Jos. A. Bank Clothiers Inc. said Wednesday its first-quarter earnings slid 45 percent as store sales slowed, inventory costs rose and the men's apparel chain sold more items at clearance prices.
Earnings of 29 cents per share for the three months that ended May 4 fell within the company's forecast and met analysts' expectations. But shares fell nearly 3.9 percent Wednesday, closing at $42.96 on the Nasdaq.
Net income decreased to $8.1 million, or 29 cents per share, compared with $14.8 million, or 53 cents per share, in the first quarter of 2012, the Hampstead-based retailer said.
Earnings fell within the company's previously announced range of 27 to 30 cents per share.
The retailer controlled expenses and improved advertising efficiency during the quarter, but not enough to offset a drop in sales, primarily in April, CEO R. Neal Black said in a statement. Sales declined 2.6 percent to $196.1 million compared with $201.4 million in the first quarter of 2012, with sales at stores open at least a year down 8.5 percent.
"Our gross margin was down primarily due to higher inventory sourcing costs and lower average selling prices due mostly to an increased percentage of sales of winter and other clearance products," Black said.
Unseasonably cool weather also hurt sales and profit margins, he said.
But direct-to-consumer sales, which include Internet sales, performed well, growing in the double digits, the company said. Direct marketing sales rose 12.6 percent.
"The company continues to maintain a strong balance sheet, and despite the slow start to the new year, the first quarter of fiscal year 2013 was still profitable," Black said.
He noted that sales continued to be down in May.
The retailer, which operates 606 stores in 44 states and sells online and through catalogs, is evaluating and refining its merchandise mix and advertising promotions, Black said. To respond to customer demand, the stores have begun selling new casual assortments and expanded inventories of slim-fit suits.