Oxford Industries(OXM)2023-12-07 19:28Financial Performance - Consolidated net sales for the First Nine Months of Fiscal 2023 were $1,167 million, a 13.4% increase from $1,029 million in the same period of Fiscal 2022[70] - Operating income decreased to $162 million in the First Nine Months of Fiscal 2023 from $179 million in Fiscal 2022, reflecting a decline of 9.1%[70] - Net earnings for the First Nine Months of Fiscal 2023 were $121 million, down 9.7% from $134 million in Fiscal 2022[70] - Net earnings per diluted share decreased by 8% to $7.57 in the First Nine Months of Fiscal 2023 compared to $8.19 in the same period of Fiscal 2022[70] - In the Third Quarter of Fiscal 2023, consolidated net sales increased by 4.3% to $327 million from $313 million in the Third Quarter of Fiscal 2022[84] - Operating income decreased to $14.5 million in the Third Quarter of Fiscal 2023, down 47.1% from $27.3 million in the prior year, primarily due to lower income in Tommy Bahama and Lilly Pulitzer[107] - Net earnings per diluted share for the third quarter of Fiscal 2023 were $0.68, down from $1.22 in Q3 Fiscal 2022, reflecting increased SG&A and decreased gross margin[117] Sales Performance by Brand - Johnny Was contributed $49 million in sales during the Third Quarter of Fiscal 2023, a significant increase from $23 million in the same quarter of Fiscal 2022[85] - Tommy Bahama and Lilly Pulitzer experienced sales declines of 4.8% and 9.2%, respectively, in the Third Quarter of Fiscal 2023[85] - Tommy Bahama reported net sales of $170.1 million for Q3 Fiscal 2023, a decrease of $8.5 million or 4.8% compared to Q3 Fiscal 2022[108] - Lilly Pulitzer's net sales were $76.3 million in Q3 Fiscal 2023, down $7.8 million or 9.2% from the previous year[109] - Johnny Was achieved net sales of $49.1 million in Q3 Fiscal 2023, an increase of $26.4 million, reflecting a significant growth due to its acquisition[110] - Emerging Brands saw a 15.8% increase in net sales to $31.2 million in Q3 Fiscal 2023, up $4.2 million from the prior year[111] - Lilly Pulitzer's net sales for the first nine months of Fiscal 2023 were $265.1 million, a slight increase of 0.1% compared to $264.8 million in Fiscal 2022[146] - Johnny Was reported net sales of $150.6 million for the first nine months of Fiscal 2023, a significant increase from $22.7 million in the same period of Fiscal 2022, representing a change of NM%[147] - Emerging Brands achieved net sales of $96.7 million, up 9.2% from $88.6 million in Fiscal 2022, with gross profit increasing by 9.8% to $48.2 million[148] Gross Profit and Margins - Consolidated gross profit increased by $7.7 million, or 3.9%, driven by a 4% increase in net sales, while gross margin decreased to 62.9% from 63.2%[96] - Gross profit margin for Tommy Bahama improved to 65.4% in Q3 Fiscal 2023, up from 64.7% in Q3 Fiscal 2022[108] - Lilly Pulitzer's gross margin decreased to 67.3% from 67.9% due to a change in sales mix with a higher proportion of flash clearance sales[135] - Johnny Was reported a gross margin of 68.6% for the First Nine Months of Fiscal 2023, reflecting improved product margins and reduced freight costs[136] - Emerging Brands' gross margin improved due to a higher proportion of direct-to-consumer sales, although it faced pressure from lower wholesale margins[137] Expenses and Income Tax - SG&A expenses rose by $19.8 million, or 11.3%, totaling $194.8 million, with increased employment costs and advertising expenses contributing significantly[105] - SG&A expenses increased by $107.6 million, or 21.7%, in the First Nine Months of Fiscal 2023, primarily due to increased employment costs and advertising expenses[139] - Interest expense increased by 74.4% to $1.2 million in Q3 Fiscal 2023, primarily due to a higher average outstanding debt balance[113] - Interest expense for the first nine months of Fiscal 2023 was $4.9 million, a 300% increase from $1.2 million in Fiscal 2022, primarily due to higher debt levels following the Johnny Was acquisition[150] - Income tax expense decreased by 15.9% to $36.8 million in Fiscal 2023 from $43.8 million in Fiscal 2022, with an effective tax rate of 23.4%[151] Assets and Liabilities - Total current assets as of October 28, 2023, were $291.4 million, a decrease from $400.3 million as of October 29, 2022, primarily due to lower inventories and cash[157] - Working capital increased to $78.9 million as of October 28, 2023, compared to $69.1 million in January 2023, with a working capital ratio of 1.37[157] - Inventories decreased to $157.5 million as of October 28, 2023, from $171.6 million in October 2022, reflecting ongoing inventory management initiatives[163] - Total current liabilities decreased to $212.5 million from $230.4 million a year earlier, a reduction of 7.9%[169] - Long-term debt was reduced to $66.2 million as of October 28, 2023, down from $130.4 million a year earlier, reflecting a decrease of 49.3%[169] Cash Flow and Capital Expenditures - Cash provided by operating activities for the first nine months of Fiscal 2023 was $169.4 million, compared to $86.3 million in the same period of Fiscal 2022, representing a significant increase of 96.5%[171] - Capital expenditures for Fiscal 2023 are anticipated to be approximately $80 million, up from $47 million in Fiscal 2022, indicating a year-over-year increase of 70.2%[193] - The company repurchased $30 million of shares in the first nine months of Fiscal 2023, compared to $90 million in the same period of Fiscal 2022[176] Strategic Initiatives - The company continues to invest in technology infrastructure following the acquisition of Johnny Was on September 19, 2022[61] - The company plans to increase its full-price stores by approximately 25 by the end of Fiscal 2023[193] - As of October 28, 2023, the company had $66 million in borrowings under its $325 million Revolving Credit Agreement, with $253 million available[183] - The company has not experienced significant changes to its critical accounting policies and estimates during the First Nine Months of Fiscal 2023[197] Seasonal Trends - The third quarter historically has the lowest net sales and net earnings compared to other quarters due to seasonal demand fluctuations[200] - There has been a decreased exposure to interest rates resulting from reduced borrowings relative to January 28, 2023[201]