Posted by: Ben Steverman on September 2, 2009
Jos. A. Bank Clothiers (JOSB) is the poster child for a retailing strategy that really seems to work these days: Sales, discounts and more sales.
Visit a Jos. A. Bank store these days and you will see signs trumpeting “1/2 Off” sales on the retailers’ suits and other menswear. Those signs are working.
The firm announced Sept. 2 that earnings per share last quarter rose 42% from a year before. Despite all the discounting, total sales rose 9.8% from a year ago (to $167.7 million) and same-store sales rose 6.2%. The chain is growing, planning to open 30 to 40 new stores next fiscal year.
The earnings blew away Wall Street estimates by 14 cents per share. Stifel Nicolaus (SF) analyst Richard Jaffe wrote Sept. 2:
[That] beat can be attributed to continued strong consumer response to the company’s aggressive, price-driven promotions as well as better than anticipated cost control and merchandise margin management.
These are tough times for most other specialty stores, especially those less willing to offer deep discounts. Consider that on Aug. 14 Abercrombie & Fitch (ANF) revealed that its same-store sales were off 30% last quarter.
In the past 12 months, shares of Abercrombie & Fitch are down 42%. In that time, Jos. A. Bank’s stock has risen 73%, including a 4.6% jump on Sept. 2.
In a conference call with analysts on Sept. 3, Jos. A. Bank execs will get a chance to explain the retailers’ success. And whether it can continue the tough task of offering big sales while boosting profits at the same time.