JoS. A. Bank Shares Gain on Q3 Forecast - Analyst Blog
14 Novembre 2013 - 12:01AM
Zacks
Shares of JoS. A. Bank Clothiers Inc. (JOSB)
rallied 3.5% following the announcement of an encouraging guidance
for the third quarter of fiscal 2013. The company is scheduled to
report third-quarter results before the stock market opens on Dec
5, 2013.
JoS. A. Bank projects adjusted earnings per share for the
third-quarter to grow 4% – 9% year over year, ranging from 49 – 51
cents per share, compared with 47 cents per share earned in the
year-ago comparable quarter. Results for the third quarter continue
to benefit from positive trends witnessed near the close of the
second quarter, partially offset by the shutdown of government
offices in the third quarter.
The company’s adjusted earnings forecast for the to-be-reported
quarter excludes legal and professional charges of about 2 – 3
cents per share associated with the proposed acquisition of rival,
The Men’s Wearhouse Inc. (MW).
Further, the company anticipates sales growth in the mid
single-digits range, driven by a double digit upside in its direct
business and nearly flat comparable store sales projections.
Together, sales from the company’s comparable stores and online
portal are expected to increase in the low single digits.
Driven by the improved sales forecasts, the company expects its
gross margin rate to grow for the second consecutive quarter,
reporting a slight increase in the third quarter.
Overall, JoS. A. Bank attributes the impressive third-quarter
performance to the gains realized from the implementation of new
promotional strategies and their adjustments in the past few
quarters. This has helped the company achieve marketing efficiency
while boosting third-quarter results. Alongside, the company
continues to gain from the outstanding performance of its
non-promotional segments, which continue to post sales
improvement.
Going forward, the company expects to sustain the sales growth
trend, on account of the strategies in place for its brands.
Last month, the Hampstead, MD-based men's apparel retailer proposed
to acquire its greater rival Men’s Wearhouse for $48 per share
(total of $2.3 billion) cash. However, the latter rejected the bid
outright describing it as “opportunistic” and “inadequate”.
Following the rejection, JoS. A. Bank communicated a deadline of
Nov 14, 2013 for Men’s Wearhouse to rethink on the bid.
In a recent development, Men’s Wearhouse’s largest shareholder,
Eminence Capital LLC, urged the board at Men’s Wearhouse to engage
in talks for a takeover bid with JoS. A. Bank before the Nov 14
deadline. Though Eminence Capital, which owns 9.8% stake in Men’s
Wearhouse, believes the offer of $48 per share was too low, it
expects JoS. A. Bank to raise the bid.
Jos. A. Bank believes the merger will prove beneficial to the
shareholders and customers of both the companies, creating a
behemoth men’s wear retailer with nearly 2,000 stores.
While we await a public notice from Men’s Wearhouse regarding its
decision on the takeover proposal, the suitor, JoS. A. Bank,
carries a Zacks Rank #3 (Hold).
Other stocks performing well among apparel-shoe retailers include
Finish Line Inc. (FINL) and DSW
Inc. (DSW). Both these stocks carry a Zacks Rank #2
(Buy).
DSW INC CL-A (DSW): Free Stock Analysis Report
FINISH LINE-CLA (FINL): Free Stock Analysis Report
JOS A BANK CLTH (JOSB): Free Stock Analysis Report
MENS WEARHOUSE (MW): Free Stock Analysis Report
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