The men's apparel chain opened 16 new units during the first half of this year, and "third quarter will be the busiest new store opening period of the year," said Robert Wildrick, CEO, during a second-quarter conference call. He said of the 50 new units planned for 2006, between 20 and 25 will open in Q3. California, Texas and Arizona are among the locally based retailer's targets.
During second quarter, net sales were up nearly 13% to $134.3 million. Second-quarter net income reached $8.2 million, up from $7 million for the prior-year quarter. For the six months ended Aug. 4, 2007, net income rose 29% to $16.6 million, compared with $12.8 million for the six fiscal months ended July 29, 2006.
Acknowledging "uncertainty among consumers now," Wildrick said, "the economic situation effects retail. The strong usually get stronger and the weak usually get weaker." He credited JoS. A. Bank's success to "high quality product at very reasonable prices" and a "high amount of basic merchandise."
Sales during the first half were "balanced," said Neal Black, president and chief merchandising officer, during the call. Suits led with a 15% increase. "Substantially all categories showed a double-digit increase," Black added, citing sportswear as another good performer. Direct marketing sales, especially internet sales, showed a 20% increase for both the opening half-year and second quarter, led by suits.
Among the company's advantages, Wildrick also said, "we have the financial ability to stay the course and execute our plans." He said the goal of 600 units by 2012 represented "organic growth" and did not include acquisitions, which might occur. The expansion, he added, "can be done with cash resources –no significant borrowing and no additional issuances of stock."
All of this year's new units are located in open-air centers. "There may be some real estate advantage," Wildrick said, "as some restaurant retailers curtail growth plans, giving us rent negotiation advantages."
Beginning in fiscal 2008, the company will provide actual sales results each quarter, and may or may not provide updates during a quarter, said David Ullman, EVP and CFO. "We manage our business, including the merchandise trends and store results, with a long-term perspective, and our merchandise assortments are typically set in two seasons each year.
"As such," Ullman continued, "short-term fluctuations in sales do not necessarily reflect the overall performance of the business. We have decided to communicate our sales in a manner that is more aligned to our business cycles." The switch from monthly to quarterly financial reporting has become a trend among many retailers, particularly fashion retailers.
The company's second-quarter results beat Wall Street analysts' expectations. Shares of JOSB on the Nasdaq closed on Sept. 12, following the conference call, at $30.82 a share, up nearly 5.8% for the day on which the Nasdaq composite lost ground. This compares with a JOSB 52-week high of $46.16 a share and a 52-week low of $25.65 a share.
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