JoS. A. Bank stays positive following disappointing second quarter results

HAMPSTEAD, Md. — Although JoS. A. Bank saw decreases across the board for its second quarter, president and CEO R. Neal Black focused on the momentum the company seems to have picked up during August.

"For the start of the third quarter, our total sales, comparable store sales and direct sales have all increased during the fiscal month of August 2013 as compared to the same period of 2012, so the third quarter is off to a good start, but it is still early in the quarter,” said Black. “The August 2013 sales increase comes on top of a double-digit sales increase in August 2012. With the gross margin trend turning up in the second quarter and the sales trend turning up in August, our declines may have bottomed out. We are highly focused on improving our sales trend, and further improving both our gross profit margin rate and our marketing efficiency over the remainder of fiscal year 2013, with the overall goal of returning to previous years' levels. We will continue to modify and implement new marketing events and the related media placement to maintain efficiency and to drive sales. We will begin to annualize our declining sales and gross margin trends during the third quarter and for all of the fourth quarter, which means our opportunity for improvement is significant during those periods."

Total sales for the quarter of decreased 10.7% to $232.5 million from $260.3 million in the prior-year period. Comparable store sales decreased 15.9% and direct marketing sales decreased 1.9% compared with the prior-year period. Combined comparable-store and Internet sales for the quarter decreased 15.5% compared to the prior-year period.

While the company’s total sales declined in the quarter, it achieved stability in its gross profit margin rate. Specifically, the gross profit margin rate increased in June and July, and the overall rate for the quarter increased approximately 40 basis points from last year.

Customers did not respond as well to some of the company’s highly promotional marketing campaigns as they did in the prior year, causing the sales decline in the quarter. At the same time, day-to-day sales on the non-promotional portion of its business in stores increased during the quarter.

JoS. A. Bank operates 617 stores in 44 states and the District of Columbia, a nationwide catalog and an e-commerce site.