Retailer JoS. A. Bank Clothiers, Inc. (JOSB) Wednesday reported a sharp decline in first-quarter profit as net sales dropped amid higher sales of clearance products and an unseasonably cool weather. Yet, earnings met Wall Street estimates and net sales were slightly ahead of expectation.
The firm is a designer, manufacturer and retailer of men's tailored and casual clothing, sportswear, footwear and accessories. The company sells its full product line through 606 stores in 44 states and the District of Columbia.
Neal Black, CEO, said, ''...our gross profit margin was down primarily due to higher inventory sourcing costs and lower average selling prices due mostly to an increased percentage of sales of winter and other clearance products. Like many other retailers, we were also affected by the unseasonably cool weather which adversely impacted both our sales and gross profit margin.''
Net income plunged to $8.09 million from $14.83 million in the previous year. Earnings per share fell to $0.29 from $0.53. On average, 3 analysts polled by Thomson Reuters expected earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.
The company's forecast was for earnings in the range of $0.27 to $0.30 per share. The just concluded quarter ended on May 4, while the first quarter of fiscal year 2012 ended on April 28.
Net sales slid 2.6 percent to $196.06 million from $201.35 million in the prior year. Analysts expected revenues of $195.41 million.
Comparable store sales decreased 8.5 percent and Direct Marketing sales increased 12.6 percent. Combined comparable store and Internet sales decreased 6.4 percent compared to last year.
The company incurred higher cost of goods sold and increased operating expenses in the quarter.
Looking ahead, Black said sales trend has continued into the second quarter of fiscal year 2013 as sales are down for the fiscal month of May.
''For the remainder of 2013, we will continue to focus on our goal of returning to previous levels of gross margin rates and advertising productivity. As such, we will continue to test, evaluate and refine our merchandising and advertising offerings to optimize the appeal to our customers,'' Black added.
He noted that responding to customer demand, the company has introduced new and more focused casual assortments and additional slim-fit suit inventories.
JOSB settled at $44.70 on Tuesday.
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