Oxford Industries (OXM, Financial) experienced a downturn following its Q4 (Jan) earnings announcement, despite increasing its quarterly dividend by 3% to $0.67 per share, which now yields 2.4%. Known for its ownership of brands like Tommy Bahama, Lilly Pulitzer, and Southern Tide, the company targets consumers seeking a relaxed, vacation-style wardrobe. Despite the potential for increased sales with more people traveling, the company reported disappointing results and guidance.
Key points from the report include:
- OXM missed earnings per share (EPS) expectations for the first time after 11 consecutive beats, with a slight revenue increase of 5.7% year-over-year to $404.4 million, missing analyst forecasts and falling at the lower end of its $403-423 million guidance.
- The company observed a drop in adjusted operating margin to 9.6% from 12.1% compared to the previous year, alongside a warning of weaker performance in Q1 and mixed full-year guidance.
- January and February saw weaker sales, attributed to high comparisons from the previous year. However, a slight improvement was noted in March.
- OXM attributes the current market volatility to cautious consumer spending on discretionary items, despite positive economic indicators.
- The company plans to counteract this trend by focusing on unique, new product offerings and maintaining a positive brand image. Special emphasis is being placed on expanding Tommy Bahama's hospitality business to boost sales.
The fiscal year ended on a disappointing note for OXM, marking its first earnings miss in several quarters and projecting a weaker Q1. This performance is particularly surprising given the brand's target demographic of older, higher-income consumers, a segment that has seen better results from other apparel retailers.
