Market Overview - Small cap stocks showed volatile performance in Q2, with the Russell 2000 Index recovering to within 10% of its record highs in just 55 days, primarily driven by growth, momentum, high-beta, and low-quality stocks [2] - The Russell 2000 returned 8.5% for the quarter, underperforming the Russell 1000 Index's 11.1%, marking the widest annual performance gap since 1935 [3] - Growth stocks regained leadership due to strong demand for AI beneficiaries, with the Russell 2000 Growth Index returning 12.0%, significantly outperforming the Russell 2000 Value Index by 700 basis points [3] Retail Investor Activity - Retail trading volumes have more than doubled since 2010, now accounting for nearly 21% of total market volume, while traditional long-only managers and hedge funds are losing market share [4] - Retail investors are focusing on companies with an average market cap about half that of the Russell 3000, with nearly 45% of their purchases being "zombie" companies with no earnings [10] - Notable examples include Regencell Bioscience, which saw a 7,000% increase in market cap despite having no revenue or regulatory approval [10] Portfolio Performance - The ClearBridge Small Cap Strategy underperformed its benchmark in Q2, with detractors in consumer discretionary and communication services sectors outweighing positive contributions from utilities and select healthcare companies [12] - Stock selection in the consumer discretionary sector faced challenges, particularly for Murphy USA and Oxford Industries, due to idiosyncratic headwinds and increased tariff costs [13][14] - Communication services sector detractors included Criteo and Anterix, with concerns over long-term growth and profitability impacting performance [15] Sector Contributions - Utilities sector performance was led by Talen Energy, benefiting from rising demand for power due to AI data centers [16] - Verona Pharma rebounded after receiving favorable FDA designation, leading to its acquisition by Merck at a premium [17] - Overall, the strategy had gains in six of the 11 sectors, with industrials and IT sectors being the leading contributors [21] Portfolio Positioning - The company actively adjusted its financial sector positioning, exiting Home BancShares for UMB Financial to enhance quality exposure [18] - New positions were initiated in AGCO within the industrials sector, expected to benefit from trade and tariff policies [19] - Exited positions included Abacus Global due to declining conviction and performance concerns [18] Outlook - The market shows signs of euphoria reminiscent of previous speculative bubbles, with a focus on low-quality stocks [4][20] - Economic uncertainties, including tariff impacts and potential inflation, suggest a need for a cautious approach [20] - The company continues to prioritize high-quality stocks with strong fundamentals, anticipating that these will be favored when market conditions shift [20]

Group 1 - The company is responsible for the development of transcript-related projects [1] - The company publishes thousands of quarterly earnings calls per quarter [1] - The company is continuing to grow and expand its coverage [1]

Core Insights - Oxford Industries reported revenue of $403.14 million for the quarter ended July 2025, reflecting a year-over-year decline of 4% [1] - The EPS for the same period was $1.26, down from $2.77 a year ago, with a surprise of +4.13% compared to the consensus estimate of $1.21 [1] - The revenue fell short of the Zacks Consensus Estimate of $407.65 million, resulting in a surprise of -1.11% [1] Financial Performance Metrics - Net Sales for Emerging Brands reached $38.5 million, exceeding the two-analyst average estimate of $33.95 million, representing a year-over-year increase of +17% [4] - Net Sales for Lilly Pulitzer were reported at $90.3 million, below the average estimate of $98.15 million, indicating a year-over-year decline of -1.5% [4] - Net Sales for Tommy Bahama stood at $229 million, slightly below the estimated $229.15 million, reflecting a year-over-year decrease of -6.6% [4] - Net Sales for Johnny Was were $45.4 million, compared to the average estimate of $46.55 million, showing a year-over-year decline of -9.7% [4] Stock Performance - Shares of Oxford Industries have returned -5.8% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Tapestry CEO Joanne Crevoiserat plans to implement the successful strategies used for the Coach brand to enhance the performance of Kate Spade [1] - The Kate Spade brand is gaining traction among younger consumers, particularly Gen Z, who have a different perception of luxury compared to previous generations [1]

Resort-style clothing maker Oxford Industries Inc. on Wednesday offered up mixed second-quarter results and third-quarter expectations, and said that while new Lilly Pulitzer offerings were attracting shoppers, its Tommy Bahama line wasn't. ...

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased by 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit for Q2 was $36.9 million, representing 50.4% of net sales, an increase from $35.1 million or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or $0.93 per share, compared to $0.6 million, or $0.05 per share in Q2 of the previous year [15] - Adjusted EBITDA for Q2 was $6.7 million, up from $2.7 million in the prior year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) segment increased by 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment saw a decline of 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company successfully elongated its full-price selling season from spring, which positively impacted gross margin performance [5] - The men's business showed solid performance, particularly in knits and bottoms, while women's wovens and knits also performed well [6] Company Strategy and Development Direction - The company is focused on reinvesting in the business, particularly in top-of-funnel marketing, after successfully navigating tariff challenges [8] - Plans to open new stores in strategic locations, such as Nashville and Sacramento, to enhance geographic coverage and support e-commerce [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic positioning despite a dynamic environment, emphasizing strong fundamentals and growth trajectory [9] - The company anticipates net sales for Q3 to be flat to up low single digits compared to the prior year, with cautious consumer sentiment expected [17] Other Important Information - The company has reduced its long-term debt balance to $31.1 million, down from $54.4 million in the prior year [14] - Inventory at the end of Q2 was $76.7 million, an increase from $66.3 million in the same period last year, driven by higher inventory carrying value due to tariffs [15][16] Q&A Session Summary Question: How will the company maximize collection flow next year based on Q2 learnings? - Management noted the need to analyze the benefits of stretching out the spring selling season and will make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management highlighted their nimbleness and strong team continuity as competitive advantages in maintaining quality and responding to market changes [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring value remains intact for both affluent and aspirational customers [25][27] Question: What is the current percentage of products sourced from China? - Management indicated progress in reducing exposure to China, targeting a cap of 25% for any one country, with expectations to achieve this by the holiday season [34][35] Question: What are the trends in freight costs and shipping delays? - Management explained that delays were intentional to manage inventory flow and that freight costs are not expected to see significant increases in the back half of the year [37][40] Question: How many store locations were open in Q2 compared to last year? - Management confirmed there were 40 full-price stores and 14 outlets last year, with new openings planned for Nashville and Sacramento [41][43]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit was $36.9 million, or 50.4% of net sales, compared to $35.1 million, or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or income per share of $0.93, compared to net income of $0.6 million, or income per share of $0.05 in Q2 of last year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer segment increased 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment declined by 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company experienced strong performance in women's wovens and knits, as well as in the buy-now, wear-now bottoms category [5] - Men's business showed solid results, particularly in knits and bottoms assortments [6] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts and has successfully reduced the estimated impact from incremental tariffs by approximately 50% for the second half of the year [7] - Plans to reinvest in the business include restoring top-of-funnel marketing dollars and exploring longer-term growth opportunities [8] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the growth trajectory, despite the dynamic environment and ongoing tariff pressures [9] - The company anticipates net sales for Q3 to be approximately flat to up low single digits compared to the prior year period [16] Other Important Information - The company’s long-term debt balance was $31.1 million, a reduction of $23.3 million compared to the prior year [14] - Net inventory increased to $76.7 million, driven by higher inventory carrying value due to tariffs [15] Q&A Session Summary Question: How will the company flow its collections next year based on Q2 learnings? - Management indicated that they will analyze the benefits of stretching out spring collections and make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management emphasized their nimbleness and ability to respond quickly as a competitive advantage, allowing them to maintain quality and potentially gain market share [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring that value remains at the new price points [26][27] Question: What impact have tariff issues had on new categories or accessories? - Management noted that licensing partners are also navigating similar challenges, and the company is focused on ensuring that price changes make sense for consumers [28][30] Question: What percentage of products are currently sourced from China? - Management reported that they are targeting a cap of 25% for sourcing from any one country and are progressing well in reducing exposure to China [34][35] Question: What are the trends in freight costs for the back half of the year? - Management indicated that they do not foresee a significant uptick in overall freight costs and expect normalization as they manage inventory around the holiday season [38][40] Question: How many store locations were open in the quarter compared to last year? - Management confirmed that they opened a Nashville location and have a Sacramento location slated for October, with no additional openings planned for the remainder of the year [41][42]

Financial Data and Key Metrics Changes - In Q2 of fiscal 2025, consolidated net sales were $403 million, down from $420 million in Q2 of fiscal 2024, aligning with guidance of $395 million-$415 million [5] - Adjusted gross margin contracted by 160 basis points to 61.7%, impacted by approximately $9 million in increased cost of goods sold due to tariffs [5] - Adjusted operating profit was $28 million, representing a 7% operating margin, compared to $57 million and a 13.5% margin in the prior year [5] Business Line Data and Key Metrics Changes - Lilly Pulitzer experienced a low single-digit positive comp, while total sales were down modestly due to lower wholesale sales [5] - Tommy Bahama faced a high single-digit negative comp, with performance particularly weak in Florida, but improvements were noted in the West [5][4] - Johnny Was continued to face challenges, with low double-digit negative comps, prompting a comprehensive plan for performance improvement [4] - Emerging Brands Group showed solid revenue growth, driven by new stores and positive comp store sales [4] Market Data and Key Metrics Changes - Sales in full-price brick-and-mortar locations decreased by 6%, with a negative comp of 7%, partially offset by new store openings [5] - E-commerce sales declined by 2%, while outlet locations saw a 4% decrease [5] - Food and beverage locations performed better, showing modest year-over-year sales growth [5] Company Strategy and Development Direction - The company is focused on mitigating tariff exposure through supply chain shifts and early product deliveries [4] - Long-term investments are ongoing, including the Lyons, Georgia distribution center, expected to be operational by late fiscal 2025 or early fiscal 2026 [4] - The company aims to enhance brand storytelling and marketing, particularly for Johnny Was, to re-establish momentum [4] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains pressured, characterized by higher tariffs and cautious consumer behavior [3] - Management expressed confidence in the ability to navigate challenges and maintain brand strength, with a focus on execution and customer happiness [3] - For the remainder of fiscal 2025, net sales are expected between $1.475 billion and $1.515 billion, reflecting a decline of 3% to slightly negative compared to fiscal 2024 [6] Other Important Information - The company anticipates a gross margin contraction of approximately 200 basis points for fiscal 2025, primarily due to tariffs [6] - Adjusted EPS is expected to be between $2.80 and $3.20, down from $6.68 in the previous year [6] Q&A Session Summary Question: What is driving the positive comparable store sales performance? - Management noted that all brands contributed positively, with Lilly Pulitzer showing strong performance and Tommy Bahama improving from previous quarters, primarily driven by increased traffic [9] Question: How are promotions being planned for the back half of the year? - Promotions will follow historical patterns, with adjustments made as necessary, and a focus on maintaining price and brand integrity [10][11] Question: How are pricing strategies evolving in response to tariffs? - The company is implementing selective price increases on an item-by-item basis, with a focus on covering gross margin dollars without overextending [20] Question: What is the outlook for wholesale partnerships? - Strong relationships with wholesale partners are emphasized, with positive feedback on pricing strategies, indicating potential for consumer acceptance [28] Question: What are the expectations for capital expenditures in fiscal 2026 and beyond? - After completing the Lyons project, ongoing capital expenditures are expected to be around $75 million, depending on store openings [64]

Group 1 - Superior Group of Companies, Inc. will participate in a fireside chat at the Sidoti Virtual Investor Conference on September 18, 2025, at 10:45 AM Eastern Time [1] - The live webcast and replay of the conference will be available on the company's Investor Relations website [1] - Management will also host virtual meetings throughout the day of the conference [1] Group 2 - Superior Group of Companies was established in 1920 and consists of three business segments: Healthcare Apparel, Branded Products, and Contact Centers [2] - Each segment serves large, fragmented, and growing addressable markets, enabling businesses to create extraordinary brand engagement experiences [2] - The company emphasizes service, quality, advanced technology, and omnichannel commerce as competitive advantages [2] - Superior Group of Companies is committed to enhancing shareholder value through organic growth and strategic acquisitions [2]

Core Viewpoint - Nike is facing challenges related to competition and tariffs, but there are indications that the company may be overcoming these issues [1] Group 1 - The sneaker and athletic-gear maker is experiencing concerns regarding competition in the market [1] - Tariffs are also a significant concern for Nike, impacting its operational costs [1] - An analyst suggests that Nike might be turning a corner in addressing both competition and tariff challenges [1]