors" and refused to classify them as non-exempt employees
subject to the application of certain California labor statutes. Because of this
alleged misclassification, the Tailor's Suit alleges that K&G failed to pay
hourly and overtime compensation and provide the required rest periods required
by such labor statutes. The Tailor's Suit further alleges that K&G violated
several other labor statutes and regulations as well as the California Unfair
Competition Law. It seeks, among other things, restitution, disgorgement due to
failure to comply with California labor laws, penalties, declaratory and
injunctive relief.

As a result of recent mediations, we recognized a charge in the fourth
quarter of 2003 for $3.7 million ($2.3 million, net of tax) which we believe to
be a reasonable estimate of the incremental costs we expect to incur in
connection with the proposed resolution of the Suits and the Tailor's Suit. We
believe that the Suits and the Tailor's Suit will be resolved in 2004; however,
no assurance can be given that the anticipated resolution will be realized. We
do not believe the ultimate resolution of the Suits or the Tailor's Suit will
have a material adverse effect on our financial position, results of operations
or cash flows.

On April 1, 2004, a lawsuit was filed against the Company in the
Superior Court of California for the County of Los Angeles, Case No. BC313038
(the "PII Suit"). The PII Suit, which was brought as a purported class action,
alleges two causes of action, each based on the factual allegation that the
Company requests or requires, in conjunction with a customer's use of his or her
credit card, the customer to provide personal identification information which
is recorded upon the credit card transaction form. The PII Suit seeks: (i) civil
penalties pursuant to the California Civil Code; (ii) an order enjoining the
Company from requesting or requiring that a customer provide personal
identification information which is then recorded on the transaction form; (iii)
permanent and preliminary injunctions against the Company requesting or
requiring that a customer provide personal identification information which is
then recorded on the transaction form; (iv) restitution of all funds allegedly
acquired by means of any act or practice declared by the Court to be unlawful or
fraudulent or to constitute a violation of the California Business and
Professions Code; (v) attorney's fees; and (vi) costs of suit. The court has not
yet decided whether the action may proceed as a class action. The Company
intends to vigorously defend the PII Suit. We do not believe the ultimate
resolution of the PII Suit will have a material adverse effect on our financial
position, results of operations or cash flows.

41

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

10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Our quarterly results of operations reflect all adjustments, consisting
only of normal, recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods presented.
The consolidated results of operations by quarter for the 2002 and 2003 fiscal
years are presented below (in thousands, except per share amounts):

FISCAL 2002
QUARTERS ENDED
-----------------------------------------------
MAY 4, AUGUST 3, NOVEMBER 2, FEBRUARY 1,
2002 2002 2002 2003
-------- --------- ----------- -----------

Net sales.............. $303,857 $ 308,574 $ 292,515 $ 390,103
Gross margin .......... 104,155 107,051 97,940 145,202
Net earnings .......... $ 10,458 $ 7,797 $ 4,285 $ 19,872
Net earnings per share:
Basic .............. $ 0.25 $ 0.19 $ 0.11 $ 0.50
Diluted ............ $ 0.25 $ 0.19 $ 0.11 $ 0.50

FISCAL 2003
QUARTERS ENDED
-----------------------------------------------
MAY 3, AUGUST 2, NOVEMBER 1, JANUARY 31,
2003 2003 2003 2004
-------- --------- ----------- -----------

Net sales.............. $313,122 $ 334,292 $ 322,613 $ 422,653
Gross margin........... 111,219 122,936 118,438 161,350
Net earnings........... $ 11,012 $ 11,448 $ 9,055 $ 18,511
Net earnings per share:
Basic............... $ 0.28 $ 0.29 $ 0.23 $ 0.50
Diluted ............ $ 0.28 $ 0.29 $ 0.23 $ 0.49

Due to the method of calculating weighted average common shares
outstanding, the sum of the quarterly per share amounts may not equal earnings
per share for the respective years.

42

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of the Chief Executive Officer
("CEO") and Chief Financial Officer ("CFO"), evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) as of the end of the period covered by this report. Based on this
evaluation, the CEO and CFO have concluded that, as of the end of such period,
our disclosure controls and procedures were effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by us in the reports filed or submitted under the Exchange Act, within
the time periods specified in the SEC's rules and forms.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting
that occurred during the fourth quarter of fiscal 2003 that materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Except as set forth below, the information required by this Item is
incorporated herein by reference from our Proxy Statement for the Annual Meeting
of Shareholders to be held June 30, 2004.

The Company has adopted a Code of Ethics for Senior Management which
applies to the Company's Chief Executive Officer and all Presidents, Chief
Financial Officers, Principal Accounting Officers, Executive Vice Presidents
and other designated financial and operations officers. A copy of such policy is
filed as an Exhibit hereto.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by
reference from our Proxy Statement for the Annual Meeting of Shareholders to be
held June 30, 2004.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated herein by
reference from our Proxy Statement for the Annual Meeting of Shareholders to be
held June 30, 2004.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated herein by
reference from our Proxy Statement for the Annual Meeting of Shareholders to be
held June 30, 2004.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated herein by
reference from our Proxy Statement for the Annual Meeting of Shareholders to be
held June 30, 2004.

43

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. FINANCIAL STATEMENTS

The following consolidated financial statements of the Company are
included in Part II, Item 8.

Independent Auditors' Report

Consolidated Balance Sheets as of February 1, 2003 and January
31, 2004

Consolidated Statements of Earnings for the years ended
February 2, 2002, February 1, 2003 and January 31, 2004

Consolidated Statements of Shareholders' Equity for the years
ended February 2, 2002, February 1, 2003 and January 31, 2004

Consolidated Statements of Cash Flows for the years ended
February 2, 2002, February 1, 2003 and January 31, 2004

Notes to Consolidated Financial Statements

2. FINANCIAL STATEMENT SCHEDULES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

THE MEN'S WEARHOUSE, INC.
(IN THOUSANDS)

Balance at Charged to Charged to Deductions Balance at
Beginning Costs and Other from Translation End of
of Period Expenses Accounts (4) Reserve (2) Adjustment Period
---------- ---------- ------------ ----------- ----------- ----------

Allowance for uncollectible
accounts (1):

Year ended February 2, 2002 $ 284 $ 197 $ - $ (159) $ - $ 322
Year ended February 1, 2003 322 225 - (106) - 441
Year ended January 31, 2004 441 360 - (411) 3 393

Allowance for sales returns (1) (3):
Year ended February 2, 2002 $ - $ (425) $ 750 $ - $ - $ 325
Year ended February 1, 2003 325 - - - - 325
Year ended January 31, 2004 325 (53) 92 - - 364

Inventory reserves (1):
Year ended February 2, 2002 $ 7,654 $ 3,108 $ - $ - $ (202) $ 10,560
Year ended February 1, 2003 10,560 (3,551) - - 125 7,134
Year ended January 31, 2004 7,134 (588) - - 311 6,857

- ----------

(1) The allowance for uncollectible accounts, the allowance for sales returns
and the inventory reserves are evaluated at the end of each fiscal
quarter and adjusted based on the evaluation.

(2) Consists primarily of write-offs of bad debt.

(3) Allowance for sales returns is included in accrued expenses.

(4) Deducted from net sales.

44

All other schedules are omitted because they are not applicable or
because the required information is included in the Consolidated Financial
Statements or Notes thereto.

3. EXHIBITS

EXHIBIT
NUMBER EXHIBIT
- ------- -----------------------------------------------------------------------------------------------

3.1 -- Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 1994).

3.2 -- By-laws, as amended (incorporated by reference from Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the fiscal year ended February 1, 1997).

3.3 -- Articles of Amendment to the Restated Articles of Incorporation (incorporated by reference
from Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 31, 1999).

4.1 -- Restated Articles of Incorporation (included as Exhibit 3.1).

4.2 -- By-laws (included as Exhibit 3.2).

4.3 -- Form of Common Stock certificate (incorporated by reference from Exhibit 4.3 to the
Company's Registration Statement on Form S-1 (Registration No. 33-45949)).

4.4 -- Articles of Amendment to the Restated Articles of Incorporation (included as Exhibit 3.3).

4.5 -- Revolving Credit Agreement dated as of January 29, 2003, among the Company and JPMorgan
Chase Bank and the Banks listed therein
(incorporated by reference from Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the fiscal
year ended February 1, 2003).

4.6 -- Term Sheet Agreement dated as of January 29, 2003 evidencing the uncommitted CAN$10 million
facility of National City Bank, Canada Branch to Golden Brand Clothing (Canada) Ltd.
(incorporated by reference from Exhibit 4.7 to the Company's Annual Report on Form 10-K for
the fiscal year ended February 1, 2003).

4.7 -- Indenture (including for of note) dated October 21, 2003 among the Company and JPMorgan
Chase Bank, as trustee, relating to the Company's 3.125% Convertible Senior Notes due 2023
(incorporated by reference from Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended November 1, 2003).

4.8 -- Registration Rights Agreement dated October 21, 2003 among the Company and Bear Stearns &
Co. Inc., Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc., Fleet Securities,
Inc. (incorporated by reference from Exhibit 4.2 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended November 1, 2003).

4.9 -- First Amendment to Revolving Credit Agreement, dated October 13, 2003 among the Company,
JPMorgan Chase Bank and the Banks listed therein (incorporated by reference from Exhibit
4.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 1,
2003).

*10.1 -- 1992 Stock Option Plan (incorporated by reference from Exhibit 10.5 to the Company's
Registration Statement on Form S-1 (Registration No. 33-45949)).

*10.2 -- First Amendment to 1992 Stock Option Plan (incorporated by Reference from Exhibit 10.9 to
the Company's Registration Statement on Form S-1 (Registration No. 33-60516)).

*10.3 -- 1992 Non-Employee Director Stock Option Plan (incorporated by reference from Exhibit 10.7
to the Company's Registration Statement on Form S-1 (Registration No. 33-45949)).

*10.4 -- First Amendment to 1992 Non-Employee Director Stock Option Plan (incorporated by reference
from Exhibit 10.16 to the Company's Registration Statement on Form S-1 (Registration No.
33-45949)).

10.5 -- Commercial Lease dated September 1, 1995, by and between the Company and Zig Zag, A Joint
Venture (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended May 4, 1996).

10.6 -- Commercial Lease dated April 5, 1989, by and between the Company and Preston Road
Partnership (incorporated by reference from Exhibit 10.10 to the Company's Registration
Statement on Form S-1 (Registration No. 33-45949)).

*10.7 -- Stock Agreement dated as of March 23, 1992, between the Company and George Zimmer
(incorporated by reference from Exhibit 10.13 to the Company's Registration Statement on
Form S-1 (Registration No. 33-45949)).

*10.8 -- Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated November 25,
1994 between the Company, George Zimmer and David Edwab, Co-Trustee of the Zimmer 1994
Irrevocable Trust (incorporated by reference to Exhibit 10.20 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 28, 1995).

45

*10.9 -- 1996 Stock Option Plan (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended August 3, 1996).

*10.10 -- Second Amendment to 1992 Non-Employee Director Stock Option Plan (incorporated by reference to Exhibit
10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 1996).

*10.11 -- 1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 10.18 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1998).

*10.12 -- First Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 4.1 to the
Company's Registration Statement on Form S-8 (registration No. 333-80033)).

*10.13 -- Second Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference to Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2000).

*10.14 -- Third Amendment to The Men's Wearhouse, Inc. 1992 Non-Employee Director Stock Option Plan (incorporated by
reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
July 29, 2000).

*10.15 -- Second Amendment [sic] to The Men's Wearhouse, Inc. 1996 Stock Option Plan (incorporated by reference from
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2000).

*10.16 -- Fourth Amendment to 1992 Non-Employee Director Stock Option Plan (incorporated by reference from Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 5, 2001).

*10.17 -- Split-Dollar Agreement dated January 14, 2002, by and between the Company and Eric Lane (incorporated by
reference from Exhibit 10.25 to the Company's Annual Report on Form 10-K for the fiscal year ended
February 2, 2002).

*10.18 -- Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25, 1995, by and between
the Company and David H. Edwab (incorporated by reference from Exhibit 10.26 to the Company's Annual
Report on Form 10-K for the fiscal year ended February 2, 2002).

*10.19 -- Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25, 1995, between the
Company, David H. Edwab and George Zimmer, Co-Trustee of the David H. Edwab 1995 Irrevocable Trust
(incorporated by reference from Exhibit 10.27 to the Company's Annual Report on Form 10-K for the fiscal
year ended February 2, 2002).

*10.20 -- First Amendment to Split-Dollar Agreement dated January 17, 2002, between the Company, David H. Edwab and
George Zimmer, Trustee of the David H. Edwab 1995 Irrevocable Trust (incorporated by reference from
Exhibit 10.28 to the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2002).

*10.21 -- Amended and Restated Employment Agreement effective as of February 3, 2003, by and between the Company and
David H. Edwab (filed herewith).

14.1 -- The Company's Code of Ethics for Senior Management (filed herein).

21.1 -- Subsidiaries of the Company (filed herewith).

23.1 -- Consent of Deloitte & Touche LLP, independent auditors (filed herewith).

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

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

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

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

- ----------

* Management Compensation or Incentive Plan

The Company will furnish a copy of any exhibit described above to any
beneficial holder of its securities upon receipt of a written request therefore,
provided that such request sets forth a good faith representation that, as of
the record date for the Company's 2004 Annual Meeting of Shareholders, such
beneficial holder is entitled to vote at such meeting, and provided further that
such holder pays to the Company a fee compensating the Company for its
reasonable expenses in furnishing such exhibits.

(b) REPORTS ON FORM 8-K

46

On November 19, 2003, the Company furnished to the SEC a current report
on Form 8-K pursuant to Item 12 reporting the issuance of a press release that
reported earnings results for the three and nine months ended November 1, 2003.

47

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

THE MEN'S WEARHOUSE, INC.

By /s/ GEORGE ZIMMER
-----------------------------
George Zimmer
Chairman of the Board and
Chief Executive Officer

Dated: April 15, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacity and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------ ------------------------------------------ --------------

/s/ GEORGE ZIMMER Chairman of the Board, Chief April 15, 2004
- ------------------------ Executive Officer and Director
George Zimmer

/s/ NEILL P. DAVIS Executive Vice President, Chief Financial April 15, 2004
- ------------------------ Officer and Principal Financial Officer
Neill P. Davis

/s/ DIANA M. WILSON Vice President and Principal Accounting April 15, 2004
- ------------------------ Officer
Diana M. Wilson

/s/ DAVID H. EDWAB Vice Chairman of the Board and Director April 15, 2004
- ------------------------
David H. Edwab

/s/ RINALDO S. BRUTOCO Director April 15, 2004
- ------------------------
Rinaldo S. Brutoco

/s/ MICHAEL L. RAY Director April 15, 2004
- ------------------------
Michael L. Ray

/s/ SHELDON I. STEIN Director April 15, 2004
- ------------------------
Sheldon I. Stein

/s/ KATHLEES MASON Director April 15, 2004
- ------------------------
Kathleen Mason

48

EXHIBIT INDEX

EXHIBIT
NUMBER EXHIBIT
- ------- -----------------------------------------------------------------------------------------------

3.1 -- Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 1994).

3.2 -- By-laws, as amended (incorporated by reference from Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the fiscal year ended February 1, 1997).

3.3 -- Articles of Amendment to the Restated Articles of Incorporation (incorporated by reference
from Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 31, 1999).

4.1 -- Restated Articles of Incorporation (included as Exhibit 3.1).

4.2 -- By-laws (included as Exhibit 3.2).

4.3 -- Form of Common Stock certificate (incorporated by reference from Exhibit 4.3 to the
Company's Registration Statement on Form S-1 (Registration No. 33-45949)).

4.4 -- Articles of Amendment to the Restated Articles of Incorporation (included as Exhibit 3.3).

4.5 -- Revolving Credit Agreement dated as of January 29, 2003, among the Company and JPMorgan
Chase Bank and the Banks listed therein
(incorporated by reference from Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the fiscal
year ended February 1, 2003).

4.6 -- Term Sheet Agreement dated as of January 29, 2003 evidencing the uncommitted CAN$10 million
facility of National City Bank, Canada Branch to Golden Brand Clothing (Canada) Ltd.
(incorporated by reference from Exhibit 4.7 to the Company's Annual Report on Form 10-K for
the fiscal year ended February 1, 2003).

4.7 -- Indenture (including for of note) dated October 21, 2003 among the Company and JPMorgan
Chase Bank, as trustee, relating to the Company's 3.125% Convertible Senior Notes due 2023
(incorporated by reference from Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended November 1, 2003).

4.8 -- Registration Rights Agreement dated October 21, 2003 among the Company and Bear Stearns &
Co. Inc., Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc., Fleet Securities,
Inc. (incorporated by reference from Exhibit 4.2 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended November 1, 2003).

4.9 -- First Amendment to Revolving Credit Agreement, dated October 13, 2003 among the Company,
JPMorgan Chase Bank and the Banks listed therein (incorporated by reference from Exhibit
4.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 1,
2003).

*10.1 -- 1992 Stock Option Plan (incorporated by reference from Exhibit 10.5 to the Company's
Registration Statement on Form S-1 (Registration No. 33-45949)).

*10.2 -- First Amendment to 1992 Stock Option Plan (incorporated by Reference from Exhibit 10.9 to
the Company's Registration Statement on Form S-1 (Registration No. 33-60516)).

*10.3 -- 1992 Non-Employee Director Stock Option Plan (incorporated by reference from Exhibit 10.7
to the Company's Registration Statement on Form S-1 (Registration No. 33-45949)).

*10.4 -- First Amendment to 1992 Non-Employee Director Stock Option Plan (incorporated by reference
from Exhibit 10.16 to the Company's Registration Statement on Form S-1 (Registration No.
33-45949)).

10.5 -- Commercial Lease dated September 1, 1995, by and between the Company and Zig Zag, A Joint
Venture (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended May 4, 1996).

10.6 -- Commercial Lease dated April 5, 1989, by and between the Company and Preston Road
Partnership (incorporated by reference from Exhibit 10.10 to the Company's Registration
Statement on Form S-1 (Registration No. 33-45949)).

*10.7 -- Stock Agreement dated as of March 23, 1992, between the Company and George Zimmer
(incorporated by reference from Exhibit 10.13 to the Company's Registration Statement on
Form S-1 (Registration No. 33-45949)).

*10.8 -- Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated November 25,
1994 between the Company, George Zimmer and David Edwab, Co-Trustee of the Zimmer 1994
Irrevocable Trust (incorporated by reference to Exhibit 10.20 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 28, 1995).

*10.9 -- 1996 Stock Option Plan (incorporated by reference from Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 1996).

*10.10 -- Second Amendment to 1992 Non-Employee Director Stock Option Plan (incorporated by
reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended August 3, 1996).

*10.11 -- 1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 10.18 to
the

49

Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1998).

*10.12 -- First Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference from
Exhibit 4.1 to the Company's Registration Statement on Form S-8 (registration No.
333-80033)).

*10.13 -- Second Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference to
Exhibit 10.22 to the Company's Annual Report on Form 10-K for the fiscal year ended
January 29, 2000).

*10.14 -- Third Amendment to The Men's Wearhouse, Inc. 1992 Non-Employee Director Stock Option
Plan (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended July 29, 2000).

*10.15 -- Second Amendment [sic] to The Men's Wearhouse, Inc. 1996 Stock Option Plan
(incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended July 29, 2000).

*10.16 -- Fourth Amendment to 1992 Non-Employee Director Stock Option Plan (incorporated by
reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended May 5, 2001).

*10.17 -- Split-Dollar Agreement dated January 14, 2002, by and between the Company and Eric
Lane (incorporated by reference from Exhibit 10.25 to the Company's Annual Report on
Form 10-K for the fiscal year ended February 2, 2002).

*10.18 -- Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25,
1995, by and between the Company and David H. Edwab (incorporated by reference from
Exhibit 10.26 to the Company's Annual Report on Form 10-K for the fiscal year ended
February 2, 2002).

*10.19 -- Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25,
1995, between the Company, David H. Edwab and George Zimmer, Co-Trustee of the David
H. Edwab 1995 Irrevocable Trust (incorporated by reference from Exhibit 10.27 to the
Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2002).

*10.20 -- First Amendment to Split-Dollar Agreement dated January 17, 2002, between the Company,
David H. Edwab and George Zimmer, Trustee of the David H. Edwab 1995 Irrevocable Trust
(incorporated by reference from Exhibit 10.28 to the Company's Annual Report on Form
10-K for the fiscal year ended February 2, 2002).

*10.21 -- Amended and Restated Employment Agreement effective as of February 3, 2003, by and
between the Company and David H. Edwab (filed herewith).

14.1 -- The Company's Code of Ethics for Senior Management (filed herein).

21.1 -- Subsidiaries of the Company (filed herewith).

23.1 -- Consent of Deloitte & Touche LLP, independent auditors (filed herewith).

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

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

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

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

- ----------
* Management Compensation or Incentive Plan

50