AlphaNinja - In a turnaround, JoS. A. Bank Clothiers (JOSB) has increased its Fiscal 2010 expansion plans to 30-40 stores from the previous 10-15 planned openings.
They previously cited a lack of real estate opportunities as a reason for slowing store openings, from the 2008 10k:
Yet today they appear to be coming accross some opportunites, probably at great rates too. CEO R. Neal Black:
“Quality real estate opportunities are beginning to open in the marketplace and we are ready to expand our store base at a more rapid rate. We believe we are poised to take advantage of these opportunities as a result of our strong financial position. We have a proven ability to open 60 stores a year and these future store openings will put us back on the track we were on prior to the national economic crisis,” continued Mr. Black.
JOSB shares have trounced the general market over the past few years, and sometimes it's left me scratching my head, as the company is incredibly promotional. Their website for example:
In addition to sourcing 80% from outside the United States, a review of the company's design process sheds light - their focus on traditional cuts avoids the "fashion risk" that other designers face when trying to catch the next fad. It also keeps design costs much lower than that of the competition:
JOSB currently operates 467 stores, and is aiming for 600. Net income per store has risen from $91k in 2004 to $126k in 2008 and is still rising as the store base ages and becomes more profitable. At 600 stores I could see JOSB doing at least $100million in net income, or almost 5.50 per share versus 2009 expectations of 3.46. With the company's proven earnings stability, an 8% FCFY(Free Cash Flow Yield) would not be unreasonable, and adding back the large cash balance, this company's market value could double in the next few years.