Jos. A. Bank earnings rose in fourth quarter

Retailer is expanding stores and offerings, experimenting with new formats

March 30, 2011|By From Sun Staff and news services

Men's apparel and accessories retailer Jos. A. Bank Clothiers Inc. reported Wednesday higher quarterly results that beat market expectations.

The Hampstead-based company, which has been expanding its store base, saw strong demand in November, helped by Black Friday sales in the lead-up to the holiday season.

Fourth-quarter earnings rose to $40.9 million, or $1.47 a share, compared with $35.5 million, or $1.28 a share, a year ago. Revenue jumped 14 percent, to $318.3 million, the company reported.

Wall Street was expecting earnings of $1.43 a share on revenue of $305.7 million.

The chain, established in 1905, sells its products through retail stores, the Internet and catalogues, and operates 510 stores in 42 states and the District of Columbia. The company added 36 stores during the past year.

The company has been experimenting with a new format of outlet store and, in the past year, also has begun to make inroads into the tuxedo rental business, going head to head with national retailer Men's Wearhouse. That chain says it has a 25 percent to 30 percent share of the $1.2 billion national tuxedo rental market.

Margaret Whitfield, a senior retail analyst for Sterne Agee, estimated that Bank's tuxedo rental revenue would start at roughly $36 million a year. Bank did not report results for its tuxedo rental segment.

"We're looking at a reasonable start to the business," Whitfield said, noting that Bank aims to eventually capture as much as 30 percent of the tuxedo rental market.

Jos. A. Bank tends to have customers with higher household income than Men's Wearhouse shoppers and caters to businessmen 35 and older. The tuxedo rental business should offer opportunities for Bank to draw new customers, Whitfield said.

Jos. A. Bank opened five factory outlet stores last year, selling apparel made expressly for outlets as opposed to clearance items. The company said it expected to open 10 to 12 outlet stores this year, but did not specify locations, and said it would convert some of its clearance stores to outlets.

"The outlets should be very profitable for them," though the company has yet to build up the necessary critical mass of stores, Whitfield said. "Outlet traffic is something you can count on, and the store payroll is lower. The idea is to go after prime real estate in prime outlet centers."

The company's shares, which have gained nearly 14 percent since the company reported third-quarter results in December, closed at $48.72 on Tuesday on Nasdaq.

Baltimore Sun reporter Lorraine Mirabella and Reuters contributed to this article.

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