Please ensure Javascript is enabled for purposes of website accessibility

JoS. A. Bank Clothiers 3Q earnings up 9%, adjusted for special expenses

JoS. A. Bank Clothiers 3Q earnings up 9%, adjusted for special expenses

Listen to this article

Jos. A. Bank Clothiers Inc. announced favorable quarterly earnings Thursday, emphasizing the company’s growth strategies and marketing efforts, and briefly mentioning the potential for acquisitions.

The Hampstead-based company reported a 9 percent increase in adjusted earnings per share for the third quarter of fiscal 2013 from 47 cents to 51 cents — at the high end of its November projection.

The earnings excluded about $1.2 million in legal and professional expenses connected with Bank’s proposed acquisition of Men’s Wearhouse.

CEO R. Neal Black addressed the proposed acquisition briefly during a conference call Thursday morning, but instructed listeners not to ask about the potential combination with Men’s Wearhouse during the question-and-answer period.

“Despite the fact that they would not engage with discussions before, it seems they now agree that a combination of our companies would make sense,” said Black of Men’s Wearhouse. “Work is underway but I cannot give you a timeline of when that work will be completed.”

The company is considering a variety of acquisition options, he said, but the holiday sales season comes first.

Asked about the possibility of other options, Mark Montagna, senior research analyst for Avondale Partners, who covers Jos. A. Bank, said: “I think there certainly could be some private companies that are much smaller that could have some growth potential.”

But he added: “The fact that their primary focus is on the Christmas season is the correct focus to have.”

Brian G. Rafn, principal at Morgan Dempsey, expressed concern that the acquisition proposal has already taken away from the holiday sales efforts. Morgan Dempsey, which owns about 0.7 percent of Jos. A. Bank, is open to the idea of acquisitions, but not of Men’s Wearhouse.

“It would make more sense in our opinion if they go out and find a small chain,” said Rafn. “Swallowing an elephant … with cheap clothing is a disaster.”

Discussing the results for the quarter, Black emphasized the success of adjusted marketing efforts, with a focus on increased price points and fewer promotions, as well as the growing popularity of specially sized items — slim and trim or big and tall, for example.

“I think that they have some difficulties previously,” said Montagna, reacting to Black’s explanation. “They are correcting course in terms of marketing and emphasizing the right mix of promotions and less promotional items.”

Bank’s deep discounts and promotions like “buy one, get three free” sales have become too frequent in recent years, said Rafn, leading to diminishing returns.

The company has started charging higher prices on shirts, said Black, seeing them, as a margin-building opportunity.

“The customer is responding well to the changes we are making in the promotional side of our business, and our nonpromotional business continues to grow strongly,” said Black in a statement Thursday morning, pointing to an increase in sales as proof.

The company’s net sales of $247.5 million for third-quarter 2013 were 6.3 percent higher than the prior-year third quarter, but total sales for the first three quarters were still behind the corresponding 2012 number.

Jos. A. Bank stock closed Thursday at $56.46, off 43 cents. Men’s Wearhouse closed at $51.13, off 54 cents.

Networking Calendar

Submit an entry for the business calendar