Jos. A Bank/Men's Wearhouse Deal Falls Apart and V.F. Corp Falls on Earnings

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Stocks finished off a strong week in characteristic fashion as the Dow Jones Industrial Average (DJINDICES: ^DJI  )  jumped 126 points, or 0.8%, today, closing at 16,154, just a few percentage points shy of its all-time record. What was once a feared market correction just a week ago seems to have been nothing more than a blip as the optimism of 2013 has returned, and emerging-market concerns have been quelled. Investors have also decided that much of the recent poor economic reports were because of bad winter weather. 

That bad news continued this morning as the Federal Reserve said factory production fell 0.8% in January, its steepest drop since May 2009. The Fed seemed to also pinpoint the inclement weather as the culprit, saying, "Severe weather curtailed production in some parts of the country." Not all of today's reports were negative, however, as the University of Michigan said consumer sentiment held steady at 81.2, a point off economist estimates. Consumer expectations improved modestly, indicating that Americans continue to believe the economy is improving despite the recent poor jobs growth.

Following yesterday's merger news of the Comcast-Time Warner combination, today featured a bit of a merger love triangle, as Jos. A. Bank  (NASDAQ: JOSB  ) , which had made an offer on Men's Wearhouse  (NYSE: MW  ) a few months ago only to have Men's Wearhouse make a counteroffer, rejected that offer and acquired Eddie Bauer instead. Jos. A. Bank picked up the privately owned sportswear company for $825 million in a move designed to thwart continued buyout offers from Men's Wearhouse, as that purchase will give Jos. A. Bank a higher price tag if Men's Wearhouse continues to pursue it. Men's Wearhouse's most recent offer was $57.50/ share for Jos. A. Bank, less than a 5% premium above today's closing price. This means a deal seems pretty much hopeless at this point. Men's Wearhouse shares finished down 5.4%, while Jos. A. Bank was down 0.1%, as the acquisition struck many industry observers as odd.

Staying in the fashion industry, Timberland-parent V.F. Corporation  (NYSE: VFC  ) fell 5% after a lackluster earnings report. The outdoor apparel company posted earnings of $0.82, short of estimates at $0.84, while revenues increased 8.5%, to $3.26 billion, also missing estimates at $3.36 billion. The 2014 EPS guidance of $3.00-$3.05 was below the consensus at $3.10; but there were bright spots in the report as gross margin improved 80 basis points. CEO Eric Wiseman had only positive remarks to give, calling 2013 a "teriffic year." Its winter products, including North Face, performed well in the quarter with sales increasing 12%. While investors never like to see results come in below estimates, V.F. has a host of well-loved brands, and I see no long-term weakness in today's report. 

No-brainer stocks
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report, "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2840982, ~/Articles/ArticleHandler.aspx, 8/28/2015 8:26:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

Today's Market

updated Moments ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^DJI $16643.01 Down -11.76 -0.07%
JOSB $0.00 Down +0.00 +0.00%
Jos. A. Bank Cloth… CAPS Rating: ***
MW $56.60 Down -0.30 -0.53%
The Men's Wearhous… CAPS Rating: **
VFC $73.08 Down -0.23 -0.31%
VF Corp CAPS Rating: *****