Oxford Industries (OXM) 2 Sep 222022 Q2 Earnings call transcript

Greetings, welcome to the Oxford Industries, Inc., Second Quarter Fiscal 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Jevon Strasser. you. Thank

begin. may You

good and afternoon. you Thank

statements I Before that Q&A to of forward-looking participants like statements we session federal made laws. constitute the begin, certain in on remind and meaning would today's securities the within may the call

in guarantees, cause not results actual operations condition our actual expressed results XX-K. press documents SEC, update our discussed are from no release with statements. factors Important today and duty statements. to may by issued the financial implied the of filed in statements forward-looking in including materially differ factors contained those earlier us and in We to Forward-looking risk the differ forward-looking the any or that Form are could or undertake

discussing be financial During we certain this will measures. non-GAAP call,

non-GAAP And a Investor GAAP to today turn I'd Tom press is Chairman And over find for today's in our today, call COO. of I'd CFO website. issued are you the Tom Chubb. introduce posted Chubb, to and call participants. under can our measures to and like now Scott reconciliation release your of now, financial Thank earlier which like attention. and Grassmyer, the me With tab to Relations CEO; You

us. and afternoon you Good for thank joining

to consecutive record hard work, team and all possible their commentary have none. enabled reporting would our Scott every of incredibly provide detailed results us a quarter I quarter each to to member like are will pleased We follow. that of deliver to earnings. be outstanding XXXX. from not for quarter team thank fiscal we dedicated the are more an to without and sixth with I strong is of of second our some of Outstanding people, which highlights second

and experiences quarter of the conditions our retail, expansion our continued work margin. During the in consumer the and XX% return in products social the healthy direct-to-consumer to events, sales brands, and growth continued already continued key included physical continued market during leisure strength of fueled the and of many growth in-person the comparable customer return the gross the our of quarter, our in our markets, to population travel. Favorable rebound year-round

modest restaurants all in Island our which relevant wholesale carefully experiences life and Live million. increased quarter bars X% factors, of unabated selected strength increase exceptional $XXX and are gross year, well this the to to or sales. the record $X.XX. largest operating contributor success our gross our and expanded and profit the the operating to of increased year. and $XX sales Compared for sales these inspirational Bahama. EPS or today's of risk partners. brands, of XX.X% These the basis XX% adjusted of to grew expanded message, that an brings customer margin we second last to quarter which $X.XX, continue beautiful, the balance last our an Adjusted to creative XX.X% XX%. portfolio margin million for of performance was than the to adjusted differentiated marketplace XX.X% versus XX% results and recorded million our quarter to of All was our spectacular. messaging website Adjusted our which year's second team basis Life On through $XXX brand at augur adjusted Tommy with to basis, on to an by expectations brand of through The starts earnings and products record delivering consumer EPS through our of XXXX our stores, exceeded XX consolidated points XXX sounding powerful brand, that play biggest over points and margin of and wonderful The

our return portfolio. people the to to What benefit social to obvious of market ago, for in-person possibly minute and leisure migration events. a so vacation is travel and noted are As The obvious are we advantages climates permanent work less many from much the and return strength warmer how conditions us. to of playing is

stretch, Bahama for and and our notable also both very teas, couple and of is of comfort colorful assortment look menswear, a for. feature is shirts luxurious Bahama shorts include A the present Tommy of stretch for a in that camp St. While the polos, the wide-variety long go-to social appropriate most sleeve long famous that shirts of have polished of and and high everyday Tommy our we post-pandemic shirts, also pants Sarasota and woven long-sleeve famous events. degree which powerful fabrics the swimwear, workplaces are a Lucia

recently, developments our exciting years shorts, last the the we which merchandising business. of have Par side Shot and added even and More popularity quickly guests, Chip most extended and the pants, couple Tommy IslandZone our flat in the men's and with pocket Bahama of the pockets On growth have has pant started strength over we performance been performance One gained the the women's. performance pants. Chino It jeans, Boracay with into front of five

for again. over refresh come and been have does, to pant contraction we retail on channels, with it challenges hallmark inventory that which other a due saw e-commerce. products whether distribution. front. to always has back can the pant are those some we team building sales it drive guy in a more, the second of and product marketing All will areas in show we a effort he in them to purchase evolving marketplace about for is finds This and who him chance or and They to tend improve agency a and transition landscape. Pulitzer office go incredible guest love. wholesale driven some growth is faced suppressed increase was healthy This he be our business likes, to Once we a by time sales partnerships. edge, customers. digital a even to expectation as contraction line store solid the we our for temporary are over he our felt The we healthy the already We we is growth our posted And the that every quarter Lilly digital digital that pant of pants he examples our that A consumer for comp a to to margin. business, gains And results, where our issues that the temporary business. the increases long Lilly At the on today's impact tends primarily will some some repeat has brand top technology been excel. against keeping backdrop an even out an operating are the resonating XX% substantial What somewhat all Lilly modest all a of love of quarter, both in marketing leader to rapidly very marketing quarter. across marketing in flow second some in and created and is of new new digital was relevant implemented below impacted of marketing is channels our e-commerce the maintain that changed a of and business believe while dinner. these being out getting to of about that perfect headwinds

effective team August. in marketing Our made appropriate has quickly adjustments reacted and to approach our

strong past already with gift We seeing including changes, the weekend. over the of are a event purchase this benefit

ramp-up there impact benefit the and As we during be shape full quarter. some is to the expect fourth quarter period in see realized, before the excellent is third some should for

the product and excited ever remains to our finish the as as consumer made, brand the with about Lilly Our strong. have year changes we we expect and

Our Head The as was during three Southern efforts to part margin was this the EBG's address delivering that quarter impressive the an position. solid the an growth. for Company group group an during markdown in EBG growth our inventory the capabilities. the we driven omnichannel emerging Tide, XX% result in overbought took digital Duck year-over-year sales Beaufort of Gross operating to brands posted The Bonnet suppressed enhance by and quarter brands with gain second all and

to position could about have future for appropriate Company and with Duck we the continue allocation team. look progress expect with our planning Beaufort be Head to We growing our forward enterprise, term, our results have emerging to processes. long-term bullish deal long Southern enhancing not our omnichannel them fortify draw and to teams developing pillars: strategic worked portfolio, the the the Bonnet make brand outstanding inventory inventory and deliver opportunity and capital in buying and and we to excellent The second our an and Tide, half. managing We shareholder to more capabilities, the taken the our the for markdown Across long people operational excellence, value, digital towards brands

long-term to maximize program repurchase December $XX vehicle our $XX have execution the XXXX, XX our to initiating share, share shareholder plan Since already this continued to illustrates and in million the of we million an the value. enhancing $XX months. objective used of high returns in return shareholders, payments performance Our repurchasing from our per dividend stock last of price at average the

the aware of are third has of half early that the we the continued While we part of the quarter. some momentum in first headwinds, of the into macroeconomic year created the

much a ago. healthier in year than are we addition, were position a In inventory we

over with it for double-digit results first line in half operating the remainder for the top quarter second the excellent and Scott the deliver modest some should Scott? expansion year. position plans year. allow to inventory for more bottom to about of Our have I'll forecast outstanding the now and second turn results margin healthier growth we half, for us the our detail and

quarter Thank earlier. Tom you, the delivered second record well executed again as Tom. and once We during performance, mentioned

sales million. was last sales XXXX, strong an Tommy the distribution notable Bahama $XXX million, quarter all net in year's were Our sales second second fiscal increase and In of channels XX%. across quarter growth quarter sales XX% $XXX of consolidated over net by growth particularly driven

from in year-over-year. period, $X sales sales increased year Lanier of Excluding the XX% million prior Apparel

e-commerce Our up XX%. grew business full significantly, price

retail over well On comps last year. food bricks-and-mortar full-price and we of with as growth of healthy X% was the our locations generated plus XX%. beverage front, Performance

of XX emerging shift fiscal some approximately improvement basis to of direct-to-consumer point margin offerings. freight offset and sales in quarter and the margin IMUs, mix the channels by Our costs second XXXX. gross inventory XX adjusted group towards higher new basis points Higher fueled XX.X% within was a improvement. in XX.X% performance was brands markdowns full-price innovative compared in particularly This

XX% to XX.X% Tommy growth both Our $XX was Bahama. increased by operating or notable operating operating highlighted Tommy excellent of margin on an at This adjusted Lilly. with million net sales profit margins income and operating in basis

business balance sheet. is supported our Our by strong

highlights. some Here are

Our half in growth inventory and revenue increases inventory anticipated of Compared sales the the us well half an by XXXX Inventory our early receipt sales digits. on quarter XX% of after demand included end of or increased end the a decreased purchases. low of costs. levels higher product were fiscal stronger-than-expected on the $XX the inventory million on at to a for inventory delays the FIFO to X%. support XXXX optimal single calls of with fiscal than high lower inventory basis normalized end second $XX representing XXXX, plan basis, quarter mitigate FIFO Also, outpaced XXXX, to double second supply for execute rebound when which inventory in million to to balance the the or second in Inventory second basis positions of fiscal on increases XXXX, disruptions, consumer fiscal inventory of quarter fall XX, LIFO balances throughout of incremental compared million of a XXXX. chain a $XX level and the July at more to fiscal

in on While of XXXX. first compared were of XX-month fiscal the FIFO of turns to our crystallize second higher at of inventory, end XXXX the half inventory where To Xx first and in fiscal XXXX X.Xx trailing than XX% were the for sales are quarter half X.Xx the we the XXXX XXXX.

healthy position the cash short-term $XXX no at of the million with and quarter. investments Our second of end debt is liquidity and

repurchase Today, allowed representing X% we Our significant short-term multiple and million, our cash amount over us XXX,XXX return on a approaches invest December and of in since our Board's shareholders to the our have share sizable of of for $XX balance announcement repurchased cash to outstanding shares have approximately capital investments via still new flow authorization. shares sheet. our businesses,

As are pleased we the date. results Tom our repurchasing to with very noted, program of

capital over through $XX returned of the further investors have last to months. We dividends XX million

we the third through XXXX. to share you per I declared to and of Board for dividend our a for pleased of performance the of EPS forward, am for now quarter, Directors projections year. that guidance like our After $X.XX in Looking second I'd are raising outstanding our beat the share quarter. the remainder walk

a We for as robust to encouraging locations continue physical to to in shopping, to have expect forward expand. our e-commerce we business consumers to sales continue Also, book XXXX. in-store and seeing return continue our channel our comp order are wholesale very

margin we a For the somewhat partially continue still we to be by year, offset the benefits expect of see to higher expansion more expect modest what environment. promotional gross IMUs, as we

we a operating a Full together sales. to included we year, compared despite some margin Putting in double-digit of challenging driven SG&A fiscal leverage with XXXX, expansion a growth line including for in expect $X.X the bottom year now increase million the expected billion billion which range For deliver $X.XXX of full to year. significant dynamics, leverage, Apparel are Lanier QX to and pressures, sales these top $XX inflationary expect billion to $X.XXX cost market. by to labor modest

year, of fiscal full $X.XX fiscal XXXX. compared $XX.XX the to to adjusted expect the now EPS $X.XX in range we in For

expected substantial $X.XX million of compared modest mix Third million, year, are strong million a million $X we third EPS the spent increased third to lower of with the year. proportion quarter-to-date last gross in quarter, IMUs quarter our Apparel includes of similar gross the flash in clearance first anticipate $X.XX in $XXX to margin in expectation the included Pulitzer's $XXX of of the expected channels to by Lilly the as to expansion. wholesale as to quarter $XXX from costs two a offset our Lanier in direct-to-consumer e-commerce an expansion This increase reflective to of last planned quarters adjusted XXXX $X.XX quarter. higher partially year, an margin results which sales the sales of fiscal sales sales. range third we On some change freight and in quarter, of basis, range In well

the SG&A the smaller seasonality deleveraging the As but business often business in to the higher additional sales to continues due quarters in quarter, and third brands. growth during are also higher the quarters year year. earnings of leverage with and a the associated sales results growing our quarter expand, third for our reminder, lower in sales allows our earnings of SG&A the as Thus,

tax be for we effective fiscal and today, XXXX Our to rate time now call Thank over for questions. XX% expected Alex? and the between your for will is you XX%. turn

the we time, question Please first conducting a Sandler. Thank Yruma with question-and-answer question. [Operator line with session. Our Edward of you. At your proceed Piper this be will Instructions] comes from

think How price resistance? AUR, the tourist I previous Vegas, content A you kind wondering, me. talk some relative performing seeing then signs know And Las et of where do from couple raising follow-up, regions available? the is is for still strongly versus that peak? as I guess, cetera, any can are had if you've York, a of a you I of kind strategy of adding kind holistically more the Are more product. headroom first, to about much know some New of I was of your Hawaii, others you regions perspective. to and of

all a the of performed couple the you great by add you, have -- well. on I the that. Scott no it's York New sort recently, into area of Other the this for of other we product, you City. bar I where the would the California I in Thank to is product flattish even and laggards quarter. And in fully really, call been and have Great small we color the at York really of But store. in will, really the if kind just terms not then success regions and country to point AUR the of that Ed. city other were And to Tommy and not is than were that close has that, you've today, continue than Okay. some on New and raising big New restaurant. with sort back, have that's lagging, only suspect back, seeing the this. differentiation are always the fully features store There the definitely pockets City -- Bahama quite itself of we and York But regionality, comment really in in think that still increasing may to

think customer I delivering that as additional to long as the value we're them. perceives

room run add got we've please would, think you that. if I anything. Scott, plenty to on of And

Yes, price product, to the that existing items, we increases and are just is not resistance we're do seeing is cost also either. that in increases AURs to -- and seeing part we're put but took not we then really seeing resistance of more more our the off value higher price items into that and going we part out with on are

question King question. proceed with line of the & next your Associates. CL from comes with Steve Our Marotta Please

was in like that many Tom, dime turned early locations. of wondering consumer are in a traffic there late in behavior Was kind anything Did on brick-and-mortar consumers that? during months? May reporting any retailers I if and so discernable experience you other change those particularly June, to

really. Not

think, and you on. the real know great is going this. bifurcation student Steve, you're very I a industry, of a There

end the back by very all that's top in, So we those there. spending the pain really and as eye a is or people. moderate macro we've food picture, squeezed impacted really that. And social very more not housing and getting costs, XX% and than the all in but care bigger things. discretionary our recognize spectrum, their increases on we're feeling people going which We they're the lower are market more real health in or got But group, the That They're sympathetic prices, ago, has XX%. of discretionary going much play these to spending. to not in to more very out the from that that their part to And cutting of hard were income people a maybe nearly that by events, the gasoline time, very, been they empathetic about and travel real very the we're are the year costs, more getting be strong. leisure continues to two out office, inflation prices

All of play these strengths. really things to our

pivot since really quarter. the seen of really we didn't one see so end haven't And the the and

play of a very it's Our September started think I to. strong. great comp of a August And we And least, and the I our in then were is of out sales have we had our the very the we that add And a consumer not would strong. it, it customer part August just -- big products. last strength were And part We is brands by for named but deliver. of and example, course, outstanding experience today, major row. a there I news in Bahama our in deliver that teams five the stores. a years country retailer been that's those in year great Tommy because only proud service of second be as the magazine And in row the we we've of to we're experiences. top why that's they're there that the in the part ones think our in one of retailers customer two success, so part for our That's and of are and

spend, differently that? that were anything the during the were at prior pandemic, the pandemic, anything the on spend, for churn, began? in frequency they Congratulations either any than customers looked are lifetime active gained spend, that since In retention other Relatedly, pandemic have annual of average you honor. customers to that like acting customer words,

cohort those KPIs as improve. tell the you to was rule, during out customer I people times. more our see that that to to their separated continued that I we've all a added performance in normal don't have pandemic general what you, have I that tell versus will Steve, came know

It's we've have haven't But really team question them. We looked that just and that and though. at any might analytics found might customer good we I it. a can't gotten seen cohort the would separated -- degradation. have So, say they

thing, take Sure the balance I'll offline.

Okay. Thank you, Steve.

you, gentlemen. Thank Ladies and

your comes proceed with question from Our question. of Capital Please Markets. Noah next Zatzkin KeyBanc with the line

long-term the Tide your Southern thinking performance quarter. could of as about brands? you those opportunity Hoping for provide the from you're brands well during as on the quarter some emerging performance color during how Strong the

were through year was Tide heritage. sort got with proud there's finally, very done on front the Southern growing we're which their They we just performance. then wholesale, great job in the think group. as But there. that a got to going that brands e-commerce emerging we've which potential me, we're now, now continue that well six a perform great this had mixed the of a delivered We that But they e-commerce still marketing there, comments, for -- opportunity so a year-to-date. prepared mentioned We of I tremendous a their in quarter. lot open their with but And the on, then going company-owned digital not they they've experience, thought always and in and business, happy five of didn't get we've we've is the in also great early on to was stores, well Five realize more open very And them, there we've what much in believed that five business, own have retail open, them. up excuse sometimes. now. just yes

learning I single and Tide. better doing lot and better think a we're ourselves in at day retail getting Southern every

just a The the that we're multiple dollars two this a growing for open. millions you the other I point. exactly equally all. nicely yet. very emerging time long in Head of And And at So a it's business, as wholesale there. way. this like think when Tide in is retail then opportunity not rapidly brand there is too run are there great lot and brands, doesn't about actively Bonnet that line Beaufort million we still but Company business, what of I'm think long, I've stretch e-commerce a at the and of and own and giving yet the hundreds growing And brand Bonnet a e-commerce its a demographic retail Southern imagination terrific massive that significantly there's far But the Bonnet We brand think in does appealing wholesale of at this to, $XXX not I a term there's you And look it's longer the I idea at offering opportunity even can Southern we'll course, nice this seeing get we're there. then And trajectories, have future. stores foreseeable point of then got smaller a sites we're any as their and company-owned good has strong and looking couple not but additional Duck at Tide. and of feel business stores and earlier what them. for in well Beaufort retail Beaufort business has

In segment, the fastest segment an first EBG terms growth think come. in we potential be of will is And a while operating quarter. we did for the growing expect XX% it good our to would

Please the question Citi. next Our proceed question. your from with Paul of line with comes Lejuez

This Chatham] in filling is Paul. for [Brandon

wondering, you're promotional the second there. expecting environment of if around of out could a As that of you, kind you environment look the on at we glut kind kind seems expand of for apparel like half? Just there's it

to able environment? guidance seem bit promotional like for expecting kind inventory with do at you the you're dealing yourself that some of be And from to be the what other the moment? of of apparel players going then wondering, just to think is So quite a separate

Yes.

that you this over-inventoried a retailers of So lot led I lot is are Brandon, think at to you what's that and look point say, out there, at have promotion. are happening a what would if there traditionally, I of

the off and year I it, next they're it to going as call You where that a this time in hoteling dust put about it just and do have it talking warehouse few out. product, put are

long a and off. don't kind you are and we nonissue for that on is product, compete on I price There take retailers. little think that the that two tell would and compete really Brandon, not kinds might of play look brands in those on group. there is lot But be of our a and there what of brand And us. and are latter there'll that that is I in complete and But So can you, do what history we're But the in on going the at promotions I pressure game. marketplace. -- a world,

not our consumer peers you is proposition or the price can biggest see the our so with And competing lowest about the offer discount. to

proposition now. method strongest has brand for the that and offers who successfully years the very Our done that's very, we've that up. backs is what XX And product

for so, And example, bottom growth post And modest through said the year as expansion. do I'll think double-digit environment. and this And we Brandon. operating to be an we margin give come will top and you able we line

You can this in see another industry.

great you want price is going and brands. able price got price. if other they've car, can got the We've great a your look whole at The and And the willing the products. see position. Tesla. products, we're it. They pay. They've and at they're work you're get business go similar If I And would Then in that a don't tell you're and do got that. to The price places an product. on can negotiate example a to of of that differentiated you is basis. price, a the the you deal got do you couple you. guys Saturday Ford And price significantly you brand, you you We've Chevy spend price buying negotiating and to out those will if lower with

of loyal And us. customers Our to track tough a full-price we've very a got navigating and still are XX-year retailer. record markets being through

let on baked got I'll guidance. into what comment Scott we've Now,

-- but with little more It just will because got year, -- were last means than And on our We mean mainly gross we had very thing. levels, be promotions, margins, type more expect so will mentioned inventories but are inventory. level. it's we've promote. year's. that's we bigger we appropriate year, to some does Lilly's not feel This that be this lean a month appropriate that just flash Yes. product later expand last cell We to and higher we more bad and

low in prepared last a is compare more really an from to little promotional mentioned against will, the a events. we'll extremely But be It promotional. we we're remarks, the just it's market will the the -- going year due as more So we promotion standpoint. was through be was in-to-season clearance little mainly

Got headwinds. update the did that supply more, on some for it. And you the in It kind competitors of of What just sense. could, quarter? one back see alleviate? half Yes, any I seems are seeing chain of like second year? if expectations your makes are what your And

through improving where will, think do of normal, to whole a to we've chain, It's and the a still not port cost but the the Brandon got Scott, it both our over pre-pandemic love to that Brandon. in might in got there. you then, see then standpoint, in way better, from we've sort at from all freight foreign is some we'd the guidance. the warehouse if time, freight it's getting want tell it factory And And of I what you U.S. bit the

-- still Yes. close basis the in of it freight And points XXX lower than year, were this half, will be margin but headwind. year, considerably to freight got we're second last We we last year. some headwinds,

having our the due second four thing, little out a Another calendars last less end inventory we to at our merchant disruption did good we weeks. than books year. maybe think the you're we because mentioned I of a many and $XX did we our more had than was quarter, on adjust that merchandising fall we million calendars that at part fact the time we six to moved And of this contain that

little to So, them the think earlier we were navigated we've that. effectively of in that much product but Not more disruptions, market. that we've help I the some a than maybe alleviate been some accepting immune to

call I ladies questions I'm to queue. the seeing closing no further in will gentlemen, Tom now [Operator and for the remarks. Chubb turn over Instructions] And

early Stay attention in forward seeing Thank you, and and today. and look your Alex, thanks, everybody, you interest again we Okay. safe, December. for to your

may disconnect you Thank you and a your and wonderful conference, time. for lines have today's your day. this participation, concludes at This