Retail

JoS. A. Bank Expanding Further (JOSB)

JoS. A. Bank Clothiers, Inc. (NASDAQ: JOSB) is one of the more unique clothing and apparel stocks out there.  The company has managed to grow revenues in recent years, and despite the economy it is expected to grow revenues for each of the next two years if the analysts are correct in their projections.  But this is a short sellers battleground stock and may have created more interest today now that it announced an expansion to its growth plans.

It seems that real estate opportunities are plentiful  now that so much new construction has been put up and now there are so many more vacancies. The company plans to open 30 to 40 new stores during fiscal 2010, which is an increase over the 10 to 15 new stores it plans to open in fiscal year 2009.  It has opened over 350 of its 467 stores in the past ten years and the company’s longer-term target is to open at least 130 additional stores as part of its lplan to operate 600 stores.

Thomson Reuters has estimates pegged at $752.25 million for this year (Jan-2010) and $797.1 million for next year (Jan-2011).  Revenues were $695.9 million in 2008 (Jan-2009) and $604.01 million the year before.

Jos. A. Bank also has plenty of capital.  It had $111.98 million in cash at its last balance sheet report date in May.  But this stock is also no stranger to short sellers as a controversial stock.  At the end of July, JOSB had a short interest of 5.026 million shares, which comes to 10.9-days to cover.  That is not the highest short interest listed but that was the highest days-to-cover ratio at 10.95 days since the March 31 reading.

And certainly you have seen the company’s commercials…. JoS. A. Bank ‘sales’ are advertised almost every single day, regardless of the economy, and regardless of whether it is a holiday.  This expansion will probably bring even more sales announcements.

After a 4.5% gain today to $40.87, this is still about 20% short of its 52-week highs over $50.00 and the market cap is almost $750 million.

Jon C. Ogg
August 25, 2009