Jos' FY12 Net Income to Decline - Analyst Blog
January 29 2013 - 7:50AM
Zacks
Battered by increased input costs
along with higher marketing expenses, Jos. A. Bank
Clothiers Inc. (JOSB) anticipates that its net income for
fiscal 2012 will decline 20% from the previous fiscal level of
$97.5 million. However, this Zacks Rank #4 (Sell) company is still
expecting to post positive income in the fourth quarter and fiscal
2012.
Per the company, total sales for
the fiscal are higher than the fiscal 2011 level and have crossed
the $1.0 billion sales landmark. This is the first time in the
company’s history that it has touched this milestone.
Currently, the Zacks Consensus
Estimate for fiscal 2012 revenue is pegged at $989.0 million, while
earnings per share stand at $3.67.
Moreover, following the footsteps
of its competitors, Citi Trends, Inc. (CTRN),
DSW Inc. (DSW) and Express Inc.
(EXPR), Jos has opened 46 new stores during fiscal 2012 and intends
to add 45 to 50 more new stores in fiscal 2013. We believe that the
company’s strong balance sheet and ability to generate solid cash
flow facilitate it in expanding the store network.
Further, the company’s
fourth-quarter sales have been negatively impacted by Superstorm
Sandy along with a diversion generated from Presidential election
and uncertainty over fiscal cliff. Moreover, the company’s one of
the strongest holidays selling season was hit by unfavorable
weather conditions despite the strong marketing and promotional
strategies. However, the company’s direct marketing business is
doing well and has registered year-over-year double-digit sales
growth during the fourth-quarter-to-date period.
For the quarter, the current Zacks
Consensus Estimate for revenue and earnings per share are pegged at
$232.0 million and $1.76, respectively.
Jos has a unique business model of
offering products initially at higher mark-ups and then provide
discount on them. The company is famous for its ‘buy one get seven’
and ‘70% off’ deals, which have worked for years.
This is the first time that the
company’s aggressive marketing and promotional steps didn’t pay off
well. Therefore, we believe that the company needs to revive its
marketing strategies according to the current market scenario and
competition.
CITI TRENDS INC (CTRN): Free Stock Analysis Report
DSW INC CL-A (DSW): Free Stock Analysis Report
EXPRESS INC (EXPR): Free Stock Analysis Report
JOS A BANK CLTH (JOSB): Free Stock Analysis Report
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