Jos. A. Bank Clothiers Stock Has 'Room to Grow'

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The recent increase in the stock price of Jos. A. Bank Clothiers Inc., Hampstead, MD, may not be over just yet.


"I could see it going to the $40 range within the next year, and beyond that over the long term," said Preston Silvey, an analyst with brokerage firm First Dallas Securities, Dallas. "[The] stock price still has room to grow."


That would bring more good news to investors already rewarded for their faith in the retailer and direct marketer of men's tailored and casual clothing and accessories.


The stock price stood at $30.70 on Feb. 24 and reached $36.28 on March 30, an 18 percent increase.


Helping drive the upswing was the March 4 announcement before the opening of the market that the company's total sales for the fiscal month ended Feb. 28 rose 55.8 percent to $24 million from $15.4 million in the prior-year period, and that comparable-store sales increased 34.2 percent versus February 2003. Combined catalog and Internet sales climbed 34.7 percent.


Following the March 3 closing price of $33.95, the stock opened March 4 at $35.85 and closed that day at $37.16.


"The catalog effort has been effective, [and] they will continue to prospect this year in their catalog operation," Silvey said. "They are going to expand catalog circulation by more than 10 percent in calendar year '04. They are prospecting more to new customers and getting into additional markets. They might increase circulation in California and Florida and newer markets as well."


The company said March 29 that net income for the year ended Jan. 31 skyrocketed 52 percent to $16.6 million compared with fiscal year 2002.


Record sales were posted for the fourth quarter and fiscal year ended Jan. 31, with the quarter's sales rising 30 percent to $100.9 million from $77.9 million in the year-ago period. Total sales for the year jumped 23 percent to $299.7 million from $243.4 million for fiscal year 2002. Comparable-store sales were up 10.7 percent in the quarter and 8.2 percent in fiscal year 2003, while combined catalog and Internet sales improved 15.6 percent and 16.8 percent, respectively, in the quarter and fiscal year.


The retail side includes a growth model projected well into the future.


"They are expanding their store base quite aggressively," Silvey said. "And they are attractive to landlords since a lot of strip centers have mostly women's retail concepts. They want to get the male concept to draw men to the strip center. They are the only men's retailer growing significantly."


The company said last month that it's on target to open 50 to 75 stores this year. Jos. A. Bank currently has more than 200 stores.


"They've indicated that they want to have 500 stores three or four years down the line, and I could see that by fiscal '07 or '08," he said. "The West Coast is the territory they should expand into. California has consistently led in terms of catalog and Internet sales for the company, and they didn't have stores there up until this past year.


"The reason the stock has gone up is the store growth and the earnings increases. They continue to show strong earnings increases, and also there have been a few more investors in the stock recently."


In other news, Fair Isaac & Co. was adjusted for a 3 for 2 split, and Donnelley & Sons changed its ticker symbol from DNY to RRD.


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