Joey Bank Drops After Earnings Report

Shares of Jos. A. Bank Clothiers ($JOSB) are down sharply today after the company reported fiscal Q4 earnings of $1.78 per share. The stock has been down as much as 10% today. Despite the sharp drop in the stock, the earnings were inline with Wall Street’s forecast.

In the earnings report, the CEO warned:

The first quarter of 2012 has started out more slowly than we had planned with declines in both comparable store sales and Direct Marketing sales for the first 8 weeks of the quarter. The declines are primarily due to weaker than expected traffic and also due to the warmer winter weather which is resulting in significantly lower sales of outerwear and cold weather merchandise. We are making marketing changes to address the sales trend. We believe that these changes will be effective and appealing to our customers; however we remain cautious about the outcome of the first quarter of 2012.

The company just wrapped up a very strong year. Sales rose 14.2% to nearly $1 billion. The key metric for the industry is comparable store sales, and that rose by 7.6% last year. That’s very good. Net income increased by 13.6% to 97.5 million, and earnings-per-share rose from $3.08 to $3.49.

I’d urge shareholders not to be too worried about today’s sell-off. The stock often gets knocked around after earnings — good or bad — and eventually recovers. Last June, shares of JOSB dropped 13.3% after the company missed earnings by two cents per share. Yet by October, the stock had nearly made up all the lost ground. (The next two earnings reports beat by six cents and by two cents.)

I’m going to lower my buy price from $54 to $52 per share.

Posted by on March 28th, 2012 at 10:12 am

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