Oxford Industries outlines $1.475B–$1.515B full-year sales target as tariff mitigation and brand innovation take shape
Sep. 10, 2025 8:28 PM ET
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Earnings Call Insights: Oxford Industries (OXM) Q2 2025
Management View- Tom Chubb, Chairman, CEO & President, emphasized that "our team has navigated these challenges with discipline and focus, delivering net sales and adjusted EPS within and above our guidance ranges, respectively." He detailed that Lilly Pulitzer achieved positive direct-to-consumer comparable sales, supported by product innovation such as the Linen Seaspray jacket and new product lines. Chubb noted, "the initial response to the Vintage Vault has exceeded expectations and affirms the power of heritage storytelling and brand authenticity."
- Chubb addressed Tommy Bahama's shortfall, stating, "some spring and early summer deliveries missed the mark in several areas, most notably in color assortment and completeness of the line," particularly affecting Florida stores, while the West performed better. He cited the Boracay Island chino launch as a successful new product at a higher price point, reporting "very high sell-throughs across our own direct-to-consumer channels and also with our wholesale partners."
- For Johnny Was, Chubb acknowledged ongoing challenges but said, "we have developed and are in the early stages of implementing a comprehensive plan to improve Johnny Was' performance."
- The Emerging Brands Group delivered revenue growth, and Chubb reiterated commitment to long-term investments, stating the Lyons, Georgia, distribution center is on schedule for completion late fiscal 2025 or early 2026, and three Marlin Bar openings with a net increase of about 15 full-price stores are expected by year-end.
- K. Grassmyer, Executive VP, CFO & COO, reported, "our teams were able to deliver top-line results within our previously issued guidance range and bottom-line results slightly above our previous issued guidance range for the second quarter." He specified consolidated net sales of $403 million and an adjusted operating profit of $28 million with a 7% operating margin. Grassmyer also noted, "we ended with $1.26 of adjusted net earnings per share."
Outlook- Grassmyer stated, "For the full year, net sales are expected to be between $1.475 billion and $1.515 billion, reflecting a decline of 3% to just slightly negative compared to sales of $1.52 billion in fiscal 2024."
- He confirmed the sales plan includes decreases in Tommy Bahama and Johnny Was, offset by growth in Lilly Pulitzer and Emerging Brands, and anticipated flat to modestly positive comp sales for the rest of the year.
- Guidance for fiscal 2025 maintains gross margin contraction of about 200 basis points, mainly from tariffs, with a net tariff impact estimated at $25 million to $35 million or approximately $1.25 to $1.75 per share after tax.
- Adjusted EPS guidance remains between $2.80 and $3.20 for 2025.
- Third quarter sales are projected at $295 million to $310 million, with an expected adjusted loss per share of between ($1.05) and ($0.85).
Financial Results- Net sales for the quarter were $403 million, compared to $420 million in Q2 2024.
- Sales in full-price brick-and-mortar locations decreased by 6%, driven by a negative comp of 7%, partially offset by new store additions. Wholesale and e-commerce sales declined by 6% and 2%, respectively, while outlet sales fell 4%. Food and beverage locations experienced modest sales growth year-over-year.
- Company-wide comp sales were negative 5%.
- Adjusted gross margin contracted 160 basis points to 61.7%, impacted by $9 million in additional tariffs.
- Adjusted SG&A expenses rose 5% to $224 million, with added costs from new store openings and preopening expenses.
- Inventory increased $27 million or 19% on a LIFO basis, primarily due to tariffs and accelerated purchases. Long-term debt decreased to $81 million from $118 million last quarter.
- Cash flow from operations provided $80 million in the first half, down from $122 million in the prior year, affected by lower net earnings and working capital changes.
Q&A- Ashley Owens, KeyBanc: Asked about the drivers of positive quarter-to-date comps and brand-level performance. Chubb responded that "comps are positive quarter-to-date. That really -- all the brands have been part of that. Lilly continues to be positive. Tommy Bahama is around flattish at this point...mostly traffic-driven."
- Owens followed up on promotions. Chubb said, "we're not planning any major departures from the way we've run promotions in the past...we expect to do proportionately more of the business during those periods." Grassmyer added that shifting the Tommy Bahama Friends & Family event to August "worked well for us."
- Janine Stichter, BTIG: Asked about price increases in response to tariffs. Chubb explained, "we've been...selective price increases...on an item-by-item basis...On average, that's led to sort of low to mid-single digit or low mid-single-digit price increases."
- Stichter inquired about margin improvement at Tommy Bahama promotional events. Chubb replied, "we ended up selling more full-price product during the promotional period," with Grassmyer noting fewer markdowns due to less inventory.
- Dana Telsey, Telsey Group: Asked about competitive environment and market share. Chubb indicated, "I do think that we're holding and even gaining share in our wholesale channels...overall, that market is -- they're being very cautious with their forward buys."
- Mauricio Serna Vega, UBS: Asked about the impact of shifting the Tommy Bahama sale and sustaining EPS guidance despite lower net tariff impact. Grassmyer clarified mitigation actions offset increased exposure, keeping overall impact neutral.
- Joseph Civello, Truist: Followed up on price increases for spring. Chubb stated, "I think we're going to be a little bit on the conservative side with the price increases as long as tariffs remain up in the air."
- Tracy Kogan, Citi: Asked about future CapEx and store growth. Grassmyer stated, "an ongoing, it's going to kind of be in that $75 million pace," and expects fewer store openings next year, around 15 compared to 30 last year.
Sentiment Analysis- Analysts displayed a neutral to slightly cautious tone, focusing on comps, pricing strategy, and margin resilience. There were probing questions about the effectiveness of tariff mitigation and the sustainability of brand momentum.
- Management maintained a confident and measured tone in prepared remarks but demonstrated more caution and detail in the Q&A, particularly regarding tariffs and pricing. Chubb used phrases such as "we are confident" and "we have developed and are in the early stages," but also expressed care regarding pricing and market unpredictability.
- Compared to the previous quarter, management's tone remained steady, emphasizing mitigation and cautious optimism. Analyst sentiment was similarly probing but acknowledged improvements in comp trends and margin management.
Quarter-over-Quarter Comparison- Guidance for full-year sales and EPS remains unchanged from Q1, with continued emphasis on tariff impact and mitigation strategies.
- There was an evolution in messaging around brand-level performance, with Lilly Pulitzer sustaining momentum, Tommy Bahama showing early signs of improvement, and Johnny Was remaining challenged.
- The prior quarter stressed initial tariff challenges and supply chain shifts, while the current quarter described successful mitigation actions and more precisely quantified tariff impacts.
- Analysts in both quarters focused on comps, pricing, and margin, but the current quarter featured more targeted questions about specific mitigation actions and inventory strategies.
- Management's confidence in navigating tariffs and promotional environments increased in specificity but remained cautious regarding broader consumer trends and discretionary spending.
Risks and Concerns- Management identified continued tariff pressure, describing $25 million to $35 million in net impact for the year after mitigation.
- There is ongoing concern regarding elevated promotional activity and cautious consumer behavior.
- Inventory levels increased due to both tariffs and accelerated purchases, but management expects these to decrease as the need for acceleration subsides.
- Johnny Was performance remains a challenge, with a plan for improvement still in early implementation.
- Analysts raised concerns about the ability to fully offset tariff impacts, the sustainability of positive comps, and the risk of increased promotional dependence.
Final Takeaway
Oxford Industries management underscored disciplined execution in a volatile market, maintaining full-year sales and EPS guidance despite ongoing tariff headwinds and promotional pressures. The company highlighted brand-specific innovation, especially at Lilly Pulitzer and Tommy Bahama, and affirmed progress in mitigating tariff impact through sourcing shifts and selective price increases. Emerging brands contributed growth, and capital projects remain on track. While inventory levels and macro uncertainty present ongoing risks, management's focus on brand strength, operational agility, and customer engagement sets a cautiously optimistic tone for the remainder of 2025.
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