When I think of the Jos. A. Bank (JOSB), I think of Yogi Berra’s saying “Nobody goes there because it is too crowded.” Only in the case of JOSB, it sounds like this: “EVERYBODY goes there because it is NOT crowded.” As most men who shop there will attest, you are lucky to see and […]
Reader asked me a question about Joseph A. Bank’s profit margins, as a follow up to my early JOSB analysis. Vitaliy,Thanks for your thoughts on Jos. A. Banks (JOSB). In you book, Active Value Investing, you speak about the reversion to the mean in net profit margins. JOSB’s net profit margins have grown from under […]
I tell you, every time I talk to someone who has shopped at Jos. A. Bank (and had a great experience by the way), has seen company’s commercial on TV, or simply read the company’s quarterly earnings report (key word here is earnings, not losses), I have to pinch myself to remind myself that the […]
Here is a link (opens PDF) to a 9 page analysis I did of American Express (AXP). Warning: it is a bit dry. I was going to present American Express at Value Investing Congress in Pasadena, but the stock ran up and exhausted a good portion of margin of safety. Amex is one of […]
I was interviewed by Kiplinger about Jos. A. Bank (JOSB), my favorite retail stock I presented (download PDF of my presentation) at Value Investing Congress in Pasadena. This is probably the most contrarian stock I ever owned – 93% of the float is short.
Jos A. Bank (JOSB) reported decent numbers yesterday: sales grew 10%. It’s not a blow out number but a respectable number for this environment. Profit margins have expanded as corporate expenses are leveraged across a larger store base, driving earnings growth to 27%.
The Joseph A. Banks (JOSB) selling machine is kicking on all cylinders – yesterday’s quarterly numbers were proof of that (see article I wrote for Market Watch).
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.
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%.