HAMPSTEAD, MD-Margin-cutting incentives aimed at moving its inventory of winter clothing caused earnings to drop nearly $1 million during the first quarter at men’s clothing retailer Jos. A. Banks, execs with the company said.

For the quarter ending Feb. 3, earnings declined to $5.9 million, or 32 cents per share, down from $6.7 million, or 38 cents per share, a year earlier, breaking the company’s string of 18 quarters of consecutive growth.

Company officials called the drop “a bump in the road” and said the firm’s business fundamentals “remain strong” but Wall Street reacted sharply to the news, sending stocks plummeting 33%.

Jos. A. Banks chief financial officer David Ullman called the earnings decline “an aberration in our growth period,” saying the drop was due largely to increased customer demand for fall merchandise which resulted in less demand for the firm’s line of year-round clothing.”Looking back with 20-20 hindsight, we think we probably were a little too price aggressive on some of the fall goods,” R. Neal Black, the company’s chief merchandising officer said.

Sales for the quarter were up 17.7% or $113.7 million as compared to $96.6 million in the prior year’s quarter while sales at stores open at least a year increased 4.7% during that same period. Catalog and internet sales were also up 25%, the company said.Also affecting the bottom line were costs associated with the opening of seven new Jos. A. Banks stores in seven states.

The company, which operates 334 stores nationwide, added five new markets to its mix during that expansion. The firm plans three new store openings in the second quarter, including its second airport location at Regan International Airport in Washington, DC. At least 50 stores are expected to be added to the company’s lineup this year with an additional 50 coming on line in 2007, the company said.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.