Oxford Industries(OXM) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record sales and earnings for Q3 2021, with sales increasing by 41% compared to the same quarter last year and a 15% increase over Q3 2019, excluding Lanier Apparel [9][12][22] - Adjusted earnings per share reached $1.19, compared to an adjusted loss of $0.44 per share last year and $0.10 during Q3 2019 [12][32] - Adjusted gross margin increased by 710 basis points to 62% compared to fiscal 2019 [12][23] Business Line Data and Key Metrics Changes - The direct-to-consumer business grew by 40%, with a 13% increase in full-price retail and a 100% gain in full-price e-commerce compared to fiscal 2019 [10][12] - Restaurant sales grew by 14% compared to Q3 2019, supported by strong performance at existing locations and the addition of new Marlin Bar locations [11][12] Market Data and Key Metrics Changes - Consolidated sales increased by 15% to $243 million, with improvements across all regions, particularly in Florida, the Southeast, and Texas [22] - FIFO inventory decreased by 17% compared to fiscal 2020, indicating effective inventory management [26] Company Strategy and Development Direction - The company aims to deliver long-term shareholder value by owning a portfolio of powerful lifestyle brands focused on consumer happiness [7][13] - The exit of Lanier Apparel marks a strategic shift towards a focused brand portfolio consisting of five lifestyle brands [13] - The company is enhancing its digital marketing capabilities to better understand and engage customers [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting sales objectives despite supply chain challenges, emphasizing agility in inventory management [40] - The company expects continued strength in full-price direct-to-consumer sales and gross margin expansion over 2019 [28][32] - For Q4, sales are projected to be between $285 million and $295 million, with adjusted earnings expected to be between $1.20 and $1.35 per share [30][31] Other Important Information - The company declared a dividend of $0.42 per share and approved a new share repurchase authorization of $150 million [35][66] - Capital expenditures are expected to be between $35 million and $40 million, focusing on IT initiatives and new store openings [33] Q&A Session Summary Question: Inventory management and store rollout potential - Management highlighted effective inventory management and plans for more Southern Tide stores, with a focus on Marlin Bars for Tommy Bahama [38][42] Question: Holiday sales trends and wholesale partner orders - Management noted robust holiday sales trends and strong performance from wholesale partners, with no anticipated cancellations [50][52] Question: Pricing strategy and capital allocation - Management indicated a 1-point increase in IMUs and proactive pricing strategies to offset inflationary pressures, alongside a strong capital allocation strategy focused on investments and shareholder returns [63][64]