Oxford: Owner of Tommy Bahama, Lilly Pulitzer and Southern Tide Reports Third Quarter Fiscal 2020 Results
–Strength in E-commerce in all Brands–
–Announces Exit of Legacy Lanier Apparel Business–
–Declares Dividend of $0.25 per share–ATLANTA, Dec. 09, 2020 (GLOBE NEWSWIRE) — Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its third quarter of fiscal 2020, ended October 31, 2020. Consolidated net sales were $175 million compared to $241 million in the third quarter of fiscal 2019. For the third quarter of fiscal 2020, the Company reported a loss of $0.64 per share on a GAAP basis and an adjusted loss per share of $0.44. This compares with earnings per share of $0.10 on both a GAAP and adjusted basis in the third quarter of fiscal 2019.The Company also announced its decision to exit the Lanier Apparel business, which is expected to be complete in the second half of fiscal 2021. The Company expects the wind down of Lanier Apparel to be cash flow positive.The Company’s third quarter fiscal 2020 adjusted results exclude a $10 million pre-tax charge related to the Lanier Apparel exit as well as a LIFO accounting credit of $6 million, among other items.Thomas C. Chubb III, Chairman and CEO, commented, “I am encouraged by our third quarter results as each of our branded businesses exceeded our internal plans. During our historically smallest quarter of the year, our full price e-commerce business grew 51%, helping partially offset the headwinds in other channels due to COVID-19. Our sustained digital success this year underscores the power of our brands and their strong consumer connections and is a great indication that our business is positioned for success in the post-pandemic environment.” “Our priorities during much of fiscal 2020 have been focused on protecting our people and customers, supporting our brands, and preserving liquidity,” continued Mr. Chubb. “These have been basic and important defensive measures and we have executed well on all fronts. As we were carefully navigating this unprecedented environment, we also took steps to reinforce and build upon the strengths of Tommy Bahama, Lilly Pulitzer and Southern Tide, as well as our smaller brands like The Beaufort Bonnet Company and Duck Head. As our brands become more digitally-focused, mobile-centric, and omni-channel, they continue to add capabilities that create personalized and seamlessly integrated digital and bricks and mortar shopping experiences that serve our customers well. Key technology initiatives across the various businesses such as enhanced CRM tools, sophisticated enterprise order management capabilities, website re-design and improved SEO, enrich the customer experience and add efficiencies to our operations.”“Through a series of acquisitions and divestitures over many years, Oxford has migrated from being a private label and licensed manufacturer servicing department stores and big box retailers, to owning a portfolio of compelling, direct to consumer lifestyle brands. Throughout that time, our legacy Lanier Apparel business has been well run by an exceptional group of people. That said, Lanier’s business model does not fit our long-term vision for the enterprise and the challenges presented by the pandemic have amplified the misalignment. Exiting this business will result in a portfolio that is completely in synch with our strategy. I want to personally thank the dedicated employees of Lanier Apparel for their contributions to Oxford over the years.”Mr. Chubb concluded, “As they have throughout the year, our people continue to rise to the occasion. We look forward to a solid finish to this year and a return to profitability in fiscal 2021 and I am confident that we will emerge from this pandemic with a bright, long-term future.”Third Quarter Fiscal 2020 Summary of ResultsConsolidated net sales decreased 27% in the third quarter of fiscal 2020 compared to the third quarter last year. Full price e-commerce sales grew 51% in the third quarter with growth in all the Company’s branded businesses. The growth in full-price e-commerce was offset by decreases in other channels of distribution.
— The Company, which temporarily closed its retail stores and restaurants in March, began a gradual reopening of locations in the second quarter. At the time of this release, substantially all stores and restaurants are open, but operating under varying degrees of restricted conditions for the safety of employees and customers.
— Full price retail sales and restaurant sales were 45% and 30% lower, respectively, and the wholesale channel decreased 37% year over year.
— Lilly Pulitzer’s e-commerce summer clearance event is typically a single event held in the third quarter in September. In 2020, this sale was separated into two events, one of which was held in the second quarter. As a result, Lilly Pulitzer’s e-commerce clearance event this September was 41% lower than last year, with the combined events 7% higher year over year.Gross margin was comparable with last year at 55%. Increased gross margin at Lilly Pulitzer and the impact of a favorable LIFO credit were offset by inventory markdown charges and decreased gross margin in the other businesses.SG&A decreased 15% or $21 million to $114 million as cost savings measures were taken, primarily related to employment costs and occupancy costs partially offset by $4 million of SG&A charges related to the exit of Lanier Apparel.The effective tax rate was a benefit of 25% compared to a charge of 34% in the third quarter of fiscal 2019.The Company reported a loss per share of $0.64 and, on an adjusted basis, a loss per share of $0.44.Balance Sheet and LiquidityInventory decreased 4% to $149 million at the end of the third quarter compared to $154 million in the prior year.As of October 31, 2020, the Company had a strong liquidity position with $53 million of cash and cash equivalents and $35 million of borrowings outstanding under its revolving credit agreement. Unused availability was $287 million at the end of the third quarter. In the prior year, the Company had $22 million of cash and cash equivalents and no borrowings outstanding.The Company believes its strong liquidity position will satisfy ongoing cash requirements for the foreseeable future. These cash requirements generally consist of working capital and other operating activity needs, dividend payments, and capital expenditures, which are expected to be approximately $30 million in fiscal 2020.DividendThe Board of Directors declared a quarterly cash dividend of $0.25 per share, payable on January 29, 2021 to shareholders of record as of the close of business on January 15, 2021. The Company has paid dividends every quarter since it became publicly owned in 1960.Fiscal 2020 OutlookDue to the significant uncertainty created by the COVID-19 pandemic, the Company is not providing a financial outlook for fiscal 2020.Conference CallThe Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live webcast of the conference call will be available on the Company’s website at www.oxfordinc.com. A replay of the webcast will be available on the Company’s website and will also be available by telephone through December 23, 2020 by dialing (412) 317-6671 access code 13713066.About OxfordOxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama®, Lilly Pulitzer® and Southern Tide® lifestyle brands, as well as other owned brands. Oxford also produces certain licensed and private label apparel products in its Lanier Apparel business. Oxford’s stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford’s website at www.oxfordinc.com.Basis of PresentationAll per share information is presented on a diluted basis.Non-GAAP Financial InformationThe Company reports its consolidated financial statements in accordance with generally accepted accounting principles (GAAP). To supplement these consolidated financial results, management believes that a presentation and discussion of certain financial measures on an adjusted basis, which exclude certain non-operating or discrete gains, charges or other items, may provide a more meaningful basis on which investors may compare the Company’s ongoing results of operations between periods. These measures include adjusted earnings, adjusted earnings per share, adjusted gross profit, adjusted gross margin, adjusted SG&A, and adjusted operating income, among others.Management uses these non-GAAP financial measures in making financial, operational and planning decisions to evaluate the Company’s ongoing performance. Management also uses these adjusted financial measures to discuss its business with investment and other financial institutions, its board of directors and others. Reconciliations of these adjusted measures to the most directly comparable financial measures calculated in accordance with GAAP are presented in tables included at the end of this release.Safe HarborThis press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which typically are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, the impact of the current coronavirus (COVID-19) pandemic, including uncertainties about its depth and duration (including resurgence), future store closures or other restrictions (including reduced hours and capacity) due to government mandates, and the effectiveness of store re-openings and reduction initiatives (including our ability to effectively renegotiate rent obligations), any or all of which may affect many of the following risks; demand for our products, which may be impacted by competitive conditions and/or evolving consumer shopping patterns; macroeconomic factors that may impact consumer discretionary spending for apparel and related products; the impact of any restructuring initiatives we may undertake in one or more of our business lines, including the process, timing, costs, uncertainties and effects of our announced exit of the Lanier Apparel business; costs of products as well as the raw materials used in those products; expected pricing levels; costs of labor; the timing of shipments requested by our wholesale customers; expected outcomes of pending or potential litigation and regulatory actions; changes in international, federal or state tax, trade and other laws and regulations, including the potential imposition of additional duties; the ability of business partners, including suppliers, vendors, licensees and landlords, to meet their obligations to us and/or continue our business relationship to the same degree in light of current or future financial stress, staffing shortages, liquidity challenges and/or bankruptcy filings exacerbated by the pandemic; weather; fluctuations and volatility in global financial markets; retention of and disciplined execution by key management; the timing and cost of store and restaurant openings and remodels, technology implementations and other capital expenditures; acquisition and disposition activities, including our ability to timely recognize expected synergies from acquisitions; access to capital and/or credit markets; the impact of the CARES Act and other legislation; changes in accounting standards and related guidance; and factors that could affect our consolidated effective tax rate, including estimated Fiscal 2020 taxable losses eligible for carry back to pre-U.S. Tax Reform periods. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. contained in our Annual Report on Form 10-K for the period ended February 1, 2020 under the heading “Risk Factors” and those described from time to time in our future reports filed with the SEC, including our Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2020. You should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
–Announces Exit of Legacy Lanier Apparel Business–
–Declares Dividend of $0.25 per share–ATLANTA, Dec. 09, 2020 (GLOBE NEWSWIRE) — Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its third quarter of fiscal 2020, ended October 31, 2020. Consolidated net sales were $175 million compared to $241 million in the third quarter of fiscal 2019. For the third quarter of fiscal 2020, the Company reported a loss of $0.64 per share on a GAAP basis and an adjusted loss per share of $0.44. This compares with earnings per share of $0.10 on both a GAAP and adjusted basis in the third quarter of fiscal 2019.The Company also announced its decision to exit the Lanier Apparel business, which is expected to be complete in the second half of fiscal 2021. The Company expects the wind down of Lanier Apparel to be cash flow positive.The Company’s third quarter fiscal 2020 adjusted results exclude a $10 million pre-tax charge related to the Lanier Apparel exit as well as a LIFO accounting credit of $6 million, among other items.Thomas C. Chubb III, Chairman and CEO, commented, “I am encouraged by our third quarter results as each of our branded businesses exceeded our internal plans. During our historically smallest quarter of the year, our full price e-commerce business grew 51%, helping partially offset the headwinds in other channels due to COVID-19. Our sustained digital success this year underscores the power of our brands and their strong consumer connections and is a great indication that our business is positioned for success in the post-pandemic environment.” “Our priorities during much of fiscal 2020 have been focused on protecting our people and customers, supporting our brands, and preserving liquidity,” continued Mr. Chubb. “These have been basic and important defensive measures and we have executed well on all fronts. As we were carefully navigating this unprecedented environment, we also took steps to reinforce and build upon the strengths of Tommy Bahama, Lilly Pulitzer and Southern Tide, as well as our smaller brands like The Beaufort Bonnet Company and Duck Head. As our brands become more digitally-focused, mobile-centric, and omni-channel, they continue to add capabilities that create personalized and seamlessly integrated digital and bricks and mortar shopping experiences that serve our customers well. Key technology initiatives across the various businesses such as enhanced CRM tools, sophisticated enterprise order management capabilities, website re-design and improved SEO, enrich the customer experience and add efficiencies to our operations.”“Through a series of acquisitions and divestitures over many years, Oxford has migrated from being a private label and licensed manufacturer servicing department stores and big box retailers, to owning a portfolio of compelling, direct to consumer lifestyle brands. Throughout that time, our legacy Lanier Apparel business has been well run by an exceptional group of people. That said, Lanier’s business model does not fit our long-term vision for the enterprise and the challenges presented by the pandemic have amplified the misalignment. Exiting this business will result in a portfolio that is completely in synch with our strategy. I want to personally thank the dedicated employees of Lanier Apparel for their contributions to Oxford over the years.”Mr. Chubb concluded, “As they have throughout the year, our people continue to rise to the occasion. We look forward to a solid finish to this year and a return to profitability in fiscal 2021 and I am confident that we will emerge from this pandemic with a bright, long-term future.”Third Quarter Fiscal 2020 Summary of ResultsConsolidated net sales decreased 27% in the third quarter of fiscal 2020 compared to the third quarter last year. Full price e-commerce sales grew 51% in the third quarter with growth in all the Company’s branded businesses. The growth in full-price e-commerce was offset by decreases in other channels of distribution.
— The Company, which temporarily closed its retail stores and restaurants in March, began a gradual reopening of locations in the second quarter. At the time of this release, substantially all stores and restaurants are open, but operating under varying degrees of restricted conditions for the safety of employees and customers.
— Full price retail sales and restaurant sales were 45% and 30% lower, respectively, and the wholesale channel decreased 37% year over year.
— Lilly Pulitzer’s e-commerce summer clearance event is typically a single event held in the third quarter in September. In 2020, this sale was separated into two events, one of which was held in the second quarter. As a result, Lilly Pulitzer’s e-commerce clearance event this September was 41% lower than last year, with the combined events 7% higher year over year.Gross margin was comparable with last year at 55%. Increased gross margin at Lilly Pulitzer and the impact of a favorable LIFO credit were offset by inventory markdown charges and decreased gross margin in the other businesses.SG&A decreased 15% or $21 million to $114 million as cost savings measures were taken, primarily related to employment costs and occupancy costs partially offset by $4 million of SG&A charges related to the exit of Lanier Apparel.The effective tax rate was a benefit of 25% compared to a charge of 34% in the third quarter of fiscal 2019.The Company reported a loss per share of $0.64 and, on an adjusted basis, a loss per share of $0.44.Balance Sheet and LiquidityInventory decreased 4% to $149 million at the end of the third quarter compared to $154 million in the prior year.As of October 31, 2020, the Company had a strong liquidity position with $53 million of cash and cash equivalents and $35 million of borrowings outstanding under its revolving credit agreement. Unused availability was $287 million at the end of the third quarter. In the prior year, the Company had $22 million of cash and cash equivalents and no borrowings outstanding.The Company believes its strong liquidity position will satisfy ongoing cash requirements for the foreseeable future. These cash requirements generally consist of working capital and other operating activity needs, dividend payments, and capital expenditures, which are expected to be approximately $30 million in fiscal 2020.DividendThe Board of Directors declared a quarterly cash dividend of $0.25 per share, payable on January 29, 2021 to shareholders of record as of the close of business on January 15, 2021. The Company has paid dividends every quarter since it became publicly owned in 1960.Fiscal 2020 OutlookDue to the significant uncertainty created by the COVID-19 pandemic, the Company is not providing a financial outlook for fiscal 2020.Conference CallThe Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live webcast of the conference call will be available on the Company’s website at www.oxfordinc.com. A replay of the webcast will be available on the Company’s website and will also be available by telephone through December 23, 2020 by dialing (412) 317-6671 access code 13713066.About OxfordOxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama®, Lilly Pulitzer® and Southern Tide® lifestyle brands, as well as other owned brands. Oxford also produces certain licensed and private label apparel products in its Lanier Apparel business. Oxford’s stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford’s website at www.oxfordinc.com.Basis of PresentationAll per share information is presented on a diluted basis.Non-GAAP Financial InformationThe Company reports its consolidated financial statements in accordance with generally accepted accounting principles (GAAP). To supplement these consolidated financial results, management believes that a presentation and discussion of certain financial measures on an adjusted basis, which exclude certain non-operating or discrete gains, charges or other items, may provide a more meaningful basis on which investors may compare the Company’s ongoing results of operations between periods. These measures include adjusted earnings, adjusted earnings per share, adjusted gross profit, adjusted gross margin, adjusted SG&A, and adjusted operating income, among others.Management uses these non-GAAP financial measures in making financial, operational and planning decisions to evaluate the Company’s ongoing performance. Management also uses these adjusted financial measures to discuss its business with investment and other financial institutions, its board of directors and others. Reconciliations of these adjusted measures to the most directly comparable financial measures calculated in accordance with GAAP are presented in tables included at the end of this release.Safe HarborThis press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which typically are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, the impact of the current coronavirus (COVID-19) pandemic, including uncertainties about its depth and duration (including resurgence), future store closures or other restrictions (including reduced hours and capacity) due to government mandates, and the effectiveness of store re-openings and reduction initiatives (including our ability to effectively renegotiate rent obligations), any or all of which may affect many of the following risks; demand for our products, which may be impacted by competitive conditions and/or evolving consumer shopping patterns; macroeconomic factors that may impact consumer discretionary spending for apparel and related products; the impact of any restructuring initiatives we may undertake in one or more of our business lines, including the process, timing, costs, uncertainties and effects of our announced exit of the Lanier Apparel business; costs of products as well as the raw materials used in those products; expected pricing levels; costs of labor; the timing of shipments requested by our wholesale customers; expected outcomes of pending or potential litigation and regulatory actions; changes in international, federal or state tax, trade and other laws and regulations, including the potential imposition of additional duties; the ability of business partners, including suppliers, vendors, licensees and landlords, to meet their obligations to us and/or continue our business relationship to the same degree in light of current or future financial stress, staffing shortages, liquidity challenges and/or bankruptcy filings exacerbated by the pandemic; weather; fluctuations and volatility in global financial markets; retention of and disciplined execution by key management; the timing and cost of store and restaurant openings and remodels, technology implementations and other capital expenditures; acquisition and disposition activities, including our ability to timely recognize expected synergies from acquisitions; access to capital and/or credit markets; the impact of the CARES Act and other legislation; changes in accounting standards and related guidance; and factors that could affect our consolidated effective tax rate, including estimated Fiscal 2020 taxable losses eligible for carry back to pre-U.S. Tax Reform periods. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. contained in our Annual Report on Form 10-K for the period ended February 1, 2020 under the heading “Risk Factors” and those described from time to time in our future reports filed with the SEC, including our Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2020. You should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
