Jos. A. Bank reports weak quarter

Flat revenue, drop in profit laid partly to failed promotion


May 26, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Jos. A. Bank Clothiers Inc. released a grim earnings report yesterday, reporting flat revenue and sharply lower net income for its fiscal first quarter. The Hampstead-based retailer pinned much of the blame for the weak numbers on a failed promotion that held down early spring sales.

The chain had revenue of $43.6 million in the quarter, which ended May 1. That barely edged out the $43.4 million it pulled in a year ago.

Bank had quarterly net income of $472,000, or 7 cents per diluted share. In the year-ago quarter, the company had net income of $777,000, or 11 cents per share.

In addition, the clothier said comparable-store sales were down 8 percent during the quarter, while during last year's first quarter this measure was up 5 percent. Bank tried to boost sales in March with a promotion that tied customers' savings to the size of their purchases, an approach the company admitted was a failure.

"We are disappointed by our first-quarter sales, and we believe that March was clearly an aberration," Bank Chairman and Chief Executive Officer Andrew A. Giordano said in a statement. "We expect the remainder of the year to be strong, as evidenced by our current store sales trends."

Giordano said Bank, founded in 1905, is seeing an upswing in catalog and Internet sales.

Kenneth M. Gassman, a retail analyst at Davenport & Co. in Richmond, Va., also tried to look on the bright side of the numbers. "They could have been a whole lot worse," he said.

Gassman added that the dip in same-store sales was offset a bit by persistent cold weather that allowed Bank to sell winter clothes at or near full price.

Bank's earnings report came four days after it announced that Timothy F. Finley, the executive credited with reviving the company, was stepping down after 8 1/2 years. Giordano has taken over the company temporarily while Bank's board looks for Finley's replacement.

Bank will take a one-time charge of about $1.8 million in its second quarter for severance costs related to Finley's departure.

Shares fell 62.5 cents yesterday to close at $6.625.

Pub Date: 5/26/99

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