Oxford Industries(OXM) - 2026 Q1 - Quarterly Results

First Quarter Fiscal 2025 Financial Results Oxford Industries reported a slight decline in Q1 fiscal 2025 net sales and significant EPS decreases, primarily due to tariff impacts, while Lilly Pulitzer showed strong growth and the company maintained gross margins above 64% First Quarter Fiscal 2025 Highlights Oxford Industries reported consolidated net sales of $393 million for the first quarter of fiscal 2025, a slight decrease from $398 million in the prior year, with significant declines in both GAAP and adjusted EPS primarily attributed to uncertain tariff and trade dynamics Q1 Fiscal 2025 Key Financial Metrics | Metric | Q1 Fiscal 2025 | Q1 Fiscal 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Net Sales | $393 million | $398 million | (1.3%) | | GAAP EPS | $1.70 | $2.42 | (29.8%) | | Adjusted EPS | $1.82 | $2.66 | (31.6%) | Q1 2025 Net Sales by Operating Group ($ in millions) | Operating Group | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Tommy Bahama | $216.2 | $225.6 | (4.2%) | | Lilly Pulitzer | $99.0 | $88.4 | 12.0% | | Johnny Was | $43.5 | $51.2 | (15.1%) | | Emerging Brands | $34.2 | $33.0 | 3.8% | | Total Company | $392.9 | $398.2 | (1.3%) | - CEO Tom Chubb highlighted that despite industry-wide headwinds from tariffs and trade dynamics, the company delivered results within guidance. Lilly Pulitzer's performance was a bright spot, with its assortment resonating with consumers. The company is focused on diversifying its supply chain to reduce exposure to future tariff developments[3] Detailed First Quarter 2025 Performance The 1.3% decline in consolidated sales was driven by a 3% decrease in full-price direct-to-consumer (DTC) sales, with e-commerce sales falling 5%, while wholesale sales grew by 4%, and gross margin contracted due to higher freight costs, increased markdowns, a sales mix shift, and $1 million in new tariff charges - Sales performance by channel showed mixed results: - Full-price DTC sales decreased 3% to $249 million - Full-price retail sales were down 1% to $135 million - E-commerce sales fell 5% to $114 million - Wholesale sales increased 4% to $92 million[5][6] - Gross margin decreased on both a GAAP and adjusted basis, primarily due to: - Increased freight expenses at Tommy Bahama - Higher markdowns at Lilly Pulitzer and Johnny Was - A sales mix shift to a higher proportion of wholesale - $1 million in additional costs from new U.S. tariffs[6] - SG&A expenses increased to $223 million from $213 million, with approximately $6 million (59%) of the increase driven by higher employment, occupancy, and depreciation costs related to 31 new store openings since Q1 2024[6] - Operating income fell to $36 million (9.2% of sales) from $52 million (13.2% of sales) in the prior year. On an adjusted basis, operating income was $39 million, down from $57 million[6] Financial Position, Liquidity, and Dividends The company's Q1 2025 financial position reflects increased inventory and debt, driven by strategic purchases and capital expenditures, alongside a continued commitment to shareholder returns through a raised quarterly dividend Balance Sheet and Liquidity The company's financial position at the end of Q1 2025 showed a significant increase in both inventory and debt compared to the prior year, partly due to accelerated purchases ahead of anticipated tariffs and funding for share repurchases and capital expenditures, resulting in cash used in operations - Inventory increased by $18 million (12% on a LIFO basis) compared to Q1 2024. This was driven by accelerated purchases ahead of anticipated tariff increases and the capitalization of increased tariff costs[7] - Cash used in operations was $4 million, compared to cash provided by operations of $33 million in the prior-year quarter, reflecting lower net earnings and higher working capital needs[8] - Borrowings outstanding increased significantly to $118 million, up from $19 million in Q1 2024. This was primarily used to fund $51 million in share repurchases and $23 million in capital expenditures[9] Dividend The Board of Directors declared a quarterly cash dividend of $0.69 per share, an increase from the prior year, payable on August 1, 2025, continuing the company's uninterrupted dividend history since 1960 - A quarterly cash dividend of $0.69 per share was declared, payable on August 1, 2025[10] - The company has paid a dividend every quarter since becoming a public company in 1960[10] Outlook and Forward-Looking Statements Oxford Industries revised its fiscal 2025 guidance downwards due to significant tariff costs, while outlining capital expenditure plans for a new distribution center and emphasizing key risks to future performance Fiscal 2025 and Second Quarter Outlook Oxford Industries has revised its fiscal 2025 guidance downwards, citing significant tariff-related cost pressures, now expecting full-year net sales between $1.475 billion and $1.515 billion and adjusted EPS between $2.80 and $3.20, incorporating an estimated $40 million in additional tariff costs Full Fiscal 2025 Guidance (vs. Fiscal 2024 Actual) | Metric | Fiscal 2025 Guidance | Fiscal 2024 Actual | | :--- | :--- | :--- | | Net Sales | $1.475B - $1.515B | $1.52B | | GAAP EPS | $2.28 - $2.68 | $5.87 | | Adjusted EPS | $2.80 - $3.20 | $6.68 | Second Quarter Fiscal 2025 Guidance (vs. Q2 2024 Actual) | Metric | Q2 2025 Guidance | Q2 2024 Actual | | :--- | :--- | :--- | | Net Sales | $395M - $415M | $420M | | GAAP EPS | $0.92 - $1.12 | $2.57 | | Adjusted EPS | $1.05 - $1.25 | $2.77 | - The revised fiscal 2025 guidance includes an estimated $40 million in additional tariff costs, equating to an after-tax impact of $2.00 per share[11] Capital Expenditures and Other Forecasts For fiscal 2025, the company anticipates capital expenditures of approximately $120 million, primarily for a new distribution center, alongside plans for a net increase of approximately 15 full-price stores, an expected interest expense of $8 million, and an effective tax rate of around 26% - Capital expenditures for fiscal 2025 are expected to be approximately $120 million, with $70 million dedicated to completing the new distribution center in Lyons, Georgia[14] - The company plans a net increase of approximately 15 full-price stores in fiscal 2025, including three new Tommy Bahama Marlin Bars[14] - Full-year fiscal 2025 interest expense is anticipated to be $8 million, and the effective tax rate is expected to be approximately 26%[13] Safe Harbor Statement The earnings release includes forward-looking statements subject to significant risks and uncertainties, including changes in trade policies, macroeconomic factors, supply chain challenges, competitive pressures, and cybersecurity threats, which could cause actual results to differ materially from current expectations - The company identifies several key risks that could impact future performance, including: - Changes in U.S. trade policies and tariffs - Macroeconomic factors affecting consumer spending, such as inflation and interest rates - Risks related to supply chain diversification and sourcing - Competitive conditions in a highly promotional retail environment - Cybersecurity breaches and ransomware attacks[19][22] Financial Statements and Supplemental Data The consolidated financial statements for Q1 2025 show increased assets and liabilities, a decline in net earnings, negative operating cash flow, and detailed segment performance, alongside continued retail store expansion Consolidated Financial Statements The consolidated financial statements for the first quarter ended May 3, 2025, show total assets increased to $1.34 billion from $1.16 billion year-over-year, primarily due to higher property and equipment and operating lease assets, with total liabilities also growing, and net earnings decreasing to $26.2 million from $38.4 million in the prior-year period Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | May 4, 2024 | | :--- | :--- | :--- | | Total Current Assets | $317,534 | $298,363 | | Total Assets | $1,339,706 | $1,156,976 | | Long-term debt | $117,714 | $18,630 | | Total Liabilities | $747,283 | $564,101 | | Total Shareholders' Equity | $592,423 | $592,875 | Consolidated Statement of Operations Highlights (in thousands) | Account | Q1 Fiscal 2025 | Q1 Fiscal 2024 | | :--- | :--- | :--- | | Net sales | $392,861 | $398,184 | | Gross profit | $252,286 | $258,361 | | Operating income | $36,206 | $52,451 | | Net earnings | $26,181 | $38,373 | Consolidated Statement of Cash Flows Highlights (in thousands) | Account | Q1 Fiscal 2025 | Q1 Fiscal 2024 | | :--- | :--- | :--- | | Cash (used in) provided by operating activities | $(3,942) | $32,923 | | Cash used in investing activities | $(23,455) | $(12,134) | | Cash provided by (used in) financing activities | $25,959 | $(20,710) | Non-GAAP Reconciliations and Segment Performance After adjusting for LIFO accounting and amortization of Johnny Was intangible assets, the company's adjusted net earnings per diluted share for Q1 2025 was $1.82, compared to $2.66 in the prior year, with Lilly Pulitzer's operating income growing 16.7% while Tommy Bahama's fell 27.9% and Johnny Was swung to an operating loss Q1 EPS Reconciliation (GAAP to Adjusted) | Description | Q1 Fiscal 2025 | Q1 Fiscal 2024 | | :--- | :--- | :--- | | GAAP EPS | $1.70 | $2.42 | | LIFO adjustments | $0.02 | $0.11 | | Amortization of Johnny Was intangible assets | $0.09 | $0.13 | | Adjusted EPS | $1.82 | $2.66 | Q1 2025 Operating Income by Segment (As Reported, in millions) | Operating Group | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Tommy Bahama | $30.7 | $42.6 | (27.9)% | | Lilly Pulitzer | $18.1 | $15.5 | 16.7% | | Johnny Was | $(3.4) | $0.3 | (1124.0)% | | Emerging Brands | $1.9 | $3.8 | (49.8)% | Store Network Expansion Oxford Industries continued to expand its retail presence, increasing its total direct-to-consumer locations to 353 at the end of Q1 2025, representing a net increase of 8 stores during the quarter and 31 stores year-over-year, primarily driven by the Emerging Brands segment Total Direct to Consumer Location Count | Brand Group | End of Q1 2025 | End of Q1 2024 (Implied) | | :--- | :--- | :--- | | Tommy Bahama | 165 | 160 | | Lilly Pulitzer | 65 | 60 | | Johnny Was | 80 | 78 | | Emerging Brands | 43 | 24 | | Total Oxford | 353 | 322 | - The company opened a net of 8 new stores in the first quarter of fiscal 2025, contributing to a total of 353 locations[6][34]