JoS. A. Bank Sees Year-over-Year Growth In Q3 Earnings - Update

(RTTNews) - Retailer JoS. A. Bank Clothiers, Inc. (JOSB) Tuesday said it expects an increase in earnings for the third quarter from last year, excluding expense of legal and other professional services related to its acquisition proposal for Men's Wearhouse, Inc. (MW). The firm also expects to report a slight increase in gross profit margin rate in the third quarter, which would represent the second consecutive quarterly increase.

Earlier last month, JoS. A. Bank made a non-binding proposal to acquire all of the outstanding shares of Men's Wearhouse. Meanwhile, Men's Wearhouse board of directors determined to reject the proposal to acquire the company for $48 per share in cash, representing a total equity value of about $2.3 billion.

The board rejected the proposal as it significantly undervalues the company and its strong prospects for continued growth and value creation.

Last month end, Jos. A. Bank sent a letter to the CEO of Men's Wearhouse, expressing its willingness to consider raising the acquisition price it proposed on September 18, 2013.

For the third quarter, the company expects earnings of about $0.49 to $0.51 per share, excluding the expenses of around $0.02 to $0.03 per share.

The company noted that adjusted earnings per share would represent a gain of about 4 to 9 percent over the $0.47 per share reported in the same quarter last year.

Two analysts polled by Thomson Reuters expect the company to report earnings of $0.43 per share for the third-quarter. Analysts' estimates typically exclude special items.

The company anticipates earnings to be about $0.47 to $0.49 per share, including the transaction-related expenses.

It sees total sales to be up in the mid single digits, comparable store sales to be roughly flat, and sales in direct business to be up in the double digits.

The projected performance in the third quarter, which was somewhat affected by the government shutdown, marked a continuation of the positive trends it had seen at the end of the second quarter, JoS. A. Bank said.

"We believe we are realizing the benefits of the implementation of our new promotional marketing strategies, which we have been adjusting in recent quarters...Additionally, the non-promotional portion of our business continues to perform well, with ongoing increases in sales," said Neal Black, president and CEO of JoS. A. Bank.

The firm is scheduled to announce its third quarter financial results on December 5.

JOSB closed Monday's regular trading at $48.56 on the Nasdaq.