HAMPSTEAD, Md. (AP) — JoS. A. Bank's fiscal third-quarter net income dropped 11 percent as the company increased discounts and Superstorm Sandy hurt sales.
The men's clothing retailer says it is cautious about the current quarter, which includes the holiday shopping season, and shares tumbled $3.66, or 7.7 percent, to $43.62 immediately after markets opened.
JoS. A. Bank is based in Hampstead, Md., and has a significant presence on the East Coast. It said that Sandy hit just as it ran a big promotion at the end of the August-October quarter.
Throughout the quarter, revenue from established stores, a key measure for retailers, rose 4.8 percent. But stores needed markdowns and promotions to drive sales, hurting profitability.
And that measure dropped in November, raising concerns about the current quarter, which ends in January and includes the critical holiday shopping season. Retailers can make as much as 40 percent of their annual revenue in the weeks leading up to Christmas.
JoS. A. Bank Clothiers Inc. earned $13.3 million, or 47 cents per share, in the three months that ended Oct. 27. That compares with earnings of nearly $15 million, or 54 cents per share, in last year's quarter.
Revenue rose 11 percent to $232.9 million, helped by a 26 percent rise in sales from catalogs and the company's website.
Analysts surveyed by FactSet expected, on average, earnings of 55 cents per share on $231.3 million in revenue.
The company's cost of goods sold climbed 28 percent to $100.2 million. Operating expenses also rose 4 percent to $111.5 million.
JoS. A. Bank sells men's tailored and casual clothing, sportswear and footwear through 599 stores, its website and a catalog.