Looking sharp never hurt a marriage proposal.
That’s exactly what Jos. A. Bank (JOSB) is doing this morning with only two days left before its proposed $2.3 billion bid for Men’s Wearhouse (MW) expires. The company is shooting its corporate cuffs, straightening its tie and subtly mentioning that its financial house is very much in order.
In short, Jos. A. Bank is asking Men’s Wearhouse: “Are you sure you want to turn this down?”
The company increased its earnings estimate slightly for the current quarter. It now expects to report a profit gain of 4 percent to 9 percent over the year-earlier period, when it realized a 6 percent margin and made $13.3 million. In sales, the company expects a mid-single digits percent gain.
Business, apparently, has been brisk. Though Jos. A. Bank was somewhat affected by the government shutdown, it has a new promotional marketing strategy that is paying off handsomely. It is also doing a pretty decent job on the e-commerce front.
Men’s Wearhouse, meanwhile, has spurned Jos. A. Bank at every step and cooked up a poison pill to retain power. Most recently, it brushed off a request to look at its books, saying the Jos. A. Bank bid was far too low. Today’s update from Bank might be a convenient prod to reconsider. After all, its forecast only changed slightly; Jos. A. Bank could have easily left it unsaid and delighted investors when it next releases quarterly figures in early December.
Jos. A. Bank is also sending an important message to shareholders. In burnishing its forecast it is assuring that it expects to hit its targets, despite the expensive endeavor of bidding for a rival.
“Looking ahead, we are highly focused on continuing to improve our sales trend,” CEO Neal Black said in a statement. “We feel confident that the strategies we have in place will enable us to show continued improvement and to further strengthen our brand and best position it for the future.”
This is perhaps the most passive-aggressive bit in the Jos. A. Bank release. Its spells out in clear terms that if Men’s Wearhouse doesn’t join, it will have to keep trying to beat it—a competition Men’s Wearhouse has been losing if return on equity and profit margin are any measure.
