Being Foolish often means playing "Opposites Day" with the established wisdom. Take, for example, our previews of corporate earnings reports, which we playfully call "Foolish Forecasts" -- the joke here being that these are often not "forecasts" at all; we know we can't predict the future, so we don't even try. Rather, our Forecast series usually aims for the opposite -- but more achievable -- goals of recapping recent developments and giving a few pointers on what kinds of numbers to look at closely in the upcoming earnings news.

But every so often, I like to go out on an especially sturdy-looking limb.

Last week, I did so when previewingJos. A. Bank's (NASDAQ:JOSB) Q3 2006 earnings report. Examining how the company's November performance was looking so very much stronger than its performance earlier in the year, and in particular how the growth in its high-margin non-bricks-and-mortar ("NBAM") catalog and Internet business was outpacing physical store-sales, I posited that Joe was likely to surprise Wall Street with stronger-than-expected earnings in Tuesday's news.

Thanks, Joe
Luckily for my credibility, Joe did just that. Whereas Wall Street had predicted $119.5 million in Q3 sales and $0.29 per share in profits, Joe turned in the predicted amount of revenues -- but the expanding profit margins mentioned above helped the clothier to report $0.30 per share in profits.

More interesting than the quarterly numbers, per se, is what they tell us about long-term trends at Joe's stores -- specifically, where the growth is coming from, and more specifically, that most of it is coming from new stores, as the company continues to expand its footprint.

What's that? You say that according to the earnings report, the growth is clearly coming from NBAM sales that were up 21.4% year over year? Well, I admit, that's what the numbers suggest in the earnings report. But to get a clearer picture of what's happening, you need to dig a little deeper, and read the company's 10-Q filing with the SEC. There, on page 11, lies the true story in black and white:

  • In comparison with Q3 2005, Q3 2006 sales grew by $13.9 million.
  • $2 million, or 14% of the growth, came from NBAM.
  • $12 million, or 86% of the growth, came from stores.

The data tells this Fool that the true secret to Joe's success is building more stores to sell me stuff. Simple as that.

Want to get to know Joe a little better? Here are a few links that can help:

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Fool contributor Rich Smith does not own shares of any company named above.