David Levin - President and CEO Dennis Hernreich - EVP, COO and CFO Jeff Unger - VP of IR

Richard Jaffe - Stifel Nicolaus

Good day ladies and gentlemen and welcome to the Casual Male Retail Group’s Third Quarter Earnings Call for 2009 Conference. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder today's conference call is being recorded. I would now like to introduce your host for today’s conference Mr. Dave Levin. You may begin, sir.

Hi, it's Jeff Unger. Good morning everybody. On our call today is David Levin, our President and CEO; and Dennis Hernreich, Executive Vice President, Chief Operating Officer and Chief Financial Officer. I’d like to read our forward-looking statements and then turn the call over to David. Today’s discussion will contain certain forward-looking statements concerning the company’s operations, performance and financial conditions including sales, expenses, gross margins, capital expenditures, earnings per share, store openings and closings and other matters. Such forward-looking statements are subject to various risks and uncertainties that could cause the actual results to differ materially from those assumptions mentioned today, due to a variety of factors that affect the company. Information regarding risks and uncertainties are detailed in the company’s filings with the Securities and Exchange Commission. Our complete Safe Harbor statement is available at www.casualmale.com. Now, I would like to turn the call over to David.

Thank you, Jeff. Today we announced our third quarter financial results. We are very pleased that the initiatives we enacted to adjust to a difficult retail environment continued to perform to our expectations. Sales for the quarter came in as we expected. Our comps were down 10.6%, which was an improvement from being down 14.1% in the second quarter. At the same time we had a reduction in SG&A of $7.5 million or 18% to offset the loss of top line sales. Included in the lowering of SG&A was a 40% cut in our marketing expenses. We also did not anniversary two promotional events in the quarter. No doubt, this has had an impact on our comp sales, but our strategy this year continues to focus on cash flow and the bottom line. At the same time, we do not believe we are losing any significant market share. We have surveyed several thousand of our existing customers, who have not made a purchase for over 12 months and approximately 90% of them say they deferred shopping during this time period. They plan on shopping our stores when they are ready to make a purchase. We’ve been diligent about our ability to manage our inventory and maximize any gross margin opportunities. Through a combination of improved IMUs, less promotional activity and greater sell-throughs at regular price, our merchandise margins continue to improve from last year. This quarter merchandise margins improved by 240 basis points and we anticipate a 700 to 800 basis points improvement in the fourth quarter. Our inventories at this fiscal end of the year should be down by another $10 million with much less seasonal carryover than we faced going into spring last year. During the last webcast, I mentioned that we’re opening a new prototype version next spring that we hope will be the model of the future development of the hybrid strategy. Today, I’d like to give more color as to what this strategy entails. Prior to the conversion of the five hybrid stores, we had conducted an extensive study among our customers as to what they envision as their ideal shopping experience as a big and tall customer. When we laid out to them, the concept of a superstore where their choices would be expanded along with wider aisles, bigger dressing rooms and onsite tailor and a more exciting presentation of our Lifestyle brands, they highly endorsed the proposition. The customer focus groups and surveys respondents gave us a strong indication, that they would be willing to drive at least an hour, to shop a superstore concept, even willing to bypass the existing store in their own neighborhood. The five hybrid stores we converted this last July were a consolidation of existing Casual Male stores, into Rochester locations that were in close proximity, to the Casual Male stores By combining the two enemies into one hybrid store due to limited floor space capacity, we had to eliminate about 60% of the Rochester assortment. What we are talking about in the superstore which we are naming, Destination Xl, is a full assortment of Casual Male Rochester and even valued price product from B&T factory outlet along with an expanded assortment from ShoesXL, and key items from our LivingXL division. For example, instead of a limited assortment of about 15 Screen Tees Destination will offer over 60 styles, shoes will go from 40 styles to well over 100 styles. Consider this a Casual Male store on steroids. The average square footage required to house this assortment will be from 10,000 to 12,000 square feet. As we open a new superstore , it will also mean we will be closing two to three existing Casual Male stores in that market. So while we see a drop in store counts and a probably a net zero square footage growth, we anticipate that our profitability will improve dramatically. We plan an opening three Destination XL stores in 2010, tweak the prototype accordingly, and assuming this task is successful, then start a rollout process over the next five years. Where and when we open, will be dependent on existing on existing terms of the stores that we do believe we need to close, as to how many superstores we see long-term that is still a working-in-progress. So we see many markets that can support a full Rochester store, that have plenty of customers that would by Rochester brands such as Polo, Calvin Klein and Michel Kors, a store of this nature could have relevance in most of our markets across the country such as Kansas City, S Louis, Minneapolis, Cleveland. These are all are on our radar screen. On average our customer shop at our stores 2.2 times a year and when he shops he is serious about filing his wardrobe needs for the season. By offering the broadest selection will make his shopping experience that much more rewarding. We're pleased with the financial metrics we are delivering with the current hybrids. Destination XL stores should only improve upon that performance. As I commented on the last call CMRG will have lost about $70 million in top line sales over the last two years. We believe when the retail environment gets healthy again, we will have the opportunity to recapture those sales. With our new expense structure firmly in place we anticipate strong cash flow and operating margins over time. Now, Dennis will review the financial results for Q3 and year-to-date.

Thank you David and good morning everyone. Thanks for joining us as we review our third quarter results and discuss our outlook for the balance of the year. We are very pleased to report that despite an over 11% drop in sales for both the quarter and the nine months, the company’s pretax earnings have improve by almost $4million for the quarter and over $5 million for the nine months compared to the corresponding periods of a year ago. : During the quarter and nine months, the company’s merchandize margins improved by 240 basis points and 125 basis points respectively, while SG&A levels have been reduced by approximately 17% in each period. At the end of the quarter inventory levels have been reduced by 17% from a year ago, and as a result earnings per share performance improved to a loss of $0.03 for the quarter and $0.06 for the nine months compared to $0.08 loss in last year’s third quarter and of $0.03 loss for last year's nine months. Most importantly the company’s free cash flow has just improved by over $50 million for the year so far, compared to last year's nine months. The company’s free cash flow improvement together with just under a $5 million share equity sale, producing net proceeds of approximately $12.5 million enabled us to reduce our debt levels from $72 million a year ago to just under $35 million at the end of the third quarter. In addition, the company’s equity availability under its revolver facility currently approximates $50 million. For 2009, I expect the company will generate free cash flow between $15 million and $20 million with debt levels lower to approximately the same $15 to $20 million at the end of year. The company’s sales levels for fiscal 2009 are expected approximate between $390 million and 395 million or down 11% to 12%. Merchandize margins to have improved by approximately 300 basis to 325 basis points with gross margins after occupancy is expected to improve by at least a 100 basis points with an approximate 15% decline in SG&A. Our 2009 estimates for gross margin and SG&A have largely remained constant throughout the year and the free cash flow narrowed slightly by $5 million from previous estimates to reflect actual performance to the third quarter and our cautious posture with respect to the fourth quarter sales trends. In 2010, given the company's dedicated and loyal customer base and by staying within this operating model, I just described, I expect the company to continue to generate free cash flow at 2009 levels and slightly better with flat sales. As David mentioned with a 10% sales recovery overtime beyond 2010 we would expect CMRG to generate 8% to 9% EBITDA or EBIT margins that is driven by the same operating model approach of nominal SG&A growth, solid merchandise margins producing a free cash flow that would approximate this EBIT level flow into a debt free balance sheet. The company's current and future free cash flow is expected to be adequate for CMRG to pursue and fund it's initiative to explore the DXL format David described and if successful growing it out, while also eliminating balance of the company’s debt net in cash in the balance sheet. The Destination XL economic proposition offers a compelling shopping experience likely producing greater sales volumes, higher operating margins and greater rates of return on capital compared to any existing Casual Male store. The first step towards the DXL were the five hybrid stores opened in late quarter two and early quarter three, which have met both our sales and our cash flow expectations collectively annualizing to a cash flow margin of close to 15%, which is up from breakeven level for the store separately the previous year. In the event, the Destination XL test stores are successful most of our markets would support a Destination XL, which would require five or more years to rollout. I’ll now highlight the primary components of Q3 results, starting with sales. For the third quarter, total sales decreased by 11.3% to $88.7 million when compared to total sales of $100 million for the third quarter of last year. Comparable sales for the third quarter decreased 10.6% when compared to the same period of the prior year. This decrease consisted of 9.1% decrease from Casual Male and a 20.6% decrease in our Rochester business. Similar to other high-end retailers, the Rochester division has been significantly impacted by the recession but as expected sales declines are beginning to moderate. For the first nine months of fiscal 2009, total sales decreased by 11.4% to $284.5 million when compared to $321.1 million for the first nine months of last year. Sales shortfall of $36.6 million was driven by a decrease in our comparable sales of 11.8%, which includes a comparable sales decrease of 8.9% from Casual Male and a 24.6% decrease from Rochester. As has been consistent throughout 2009, decreased customer traffic explains the drop in top line sales. For the quarter the company’s retail channel average, transaction level was virtually flat to last year and conversion of customer traffic increased by 2.5%. While our customer does make a visit, they're buying at pre-recessionary levels, which say a lot about the strength of our customer base, and the product assortments and wardrobing ideas assembled by our merchandizing team. Previous to the third quarter the average, transaction levels were approximately 5% below last year caused mostly by Rochester’s just over 10% drop, which again has began to moderate in the third quarter. Another noteworthy healthy trend in our business, which has important implications for the company's longer term free cash flow is, that the quarter four sales contribution has significantly moderated from prior years and CMRG sales are more evenly distributed by quarter. In 2006 over 31% of the company’s sales were generated in quarter four, while in 2009 we’re expecting just over 27%. Therefore profitability has become less seasonal and somewhat more evenly distributed throughout the year in contrast to 2006 where more than 50% of the company’s profitability occurred in quarter four. For the third quarter, our gross margin rate inclusive of occupancy cost was 42.7% compared to gross margin rate of 42.2% for last years third quarter. The increase of 50 basis points was the result of increased merchandise margins for the third quarter of 240 basis points offset by an increase of 190 basis points in occupancy cost. The unfavorable occupancy rate continues to be a result of relatively fixed occupancy cost over a decreased sales base, the actual occupancy cost in dollars for the third quarter were flat to last year. We expected a merchandise margin improvement during the quarter given the low inventory levels and higher rate of full price selling compared to a year ago. For the first nine months, our gross margin rate was 43.3% as compared to 44.2% for the nine months of last year. The decrease in gross margin rate was the result of a 125 basis point increase in merchandise margins, offset by a 215 basis point increase in occupancy cost. Similar to the third quarter results, occupancy cost as a percentage of sales for the first nine months are unfavorable due to the relatively fixed cost over a decreased sales base, and likewise occupancy costs in dollars were flat to last year's nine-month period. Our merchandise margin increase of a moderate 125 basis points reflects the impact during the first quarter of '09 of some residual fourth quarter '08 clearance merchandise. As stated above, we anticipate our merchandise margins for the full year of 2009 to increase by between 300 to 325 basis points over last year, partially offset by unfavorable deleveraging the fixed occupancy cost by approximately 190 to 200 basis points for an expected gross margins improvement of between 110 to 125 basis points for the year. SG&A expenses for the third quarter of '09 were 39.8% of sales, as compared to 42.7% for the third quarter of last year. On a dollar basis SG&A decreased by $7.5 million, or 17.4% in comparison to last year's third quarter. For the nine months SG&A expenses were 37.9% of sales as compared to 40.3% for last year's nine month period. On a dollar basis, SG&A dropped by $21.6 million, or 16.7% when compared to last year's same period. Approximately half of these savings was a result of our revised marketing objectives, which have been refined to focus on our most productive customer base. As the percentage of sales, marketing spend has dropped by approximately 280 basis points in quarter three and for the nine months. The remainder of these savings resulted from our cost reduction efforts throughout the organization, including corporate overhead distribution, field productivity and staff reductions. With the weakness in sales continuing this quarter, strong expense control has been a significant priority for us. We remain committed to managing our SG&A cost while continuing to invest in our marketing campaigns and growing our direct businesses. As mentioned above, we expect to reduce our annual SG&A expenses for '09 by approximately 15% to $152 million or $26 million less than 2008. At the end of the quarter, CMRG had 485 stores after closing 10 stores and opening one store during the year. We are expecting to end the year with 480 stores after five more store closings planned for the fourth quarter. For the year, eight of the store closings have been Rochester stores. We expect for 2009 that 98% of Casual Male Retail Group's store portfolio will be profitable on a four-wall basis. This concludes my comments on our third quarter results and financial expectations for the year. Kevin, David and I will be happy to answer any questions.

(Operator Instructions) Our first question comes from Richard Jaffe with Stifel Nicolaus. Richard Jaffe - Stifel Nicolaus: Two questions, one would you take us through the XL superstore the Destination XL, besides the store and the kind of commitment you see putting into one of those stores to built that out to inventory and then the result, the kind of productivity you think you can achieve having Shoes with the Living accessories with the broader apparel assortment.

We haven't given a lot of numbers as to how the four-wall is going to perform. Based on what we have done with the hybrid, we are seeing extremely positive results and what kind of cash flow we can generate per store. As I said before, the stores are going to be 10,000 to 12,000 square feet on an average to house all the products that we are talking about, and what we are really doing; it won't be much increase in inventory because we are going to collapsing the inventories from the stores that we are going to be closing. As far as the build outs, we have not defined as to exactly what the average cost will be to open these stores at this time, and will be giving more information on that probably in the next quarter. Richard Jaffe - Stifel Nicolaus: The remaining Rochester stores, is there a calendar for closing those?

No. We don’t really plan on closing all the Rochester stores. There are Rochester stores that have performed quite well in New York, Chicago, Beverly Hills and some of the other markets. For example, Dallas, Houston, which are solid stores, we really believe that expanding those if we could find the right location into the Destination XL as a concept we’ll enhance those performers. So I would say we probably have several more Rochester stores that will close overtime. Richard Jaffe - Stifel Nicolaus: Then become…

…Markets. Richard Jaffe - Stifel Nicolaus: Either DXL or hybrid stores of some sort in that market?

Right. So the reality is, we are not going to be opening anymore Rochester stores or anymore Casual Male stores in the future. Everything will be working towards this goal of consolidating into the bigger box. Richard Jaffe - Stifel Nicolaus: I guess the other opportunity is integrating the internet into a single platform for all the catalog brands and the two to three different store venues?

You’re exactly right. The timing on that will coincide very close to the first openings of these stores but there will be one master site Destination XL. We’re seeing very positive results from the mailing piece when we mail a portfolio, which is really a combination of catalogs in one mailing. We’re seeing increased average transactions going on there. So if you look at our mailings, we are already starting to introduce the word Destination XL from a marketing point of view for our direct channel.

(Operator Instructions). We have no further questions at this time.

Okay, well thank you for joining us today and we look forward to our results for the year end.

Ladies and gentlemen that concludes today’s presentation, you may now disconnect.