Jos. A. Bank earnings leap 138% for 2nd quarter Hampstead menswear company reports rise to $597,000


August 12, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Jos. A. Bank Clothiers Inc. said yesterday that its second-quarter earnings more than doubled from the same period a year ago, beating analysts' estimates and giving the Hampstead-based men's retailer its best second quarter in recent years.

Income from continuing operations jumped 138 percent to $597,000, or 9 cents per share, for the quarter ended Aug. 1. That compared with $251,000, or 4 cents per share, for the second quarter of 1997, Bank said.

The latest figure beat analysts' average expectations of 6 cents per share.

"This is the best second quarter we've ever had, since I've been here," said Timothy F. Finley, chairman and chief executive officer since 1990. "It's usually a loss quarter."

But an especially strong first quarter kept inventories balanced coming into the second quarter, Finley said. That meant Bank was not compelled to slash prices and managed to increase gross margins to 48 percent, from 45 percent in the second quarter of 1997, he said.

"We didn't have any clearance merchandise left," he said.

18 new stores

Sales were driven by the company's tailored clothing, but casual wear also fared well, Finley said.

Comparable-store sales -- at stores open more than one year, typically the gauge retailers use measure success -- fell 4.7 percent for the second quarter, Bank said.

But that figure gives a less than accurate picture of sales, which for all stores were up 6.1 percent to $41.9 million, compared with $39.5 million in 1997, Finley said. Total sales for the first six months of the fiscal year rose 9.1 percent to $85.3 million, from $78.2 million for the same period a year ago.

In a major expansion, the retailer has opened 18 stores in 14 months -- three in the last quarter -- and all in existing markets.

The newer stores, which are not counted as comparable-sales stores, are just beginning to get increased business and pull some sales away from older stores, Finley said, explaining the comparable-sales drop.

"If you open stores in existing markets, that's going to get us," at least temporarily, Finley said. "Our store-opening strategy of locating new stores in existing markets is designed to improve overall earnings and leverage expenses."

The chain, which has 99 stores in 28 states and Washington, is expanding to 140 stores in the next 1 1/2 years.

Jos. A. Bank stock price rose 13 cents per share yesterday, to close at $7.13.

Pub Date: 8/12/98

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