NEW YORK (AP) -- Jos. A. Bank cautioned that 2012 net income will come in well below its prior-year results after its holiday promotions failed to resonate with shoppers. The warning not only pulled the chain's stock to its lowest level in more than two years on Monday, it also dragged down others in the sector.
Jos. A. Bank Clothiers Inc. President and CEO Neal Black said Friday that many of the company's promotional items were geared toward colder temperatures and unseasonably warm weather hurt sales. He noted that the company has historically done well selling those items, but shoppers did not respond as strongly to them as in the past.
Black said sales of sweaters, hats, gloves, scarves and jackets made of heavier fabrics like camel's hair and cashmere were soft — even though they were priced low.
Edward Yruma of KeyBanc Capital Markets said in a client note that when companies like Jos. A. Bank and Ascena Retail Group — which almost always offers 40 percent off at its Justice division — rerun promotions they seem to lose impact with customers.
"We now believe that innovation in promotional strategy could be a key secular theme for 2013," Yruma wrote.
Shares of Jos. A. Bank fell $8.60, or 18.6 percent, to $37.67 in midday trading. Earlier in the session, the stock dropped to $37.31, its lowest level since March 2010.
Elsewhere in the sector Men's Wearhouse Inc. lost $2.35, or 7.1 percent, to $30.81. Casual Male Retail Group Inc. fell 5 cents to $4.48.