Jos. A. Bank Clothiers Earnings: Margins Shrink Again, Net Income Falls

Rising costs hurt Jos. A. Bank Clothiers Inc. (NASDAQ:JOSB) in the third quarter as profit dropped from a year earlier. Jos. A. Bank Clothiers is a designer, retailer and direct marketer of men’s tailored and casual clothing and accessories.

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Jos. A. Bank Clothiers Inc. Earnings Cheat Sheet

Results: Net income for Jos. A. Bank Clothiers Inc. fell to $13.3 million (47 cents per share) vs. $15 million (54 cents per share) a year earlier. This is a decline of 11.2% from the year-earlier quarter.

Revenue: Rose 11.1% to $232.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Jos. A. Bank Clothiers Inc. fell short of the mean analyst estimate of 55 cents per share. It beat the average revenue estimate of $208.9 million.

Quoting Management: “We are pleased that we were able to deliver comparable store sales growth and Direct Marketing segment sales growth during the third quarter of fiscal year 2012. However, we are disappointed that our net income declined versus the same period a year ago. We had a decline in our operating income margin due to additional markdowns and promotional activity which were needed to drive these sales. Also, Hurricane Sandy, which hit along the East Coast where the majority of our largest volume regions are located, negatively impacted third quarter sales, particularly when we ran a big promotion right at the end of the quarter,” stated R. Neal Black, President and CEO of JoS.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 5.6 percentage points to 57% from the year-earlier quarter. In that span, margins have contracted an average of 2.7 percentage points per quarter on a year-over-year basis.

Revenue has increased for four quarters in a row. Revenue increased 12.9% to $260.3 million in the second quarter. The figure rose 4.2% in the first quarter from the year earlier and climbed 8.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 83 cents versus a mean estimate of net income of 72 cents per share.

Net income has increased 2.4% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 19.3% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.84 a share to $1.82 over the last seven days. The average estimate for the fiscal year is $3.77 per share, falling from $3.79 thirty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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