Jos. A. Bank profit rose 34% in quarter


April 18, 2007|By Andrea K. Walker | Andrea K. Walker,Sun reporter

Jos. A. Bank reported strong earnings yesterday as healthy sportswear sales helped offset a weak demand for suits across the industry.

The Hampstead-based company reported a 34 percent increase in fourth-quarter net income, to $24.8 million from $18.5 million in the comparable period last year. Earnings per share were $1.36, beating analysts' projections of $1.25.

Net income for the fiscal year, which ended Feb. 3, increased 21 percent, to $43.2 million from $35.3 million for the previous year. Earnings per share increased to $2.36 from $1.95 a year ago. Thomson Financial expected full-year earnings of $2.24 per share. This fiscal year was a week longer than the previous one.

The men's clothier also said that inventories increased at a slower rate of 3.9 percent for the year. The company has been criticized in the past for high inventory levels.

The company's stock surged 13.9 percent yesterday to close at $38.30.

The company did not release financial guidance for coming quarters. Chief Financial Officer David Ullman said executives would wait until after Father's Day in June to release projections. That holiday marks a crucial sales period for Bank. Last week, the company reported that its March comparable-store sales grew 1.4 percent, falling short of analysts' expectations.

Chief Executive Officer Robert Wildrick said the company will continue its expansion plans despite a general slowdown in the retail market. He said the company will keep expanding its sportswear line, fight for a bigger piece of the suit business, open more stores and introduce products such as its "stay cool" line, which wicks sweat from the body to keep the wearer cool.

An analyst said Bank has been able to leverage some of its fixed costs while expanding, for example advertising the same amount while opening more stores.

The company has also been able to pick up market share from department stores that have lost some male shoppers, said the analyst, Richard Jaffe of Stifel Nicolaus. Competitor Men's Warehouse is also doing well, Jaffe said.

"I think they're one of two men's retailers doing well by gaining market share in a contracting environment," Jaffe said.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.