Chico's (NYSE:CHS) - the one-time trendy specialty retailer - announced second-quarter earnings at the end of August that were better than expected, growing sales and profits year over year. Could the retail slump slowly be ending? Perhaps not, but there are some retailers doing well in this recession. One of them is Maryland-based menswear chain, Jos. A Banks (Nasdaq:JOSB). Actually, they've been doing well for the entire decade. Here are five reasons for you to love it.

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Reason #1 - EPS High
Its second-quarter results were off the charts with sales up almost 10% and earnings per share 38.8%. Its EPS of $0.68 beat analyst estimates by $0.14 and same store sales grew 5.2% year over year. Most impressively, this was its 13th consecutive quarter with an EPS increase. How many retailers can say this over the last three years? Not many, that's for sure.

Reason #2 - Consistency
As mentioned above, the company has been doing well in recent years. In fact, it's increased its EBIT earnings for 10 consecutive years, growing them from $2.2 million in 1999 to $96 million in fiscal 2008. At the same time, sales have grown from $193.5 million at the turn of the century to $695.9 million this past year. It's a remarkably consistent business whose best days are likely ahead of it, not behind it.

Reason #3 - Shorts

Company Short Ratio
Jos. A Banks (Nasdaq:JOSB) 28.4%
Macy\'s (NYSE:M) 8.6%
Men\'s Wearhouse (NYSE:MW) 12.4%
Nordstrom (NYSE:JWN) 15.4%
Sears Holdings (Nasdaq:SHLD) 12.7%


I usually don't pay too much attention to the short ratio. As a long-term investor, if I believe a stock is worth buying, no amount of skepticism from traders is going to keep me away. But it is interesting to note that shorts hold 28.4% of its float. This is higher than all four of its competitors listed above including Sears, which the last time I looked was darn close to unfixable.

I have a hard time understanding why anyone would be comfortable betting against a consistent performer like Jos. A Banks, when a classic underachiever such as Sears is a far more suitable candidate for shorting. It's beyond comprehension. (Learn more about the short interest in our article Short Interest: What It Tells Us.)

Reason #4 - More Than Comps
Good retail isn't just about beating comps. It's about far more with good merchandising, which includes proper buying, at the top of the list. If you get people into the stores and they see nothing worth buying, you're out of business in a hurry. That's why I was amused to hear that the Wall Street Journal named Jos. A Banks' Traveler dress shirt as the best wrinkle-free shirt in America. Companies that buy and merchandise well (other examples include Buckle and Coach) will always be able to withstand whatever an economy throws at it. Jos. A Banks is no different.

Reason #5 - Expansion
One of the benefits of a terrible economy is that stronger companies are able to take advantage of whatever the marketplace gives it. In Jos. A Banks' case, it is excellent real estate opportunities at reasonable lease rates, which has allowed it to expand more quickly than planned, tripling its store openings in 2009 to between 30 and 40 stores across the country. Already in all but five states, it plans to have 600 stores open in the very near future. Given how consistent it's been, I see bigger profits and sales on the horizon providing even more growth for its stock in the coming years.

The Bottom Line
I love retail and everything about it. When it's done right, it's a thing of beauty. Not many companies do it right but Jos. A Banks does and the numbers bear this out. Only a fool would short this stock. And I'm no fool. (Read Analyzing Retail Stocks to learn about the most important metrics to look at when analyzing retail stocks.)

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