Bear of the Day: Jos. A. Bank (JOSB) - Bear of the Day
18 Août 2013 - 10:20AM
Zacks
Jos. A. Bank (JOSB), Zacks Rank #5 (Strong
Sell), is an apparel retailer specializing in menswear.
Although their clothes can help make a fashion statement, the stock
is not likely to look good in your portfolio.
Recent profit warning:
On August 15th, the company guided its Q2 profit
outlook lower. Earnings per share were seen somewhere between
$0.49 and $0.53 compared to a Zacks Consensus Estimate of
$0.66. In the press release, Jos. A. Bank noted that
customers did not respond well to promotion and total sales
declined 11% in the quarter.
The profit warning comes in the wake of a longer term downtrend
in gross margin. Gross margin peaked at 62.93% in the April 2011
quarter and has since fallen to 57.78% in the April 2013
quarter. Margins have compress to levels last seen in
2004.
A struggle to post positive earnings
surprises:
Over the last ten quarters, the company has posted four positive
earnings surprises and five negative earnings surprises meeting
estimates one time. The inconsistent track record is
unappealing for investors and highlights execution risk in a
competitive industry.
Earnings estimates are falling:
As the price earnings estimate revision chart displays, earnings
estimates have been steadily declining, and the downtrend is
unlikely to stall given the company’s recent announcement.
![](http://staticzacks.net/images/zacks/blogs/1376684127_scaled_425.jpg)
Valuation is unexciting:
The stock is trading about 13.7 times expected 12 month forward
earnings per share. This is about 1.0 above the ten year
median. The stock is not cheap at a time when there are
questions around the future earnings outlook.
An alternative:
Those who want exposure to the men’s apparel space may want to
try on Men’s Warehouse (MW). It is a Zacks Rank #2 (Buy).
Earnings revisions for FY 2013 and FY 2014 have been creeping
higher over the past 30 days. The stock is also trading about
13.3 times forward 12 month earnings per share which is about 1.0
under the ten year median. On a relative basis, it looks more
attractive than Jos. A. Bank.
JOS A BANK CLTH (JOSB): Free Stock Analysis Report
MENS WEARHOUSE (MW): Free Stock Analysis Report
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Zacks Investment Research
Jos. A. Bank Clothiers (NASDAQ:JOSB)
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