US: JoS A Bank expects FY net income to be down 20%
US men's clothing retailer JoS A Bank has issued a profit warning, as rising sales failed to offset higher marketing expenses and lower gross margin.
The retailer now expects fiscal year 2012 net income to be 20% lower than in 2011.
"Total company sales for the year will be up, but not enough to offset higher marketing expenses and lower gross margin," said president and CEO Neal Black.
"We are disappointed that we were not able to drive the sales gains we had expected. The fourth quarter started out slowly, as the first two weeks of fiscal November were negatively impacted by the aftermath of Hurricane Sandy, the distractions created by the presidential election and the uncertainty of the fiscal cliff.
"Going into the critical holiday selling season, starting on Black Friday, we believed we had a strong marketing and promotional strategy for the period."
However, he said many of the promotional items and a large part of the retailer's holiday assortment were items that sell best in cold weather, whereas the weather was unseasonably warm.
"Historically, we have had strength with these types of items, but our customers (specifically at our stores) didn't respond as well to our promotional offers as they had in the past...even at very low prices on products such as sweaters, outerwear, hats, gloves, scarves, and jackets made of heavier fabrics such as camel's hair and cashmere."
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