Bear of the Day: Jos. A. Bank (JOSB) - Bear of the Day
20 Marzo 2013 - 7:00AM
Zacks
What happens when the promotions you've run for years stop working?
JoS. A. Bank Clothiers, Inc. (JOSB) warned in January that
fiscal 2012 net income would be 20% less than the year before and
blamed, in part, poor promotions. Fiscal 2013 estimates have been
cut which has pushed the stock to a Zacks Rank #5 (Strong Sell).
JoS. A. Bank is best known for its infamous "Buy 1
suit get 7 suits free" promotion which leave you asking "how DOES
it make money off of that?" The men's retailer has run catchy
promotions for years but now it seems to be catching up with the
company.
On Jan 25, in an earnings warning, the company said
its holiday promotions didn't work as well. It stated,
"historically, we have had strength with these types of items, but
our customers (specifically at our stores) didn't respond as well
to our promotional offers as they had in the past."
After awhile, the consumer seems to become immune
to the discounts. 30% off used to be good and then stores had to
use 40% off. Recently it seems only 50% will make them open their
wallets. When a retailer has to keep upping the ante with greater
and greater discounts, it's not a good sign.
2013 Estimates Tumble
JoS. A. Bank has actually yet to report fiscal
fourth quarter 2012 results or to comment further on its earnings
warning that it gave nearly 2 months ago. It's scheduled to report
results on Mar 27. Its track record of beating the Zacks Consensus
isn't good. It has missed 3 out of the last 4 times.
Obviously, the analysts have been lowering
estimates ahead of the report due to the earnings warning. The
fourth quarter estimate has dropped to $1.35 from $1.76 in the last
60 days.
Earnings are now expected to fall 4.5% in fiscal
2012. For now, coming off a poor 2012, analysts still see 10%
earnings growth in fiscal 2013. But analysts have been lowering
2013's estimates since the earnings warning as well.
No Rally For Shares In 2013
Unlike most of the stock market, shares of JoS. A.
Bank haven't participated in the 2013 rally. They were crushed by
the earnings warning and have struggled to do much since.
Investors are staying away from this one ahead of
the earnings report.
![](http://staticzacks.net/images/zacks/blogs/1363728216_scaled_425.jpg)
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades
are about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called Zacks
Confidential.
Learn More>>
Tracey Ryniec is the Value Stock Strategist for Zacks.com.
She is also the Editor of the Turnaround Trader and Value Investor
services. You can follow her on twitter at @TraceyRyniec.
JOS A BANK CLTH (JOSB): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni Jos. A. Bank Clothiers (NASDAQ:JOSB)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Jos. A. Bank Clothiers (NASDAQ:JOSB)
Storico
Da Lug 2023 a Lug 2024