Jos. A. Bank Clothiers Inc., (Nasdaq: JOSB) now the acquisition target of rival Men's Wearhouse (NYSE: MW), said its third quarter earnings climbed 2 percent as sales increased both in stores and online.
The men's retailer reported net income of $13.62 million, or $0.49 per share, up from the $13.31 million or $0.47 per share for the third quarter last year. Net sales for the quarter rose to $247.47 million, compared to $232.85 million in the year-ago period, beating Wall Street estimates of $244.99 million.
"Our performance in the third quarter is a strong indication that we are taking the right actions to improve both our top and bottom lines," said Jos. A. Bank CEO R. Neal Black in the earnings statement. "In particular, the customer is responding well to the changes we are making in the promotional side of our business and our non-promotional business continues to grow strongly."
Direct marketing sales were a key driver for Jos. A. Bank, with 23.5 percent growth during the quarter. Combined comparable store and Internet sales for the third quarter also saw a 2.4 percent rise compared to last year.
In addition to the earnings report, the Hampstead-based retailer said it is reviewing Men's Wearhouse's $1.2 billion offer.
"Work is underway, but I cannot give you a timeline of when that work will be completed enough to give a thoughtful response," Black told investors during a conference call following the earnings statement. He added that the board will act "expeditiously to deliver value for shareholders, but not at the expense of distracting our management team" during the crucial holiday shopping season.
The acquisition news came two months ago when Jos. A. Bank offered to buy Men's Wearhouse for $2.3 billion, which was rejected by that larger peer. On Nov. 15, Jos. A. Bank withdrew the proposal after the board of Men's Wearhouse failed to engage in good faith negotiations by Nov. 14. Then, in a surprising turn of events, on Nov. 26, Men's Wearhouse floated an offer to acquire Jos. A. Bank for an all-cash deal worth about $1.2 billion.
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