Men's retailer Jos. A. Bank Clothiers Inc. said profits took a more than 11 percent dive in the third quarter, hurt by extra markdowns that drove the apparel sales and by Hurricane Sandy's strike to the East Coast.
Net income fell to $13.3 million in the three months that ended Oct. 27, an 11.2 percent drop compared with net income of $15 million in the year-earlier period, the Hampstead-based company said Wednesday.
The company earned 47 cents per share, down 13 percent from 54 cents per share earned in the third quarter of 2011. Earnings missed analysts' estimates of 56 cents per share and sent shares down 7.25 percent to close at $43.85 per share on the Nasdaq.
Earnings fell despite an 11 percent increase in total sales and a nearly 5 percent gain in same-store sales, the company said. Total sales rose to $232.9 million from $209.6 million in the third quarter of 2011. Sales at stores open at least a year were up 4.8 percent and direct marketing sales rose 25.8 percent.
But operating income margin was squeezed by the additional markdowns and promotions that drove those sales, said Jos. Bank CEO R. Neal Black in a statement.
"Also, Hurricane Sandy, which hit along the East Coast where the majority of our largest volume regions are located, negatively impacted third quarter sales, particularly when we ran a big promotion right at the end of the quarter," Black said.
He said the effects of the hurricane and the distractions of the national election have hurt business in November, the start of the fourth quarter, when same-store sales have been down.
"With the critical month of December still ahead of us, and continued pressure on margins, we remain cautious for the outcome of the fourth quarter," Black said in the statement.
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