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JOSB

Desperate Times Require Desperate Measures for Jos. A. Bank

in Stock Analysis by
buy-1-get-7-free

In one of my better articles last year, I had the audacity to compare men’s retailer Jos. A. Bank to the all-mighty Federal Reserve. I argued that Jos. A. Bank is addicted to what was supposed to be a temporary advertising campaign — buy one suit, get (insert always-increasing number here) suits free. The Fed,…

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Jos. A. Bank: You Betcha!

in Stock Analysis by
contrarianedge-featured

Jos. A. Bank (Nasdaq: JOSB) has reported its second-quarter numbers, and they aren’t good — they’re great!

To start with, sales were up 20.8%, and gross and operating margins improved, mainly driven by maturation of the company’s fairly new store base. But the Jos. A. Bank story is not about growth — it always had plenty of that. It is about inventories, and they were the bright, shining star of this quarter. Specifically, inventories increased only 11.7% over the second quarter last year. So why is that great news?

To answer that question, it’s necessary to understand the issues surrounding Jos. A. Bank. First, it has double the inventory days (a measure of how long it takes to convert inventory into sales) of its closest competitor, Men’s Wearhouse (NYSE: MW), and second, it had a terrible first quarter due to too much seasonal inventory. I have written two long articles on the first issue, so let me address the second issue here.

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Jos. A Bank Is a Patient Joe

in Stock Analysis by
contrarianedge-featured

Investing isn’t for the faint of heart. A Foolish investor must be strong enough to change his or her mind when a stock’s underlying facts change — or hang on tight, even in the face of a share-price decline, when they don’t. I wrote a very favorable article about Jos. A. Bank (Nasdaq: JOSB) about a month ago, and I wouldn’t change a single line in that article, despite news that the retailer’s same-store sales for August fell 6.1%.

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