Oxford Industries(US:OXM)2022-09-02 01:09Financial Data and Key Metrics Changes - The company reported consolidated second quarter sales of $363 million, an 11% increase over last year's second quarter sales of $329 million [10][30] - Adjusted EPS for the second quarter was $3.61, an 11% increase from last year's record EPS of $3.24 [10] - Adjusted gross margin expanded by 30 basis points to 64.6% [10][32] - Adjusted operating profit increased by 8% to $78 million, representing 21.5% of sales [10][33] Business Line Data and Key Metrics Changes - Tommy Bahama, the largest brand, saw sales grow by 17% to $244 million, with an adjusted gross margin of 64.3% and an operating margin of 24% [11][33] - Lilly Pulitzer experienced modest top-line growth with a 24% operating margin, driven by increases in both wholesale and retail channels [18][33] - The emerging brands group posted a 31% year-over-year sales gain, with all three brands (Southern Tide, The Beaufort Bonnet Company, Duck Head) delivering solid growth [23][68] Market Data and Key Metrics Changes - The company noted favorable market conditions, including the return of consumers to physical retail and leisure travel, which positively impacted sales [9] - The inventory balance at the end of the quarter was healthier compared to the previous year, with a 53% increase on a FIFO basis [34] Company Strategy and Development Direction - The company is focused on long-term brand growth, enhancing digital and omnichannel capabilities, and operational excellence [26] - The share repurchase program has returned $86 million to shareholders since its initiation, reflecting the company's commitment to maximizing long-term shareholder value [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued momentum into the third quarter, despite some macroeconomic headwinds [28] - The company expects double-digit top and bottom line growth for the year, with modest operating margin expansion [28][41] Other Important Information - The company has a healthy liquidity position with no debt and $186 million in cash and short-term investments [37] - A dividend of $0.55 per share was declared for the third quarter [39] Q&A Session Summary Question: Performance of regions like New York, Hawaii, Las Vegas - Management noted that New York City is lagging in recovery, while other regions are performing well [49][50] Question: Strategy of raising AUR and price resistance - Management indicated that they are not seeing resistance to price increases and continue to deliver additional value [51][52] Question: Changes in consumer behavior in late May and June - Management observed no significant changes in consumer behavior, with strong sales continuing into August and September [56][57] Question: Performance of Southern Tide and long-term opportunities - Southern Tide had a strong quarter, with growth in both wholesale and e-commerce, and management sees significant long-term potential [63][66] Question: Promotional environment expectations - Management anticipates a more promotional environment but believes they can maintain their brand strength without competing solely on price [70][73] Question: Supply chain headwinds - Management noted improvements in supply chain conditions compared to the previous year, with adjustments made to mitigate disruptions [80][82]