Jos. A. Bank Clothiers Inc. Wednesday reported double-digit increases in second-quarter sales and profits as it registered higher earnings for the 17th consecutive quarter.
In the three months ended Aug. 1, the Hampstead, Md.-based men’s specialty retailer said net income rose 31.7 percent to $16.5 million, or 59 cents a diluted share, 6 cents better than the 53 cents expected, on average, by Wall Street analysts. Year-ago profits came to $12.5 million, or 45 cents.
Sales in the quarter grew 12.3 percent to $188.4 million from $167.7 million in the year-ago period. Same-store sales improved 9.2 percent while direct marketing revenues added 12.4 percent. Gross margin grew to 62.8 percent of sales from 61.5 percent in the 2009 period.
In the half, net income bounded 34.7 percent to $32.3 million, or $1.16 a diluted share, from $24 million, or 86 cents. Sales rose 11.2 percent to $366.5 million from $329.7 million.
But despite the strong showing, the future is a little murky as the retailer faces the same economic uncertainty as the rest of the country.
Neal Black, president and chief executive officer, said after a strong Father’s Day, when he was “feeling better about the state of the consumer,” sales dropped off in July and August, putting a damper on his outlook. “We’re cautious about the rest of the year.”
Black said promotions are still driving sales and Jos. A. Bank works to change its products and offers all the time to motivate customers to visit the store. Once there, he said, if the merchandise looks good and represents good value, they buy. Specifically, suits have been strong, although Black acknowledged that “it isn’t because the suit business is any good out there, but we’re getting market share.” In terms of sportswear, the most “wearable and comfortable” items with “classic styling” have sold best, he said. “Conditions are good for us because our product is safe, good quality and represents a decent investment.”
Black said he is “pleased” with both of the company’s newest initiatives: tuxedo rentals and outlet stores. Because tuxedo rentals represent forward business, Black said sales in 2010 will cover the company’s investment and it won’t be until 2011 and beyond when it will be a meaningful contributor to the bottom line. Regarding the three outlet stores, “it’s too soon to tell,” Black said, “but there’s nothing in the initial results to make us think we were wrong about it.”
The firm’s shares added $4.68, or 12.9 percent, to close at $41.12. The percentage increase was the third largest of the 171 firms monitored by WWD.
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