JoS. A. Bank Clothiers, Inc. (JOSB) has been defying the retail doom and gloom as sales climbed 9.8% year over year in the fiscal second quarter. Analysts expect 5-year sales growth of 16.8%. JOSB has a PEG ratio of just 0.90.

Company Description

JoS. A. Bank sells men’s suits, tuxedos, casual clothing, footwear and accessories through 467 stores in 42 states and the District of Columbia and through its web site, The company has a 100% money back guarantee on its products.

JoS. A. Bank Surprised on Estimates Again

On Sep 2, JoS. A. Bank continued with its hot streak of surprising on the Zacks Consensus Estimate as earnings per share for the second quarter of fiscal 2009 beat the Zacks Consensus Estimate by 25.93%. EPS rose 42% to 68 cents from 48 cents a year ago. Analysts expected just 54 cents.

The company has experienced earnings growth in 31 of the last 32 quarters when compared to the prior year periods, including 13 quarters in a row.

Unlike a lot of other retailers, sales actually grew year over year by 9.8% to $167.7 million from $152.7 million. Comparable store sales rose 6.2%. The company did see some weakness in its direct marketing segment, which saw sales drop 6.7%.

JoS. A. Bank will be accelerating its plans to open new stores. In fiscal 2009, the company’s plans to open new stores got more conservative due to the economic conditions in the retail sector. Only 10 to 15 new stores are planned for fiscal 2009.

However, in fiscal 2010, the company announced it expects to open 30 to 40 new stores as part of its long term plan to have 600 stores.

Zacks Consensus Estimates Jump

Given the larger than expected earnings surprise, covering analysts have been scrambling to raise the third quarter and full year Zacks Consensus Estimates.

In the last week, 3 out of 5 covering analysts raised for the third quarter by 5 cents to 55 cents per share.

The full-year Zacks Consensus Estimate rose by 14 cents, the amount of the earnings surprise, to $3.58 per share in the last 7 days with 4 out of 6 covering analysts raising estimates in that time period.

Analysts expect year over year fiscal 2009 earnings growth of 12.83%.

Value Fundamentals

JoS. A. Bank is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 13.15 and a price-to-book ratio of 2.49. The company has a stellar 5-year average return on equity (ROE) of 22.37%.

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