Documente Academic
Documente Profesional
Documente Cultură
com
Wednesday,
February
15,
2012
TDL
Research
info@davianletter.com
An
examination
of
Jos.
A.
Bank
Clothiers,
Inc.s
(JOSB)
10-Q
report
for
the
quarter
ended
April
30,
2011
and
we
found
multiple
inventory
related
disclosures
that
seem
to
directly
contradict
each
other.
For
example,
on
page
13
of
the
10-Q
report,
the
company
disclosed:
120
basis
point
increase
in
gross
profit
margins
mainly
as
a
result
of
higher
initial
mark-ups
driven
primarily
by
retail
price
increases
in
certain
product
categories
and
improved
sourcing;
What
does
the
company
mean
by
improved
sourcing?
The
rational
conclusion,
when
discussed
in
the
context
of
profit
margins,
is
that
they
were
able
to
get
a
better
deal.
Seems
simple
enough,
except
JOSB
also
stated
on
page
18
of
the
same
10-Q
report:
Cash
used
in
our
operating
activities
of
$12.9
million
in
the
first
quarter
of
fiscal
year
2011
was
primarily
impacted
by
an
increase
in
operating
working
capital
and
other
operating
items
of
$38.0
million,
partially
offset
by
net
income
of
$17.8
million
and
depreciation
and
amortization
of
$6.2
million.
The
increase
in
operating
working
capital
and
other
operating
items
included
the
following:
an
increase
in
inventory
of
$28.6
million
primarily
as
a
result
of
the
replenishment
of
units
sold
in
fiscal
2010,
new
store
openings,
continued
sales
growth
and
higher
inventory
sourcing
costs;
On
page
13
of
the
10-Q
report,
the
company
claimed
that
its
gross
profits
improved,
in
part,
because
of
improved
sourcing
.
However,
on
page
18
of
the
same
10-Q
report,
the
company
seems
to
contradict
itself
by
claiming
that
it
had
higher
inventory
sourcing
costs
which
should
decrease
gross
profits.
Jos.
A.
Bank
needs
to
clarify
its
disclosures
to
avoid
confusing
investors
and
alleviate
concerns
about
its
financial
reporting.
It
should
answer
the
following
question:
Are
the
referenced
sourcing
costs
are
the
same
or
different?
How
can
I
tell
as
they
both
seem
to
impact
accounting
items
with
similar
if
not
the
same
effect?
With
their
10-K
report
due
soon,
Jos
A
Bank
should
clarify
its
inventory
disclosures,
and
alleviate
potential
concerns.
In Focus:
Inventory
accounting
disclosures
do
not
add
up?