Jos. A. Bank Takes Unusual Path As Retailer With Record Results
09 April 2009 - 5:54AM
Dow Jones News
Jos. A. Bank Clothiers Inc. (JOSB) Wednesday posted its best
fourth-quarter and annual financial results in its more than
100-year history as the suit and casual-wear retailer rides out the
recession with help from direct connections with suppliers and a
promotional, but profitable, selling approach.
Jos. A. Bank caters to white-collar employees who are struggling
mightily because of the economy's pullback, and its category --
higher-end men's apparel -- is stagnant, at best. However, the
company has a leg-up on department stores through its direct
sourcing arrangement with vendors and, while promotional, is more
price competitive than other retailers that specialize in men's
suits.
Jos. A. Bank is "an attractive retail concept with low fashion
risk, a tremendous track record of success, an experienced
management team, a pristine balance sheet and a cheap [stock]
valuation," said Scott Krasik, retail analyst at CL King &
Associates, who rates shares a strong buy and has a price target of
$39.
The company posted fourth-quarter results that included a 19%
jump in revenue to $248.5 million on higher same-store sales.
Analysts expected to see revenue come in at $227 million, and
investors are responding to the results. Shares moved up 17%, or
$4.98, to $34.02 in recent trading, and the stock has more than
doubled from the multi-year closing low of $15.78 in
mid-November.
The results show Jos. A. Bank had its best quarter during the
Christmas holiday season, and are a far cry from those of
competitors that include Brooks Brothers, Men's Warehouse Inc. (MW)
and department stores like Nordstrom Inc. (JWN) and Macy's Inc.
(M).
Jos. A. Bank sells largely through its roughly 460 namesake
stores, located mainly in high-end, specialty retail centers, and
is successfully taking share from rivals and growing its top and
bottom lines. However, the economy is prompting the company to
re-evaluate the timing of plans to grow to 600 stores by 2012,
according to a regulatory filing the company made Wednesday.
Jos. A. Bank representatives didn't immediately return phone
calls requesting comment and the company plans to hold its
conference call to discuss results on Thursday.
Gross profit margin was essentially unchanged, 61.9% at the end
of fiscal 2008, compared with 62.7% the year before. The steadiness
is unusual in a retail group whose margins have been significantly
contracting because of broad discounting to woo recession-hit
consumers.
Sales have been helped by some pretty unique promotions: Last
month, the retailer offered to refund up to $199 of a suit's price
and allow customers to keep it if they are laid off through early
summer.
"It's like giving all of our customers a bit of unemployment
insurance" as they interview for a new job, Chief Executive R. Neal
Black said in a statement.
-By Karen Talley, Dow Jones Newswires; 201-938-5106;
karen.talley@dowjones.com