Shares of Jos. A. Bank bounce back by 10%

June 22, 2006|By ANDREA K. WALKER | ANDREA K. WALKER,SUN REPORTER

Shares of Jos. A. Bank, which were battered this month after a weak first-quarter earnings performance, rebounded more than 10 percent yesterday after an analyst upgraded its stock.

On June 8, the Hampstead-based men's apparel company watched its stock plummet $10.73, or nearly 29 percent to close at $26.40. The company, known for its heavy promotions, said it may have advertised too aggressively, causing shoppers to buy more discounted fall merchandise than expected and resulting in lower profit margins.

But some analysts suggested yesterday that Wall Street might have reacted too strongly.

Margaret B. Whitfield, an analyst with Ryan Beck & Co. in New Jersey, upgraded the Bank stock to "outperform" from "market perform" yesterday, noting that the stock had dropped more than 40 percent since June 7.

Her report caused shares of Jos. A. Bank to shoot up more than 10 percent, or $2.30, to close $24.54. It had traded as high as $48.12 this spring. Whitfield does not own shares of the company.

"The shares have dipped in part due to lowered earnings expectations but also due to the perception of poor communications with the investor community on issues," she wrote.

Robert Wildrick, Jos. A. Bank chief executive officer, and David Ullman, the company's chief financial officer, did not return calls yesterday.

But during the company's first-quarter conference call this month, Wildrick called the earnings an aberration. He became testy when analysts questioned whether the retailer's high inventory levels were deliberate. He also said that shoppers weren't buying as many suits as before.

Paula Kalandiak, an analyst with Roth Capital Partners, downgraded Bank's stock June 8 after the earning report but wasn't ready for an upgrade yesterday. Kalandiak was traveling yesterday and unavailable for an interview.

In a recent report, she wrote that Bank's selling of winter wear was a result of customer demand and not trying to clear excess inventory. They would have lost sales without the discounts because people weren't ready for spring apparel, she said in the report. However, she wanted to stay on the "sidelines" until other information, such as June sales, are available.

Whitfield said in her report that she expects decent sales this summer because casual attire is popular. Suit sales haven't done well throughout the apparel industry. She also said it looked as if the company had a "decent" Father's Day, an important sales day in men's retail.

andrea.walker@baltsun.com

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