JoS A Bank Dons 45 Percent Lower Profits in First Quarter

Andrew Klips  |

Like many other retailers, JoS. A. Bank Clothiers, Inc. (JOSB) said that colder weather at the beginning of the year led to more discounted items, stinging revenue, profits and same-store-sales. The men’s clothing and accessories company reported a 45 percent drop in net income, in line with the fall that analysts were predicting after a modification a few weeks ago.

For the first quarter of fiscal 2013 ended May 4, Hampstead, Maryland-based JoS. A. Bank reported total sales of $196.1 million, down 2.6 percent from $201.4 million in the year earlier quarter. Net income for the quarter totaled $8.1 million, or 29 cents per share, compared to $14.8 million, or 53 cents per share, in the first quarter of fiscal 2012.

Wall Street was expecting profits of 29 cents per share on revenue of $195.5 million.

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Analysts were originally expecting EPS around 46 cents per share previously, but modified expectations after Jos. A. Bank said in mid-May that it only was expecting earnings per share in the range of 27 cents to 30 cents. The company cited lower average selling prices because of discounting winter products as a portion of the reason. Shares prices plunged 7 percent with the less-than-expected guidance, but quickly recovered.

Same-store-sales dropped by 8.5 percent compared to Q1 fiscal 2012. Direct marketing sales, which are driven mostly via the Internet, improved by 12.6 percent. Combined, same-store-sales and direct marketing sales were down 6.4 percent compared to the year prior quarter.

Gross margin tightened from 63.5 percent last year to 60.8 percent.

Expenses took a haircut, with the cost of goods sold declining 4.3 percent to $73.6 million and sales and marketing costs falling 3.3 percent to $85.76 million. General and administrative expenses were nearly flat, totaling $17.59 million, versus $17.53 million last year.

“The company continues to maintain a strong balance sheet and, despite the slow start to the new year, the first quarter of fiscal year 2013 was still profitable," said R. Neal Black, president and chief executive at JoS. A. Bank.

Black added that the slow sales trend carried into May with sales lower than last year. The company continues to refine its merchandising and advertising, including focusing on casual assortments and adding slim-fit suits to inventory to meet customer demand.

Shares of JOSB are up about 5 percent in 2013 through Tuesday’s close at $44.70.

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