Jos. A. Bank earnings triple in third quarter

Men's clothing chain earns 21 cents a share, up from 7 cents in 2000

November 20, 2001|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Jos. A. Bank Clothiers Inc. said yesterday that its earnings tripled in the third quarter, driven by increased sales of suits and casual apparel, lower costs of buying goods and improved quality of the chain's line of clothing.

Net income rose to $1.3 million, or 21 cents per share, in the quarter that ended Nov. 3, from $407,000, or 7 cents per share, in the third quarter of 2000, the men's apparel retailer reported.

The Hampstead chain initially had anticipated doubling its earnings per share, then, earlier this month, said it expected to beat that prediction.

"We feel our strategy is working extremely well right now," Robert N. Wildrick, Bank's chief executive officer, said yesterday.

The strong results, a third straight quarter of record earnings, "is due to the customer recognizing the additional quality we've put in the merchandise," Wildrick said.

Bank has outperformed competitors in men's apparel retailing over the past several months, at a time when consumer spending has slowed in a weakened economy.

Most retailers have seen their sales slow sharply or drop off from last year, as consumers worry about layoffs and rising unemployment.

In October, overall retail sales at stores open at least a year rose just 0.9 percent compared with last October, according to the Goldman Sachs retail composite index.

At Bank, third-quarter sales increased 14.2 percent, to $50 million, while sales at stores open at least a year rose 4.3 percent in the quarter and 7.2 percent in October, the company said.

The chain was able to boost its gross profit margins by 3.4 percent, bringing gross margins to 53.9 percent of sales. The company boosted margins by cutting out the middleman and dealing more directly with factories as well as by taking fewer markdowns on merchandise that was selling well, Wildrick said. Some of the cost savings went into improving quality, which has helped drive sales, Wildrick said.

While sales of suits have improved, some of the best sellers have come from the chain's expanding assortment of casual wear, including leather bomber jackets, silk polo shirts and cotton, no-wrinkle shirts.

Wildrick credited his sales team with aggressively selling and marketing the products after the company decided it would not resort to layoffs to cut costs.

"Whereas a lot of companies were laying off, our people weren't out looking for jobs; they were calling customers trying to get business," he said.

Sales have also been up in the catalog business, which the company has tried to improve by upgrading printing and photography.

The company has kept up with an ambitious expansion plan, opening eight new stores during the quarter and 22 stores during the year, to bring the total to 135. Another 20 to 30 stores are planned for next year.

Shares of Bank closed at $8.20, up 48 cents, about 6 percent.

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