Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- JOSB has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, JOSB has a quick ratio of 2.45, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for JOS A BANK CLOTHIERS INC is rather high; currently it is at 64.06%. Regardless of JOSB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JOSB's net profit margin of -17.08% significantly underperformed when compared to the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Specialty Retail industry and the overall market, JOS A BANK CLOTHIERS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$101.00 million or 100.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Jos. A. Bank Clothiers, Inc. operates as designer, manufacturer, retailer, and direct marketer of men's tailored and casual clothing, and accessories in the United States. Jos A Bank Clothiers has a market cap of $1.82 billion and is part of the services sector and retail industry. Shares are up 18.6% year to date as of the close of trading on Wednesday.
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