C'mon, Men's Wearhouse
For the fourth quarter of fiscal 2003, the company increased sales 8.3% over the same period last year, and earned 10% more per share. For the full year, sales were up 7.5% to $1.4 billion, and earnings inflated 28% to $1.33 per share. Hey, maybe that's the hook. Earnings bumps of that magnitude are usually reserved for growth companies.
OK, there must be something exciting lurking in the details, right? Unfortunately (or fortunately, if you're a stockholder), everything here is good and boring, too. We might quibble with a slight 1% uptick in SG&A expenses, but then the 1.8% increase in gross margins more than made up for it. Over the past year, the firm has more than tripled its long-term debt, but it's tough to get worked up about that, since the balance sheets show more than enough cash to pay off the loans immediately.
There's no doubt that retail's seeing an upswing. Recent reports from specialty stores like Abercrombie & Fitch
Men's Wearhouse is executing well amid increasing sales. At $26 a stub, the company currently trades around 18 times forward guidance that assumes 23% growth. If recent performance is any indicator of future prospects, the stock looks like a reasonable buy.
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Like George Costanza and other comfort-loving misanthropes, Fool contributor Seth Jayson only wears sweatpants. He owns no stake in any companies mentioned here.