Monday, January 09, 2006

Jos B Bank Clothiers (JOSB) Analysis

Jos. A. Bank Clothiers, Inc. is a nationwide retailer of classic men’s clothing through conventional retail stores and catalog and Internet direct marketing. JOSB was mentioned by the fools ( ) as one of the companies worth looking into in 2006.

In the most recent quarter ending in October 30th, JOSB had a net profit margin of 7.48%. This improved from a net profit margin of 6.22% from the year ago quarter. The sales in the most recent quarter increased by 27.84% compared to the year ago quarter. The general and administrative costs rose higher than revenue but sales and marketing costs rose slower than revenue growth. New store opening costs declined thus helping to increase the net profit margin. On the negative side, total stock holders equity increased by 18% from the year ago period.

Looking at the investor relation site of the company ( - the analyst estimates for 2005 earnings are 2.20/share, for 2006 2.63 per/share and for 2007 it is 3.05/share. The estimates for 2007 are not solid as only one analyst is covering it at the moment. The company has about 300 stores nationwide currently and has plans to expand to about 500 stores by 2007. The company's same store profitability is increasing and the company's customers are high income households with incomes north of 100,000 dollars/year. The current P/E of the stock is around 23 slightly above the expected growth rate for the next couple of years. Given that the U.S economy is expected to do well in the next couple of years, this stock should do well.

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