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Jos. A. Bank Reports In-Line Q4 Earnings

Zacks Equity Research

Jos. A. Bank Clothiers Inc.’s (JOSB) adjusted earnings for the fourth quarter of fiscal 2013 rose approximately 9.2% year over year to $1.07 per share. Moreover, the earnings came in line with the Zacks Consensus Estimate.

On a reported basis, earnings per share were 98 cents for the quarter versus $1.01 in the year-ago quarter. Fourth-quarter fiscal 2013 earnings included a legal and professional charge of 7 cents per share related to the takeover by The Men’s Wearhouse Inc. (MW) and 2 cents related to asset impairment charge. Further, fourth-quarter fiscal 2012 reported earnings included a gain of 5 cents per share due to an additional week in the quarter and a charge of 2 cents related to asset impairment.

Net sales in the 13-week period inched up 0.4% to $356 million from $355 million reported for the 14-week period in the year-ago quarter. However, on a 13-week comparable basis, net sales increased 4.7% primarily driven by improved comparable-store sales (comps) as well as Direct sales.

Comps for the quarter rose 1.8% in the quarter. The company revealed that during the period between Nov 3 and Dec 24, comps registered an increase of 9.1%, which was later partially offset by unfavorable weather conditions. Direct sales rose 10.6% year over year.

For fiscal 2013, Jos. A. Bank’s net sales fell 1.6% year over year to $1,032.2 million. Further, the company reported a decline of 20.4% in its GAAP earnings to $2.26 per share.

Overall, Jos. A. Bank attributes the impressive fourth-quarter performance to the implementation of new promotional strategies over the past few quarters. These measures helped the company to achieve marketing efficiency and thereby boost results. Additionally, the company continues to benefit from robust performances in its non-promotional segments, which have recorded consistent sales growth.

Balance Sheet

As of Feb 2, 2014, cash and short-term investments were $445.5 million and there was no long-term debt. During fiscal 2013, Jos. A. Bank generated cash flow of $98.2 million form operational activities and deployed $29.3 million toward capital expenditure.

Recent Development

Jos. A. Bank and Men’s Wearhouse entered into a merger deal on Mar 11. Per the deal, Men’s Wearhouse will acquire all shares of Jos. A. Bank in an all-cash transaction of $65.00 per share or $1.8 billion. The merger process will expectedly be complete by the third quarter of fiscal 2014.

Other Stocks to Consider

As the stock is currently trading around the buyout bid price, it is wise to stay away from it. However, some other retail stocks which are worth considering are American Apparel, Inc. (APP) and Foot Locker, Inc. (FL), both of which have a Zacks Rank #2 (Buy).

Read the Full Research Report on FL
Read the Full Research Report on MW
Read the Full Research Report on JOSB
Read the Full Research Report on APP

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