Oxford Industries (OXM) 28 Mar 242024 Q4 Earnings call transcript

Good day, and welcome to the Oxford Industries, Inc. Fourth Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Brian Smith. ahead. go Please

good and Thank afternoon. you,

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

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

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

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

you thank for and afternoon, Good us. joining

pleased we during strongest exceeding growth 'XX are also period the annual which annual our caps history. X-year XXXX with conclusion compound second We which FY of results of adjusted earnings the XX%. XX-year represent fiscal for The in our delivered end EPS a

and almost outstanding our repurchases and our invest in share in and dividend from acquisitions, of growth million to XXXX, debt. strong opportunistic pay fiscal allowing flow cash addition, organic to quarterly us our down shareholders return capital generated all operations we In via both $XXX

value and will for an to shareholder the come. to growth that deliver sustained believe update On recent profitable today's we and for planned XXXX we'll our initiatives we drive us on fiscal to position have walk provide many performance long-term years through call, continue

Experience choppy, our has fiscal than we fundamentals terms totaling the and what for where items as low during year, up softness this, was demand have the comps result, full the itself are adjusted for business. continued consumers our of materially we into apparel, billion in their new softer February best both comping forecast, end last a that the and near-term shown consumer believe $X.XXX when expected, to where plan strong it positive that was as per the and reflective pandemic. the of of to sentiment years times is year. In consumer which during of somewhat we coming have bit business much who remains yet is opportunity in fairly earnings below ability exactly are foundation, spending in and it such strengthening to us focused our the our cycled indicators the share We a stay March, prior actually X in the cautious being spend more core long-term but the XXXX is the $XX.XX. double-digit at up of in to how created manifesting fiscal XXXX. to as a is are have sales muted on fiscal X discretionary and with fashion that at experienced The of and on sentiment down is like is strong do came eased, comparisons economic and quarter February January modestly fiscal In year and wrapped year January as The was has positive. choppiness unusual we we situation picked month-to-date, the business also most fourth

differentiated new efforts to our have reason fresh, First, the a to on open consumer will double wallet. gives we her sure we product down that make good that

of make maintain messaging we elevated, Second, we representative that is our and optimistic the brands. happy of each sure will

that channels Third, use we try And make sure including customer make own bars wholesale creative we we making our brand websites, will e-commerce to to communicate to to will stores, sure are our she customer. messages where that available and media wants the in product being accounts. the and when and it, diversified our are our restaurants that finally, we and we the

touch Across business. all are fundamentals. grow our we for biggest and are Tommy In Bahama, to hospitality X on each there these that planned fiscal develop our of brand, focused brands, initiatives XXXX our continuing on

full dream in And complete Tommy customers, mind. annual and that it of in acquire Tommy New our helps of including upscale, unique Bahama Bars success part increases way, the our the Marlin the our the brand. of is casual and evolve business retain customers bars helps Bahama the Resort, key restaurants is Miramonte hospitality service Hospitality the Our brand's that fast customer's guests. new and our existing a brand, spend

business have we Bahama business our margin significant stores bars, a years, square so Tommy of XX% has higher the success over mentioned women's the in foot direct-to-consumer by one now higher of the are our percent connected than and growing our the has women's average average. to in per business. a sales fleet a As part do in of our have than that to been fleet restaurant that uniformly last big Hospitality total of almost past, our grown women's several and

outside the fleet Antonio, X Both new of Marlin the include additions Winter during terrific of start. one efforts these are to which calendar XXXX in Florida, in year which Village in including new San February. La and Texas, in Park a off to opening one January opened opened Bars Our in Cantera

a marks the XXXX second the Community. Oaks Sarasota, of Four nation's City Mall underway price of of premier one to opportunity half anniversary, XXth and well malls, the SouthPark that believe more is assortments. Bars extremely of including the plans XXXX of Charlotte, planned celebrating has Oklahoma Florida the which The our Lakewood higher for Marlin in Exciting continuum Mall, are retailed collection for elevated Prussia expand capsule brand. additional one Pulitzer and anniversary which fiscal the we upscale in King are in the us the Lilly area's have Ranch priced, brand the makes including already

of a have exciting underway, already also collaborations of which launched. number We have several

On Styled a also Lilly beautiful produce collection collection Natalie's the an and Barn product and a done goods side, of Vogue we have Cruiser, Pottery America collaborative rolled Lilly Vogue's have collaboration Vogue a out wrapped a MOC Pulitzer banner. Mischka. of partnered print with capsule Badgley under Pulitzer media line home edition By content Resort Lilly Pulitzer to special Juice, exciting in

Pulitzer last up things customer. to quarters, events continue front, second and during On larger smaller year, first out and Lilly ago. focused of will we remains be first Lilly we quarter one second than ran first quarter that half, quarters delight a We a materially than than last the several mixing year. believe on such to the We last across that that it the year this promotional commercial the decision X lays albeit obtained to Pulitzer's the to differently the and surprise materially be year make for successful did expect

post delighted the In integration to fiscal most during Johnny we XXXX were activities acquisition. Was, complete

the part main operating this During XXXX, respectable We important and Last improvement expand marketing a in increasing the to the XX% effectiveness of level in an that ahead. efficiency objective of profitability be year, are grow it on long-term a we two XXXX Johnny our The Johnny value. about further on brand believe activities. and extremely and the to our focus ongoing of and we expect business. store can even shareholder enthusiastic plan years achieved elements Was remain Was this be improving of enhancing margin, will productivity our

end number we stores of during and our with our acquired a Tide Southern the of stores year. stores total the to a company-owned In Group, of Brands opened Emerging signature by starting XX Southern bringing Tide, XXXX, number the

during open is XXXX established A to have platforms. with performance both their store for across driving brands store least along We at plans one Bonnet Company. the fiscal retail priority for more Beaufort newly XXXX several

brand around pandemic the post-pandemic were to business. iconic Brands is well-known Jack iconic We are in is The the Rogers challenging an Rogers fiscal Emerging Group and Rogers late footwear a to years that brand added the delighted for based XXXX. Jack product. also Jack have

to and preparing inventory While be to in we going for earnings are up to XXXX, brand dilutive year this focus cleaning success Jack use slightly Rogers the and will brand, the future resetting on profitability.

get our us us consumers' excellent be that to of us allow allow initiative hands replenish distribution on long the which competitive portion more the markets do and inventory. our Finally, new product a allows hard community we business we on an during and much while to shipping costs. ultimately business. will able workforce Lyons' Lyons, have our house leverage this basis, ship should to Georgia, working less believe history to also the fiscal we and maintaining The all closer us enterprise-wide of faster our very large more This product our stores will will We allow in be there. center in more on to do quickly, highly XXXX in do we to of where state-of-the-art

and of that employ AI AI cases to to variety incremental plans of employ we use a effectiveness. explore we our expand in situations continue can and to We We have improve will Artificial across also efficiency our believe the use opportunities specific exciting already enterprise. to wide find Intelligence where

wholesale to the the year. led first result, above, our expect down As this persist retailers, has business many we the environment the our XXXX, outlined plans a the compared to quarter for for throughout brands our said, to first forecast wholesale meaningfully for caution we we strong That year. cautiousness among a year. of to have look each quarter as and to very consumer fiscal operating of of current The be course as we last in excellent expect

cadence minutes wholesale a Lilly we meaning full minute, for provide positive year's for quarter and on wholesale down basis ago which year-over-year Pulitzer the the detail first quarter the expect a balance that not year. a but offset results. will in change that be a weak first but below as fully first expect Scott year, decline, of in few will wholesale be more result decline last mentioned February, We be will materially to the slightly I quarter partially the the of in to the we the

pressure the inflation modestly well the the margins top stores, are that growth up mid-single-digit expect to we we will line at as new while From we a in headwinds line future. Marlin offsetting making investments some experience year, categories to due other profitability across the Bars standpoint, full and be expense as I and have will SG&A effects of with stores outlined. comps new slightly, positive the For flat the gross

with forged our we We are Most very life that have we amazing brands proud of the of every of day. the and all, customers. of of we've proud team that to strong portfolio incredibly the them built are people bring connections

that delivering on long are plans while for on and targets fundamentals As on additional always, initiatives over over we for now I'll color focused turn call staying XXXX. the Scott? Scott strengthen our to will the brands near-term the and committed business to our our term. XXXX

Thank you, Tom.

mentioned, the for both line Tom and our X% As to we top full year results for going our positive quarter year and comps fourth the respectively. fiscal groups adjusted results could report bottom and solid range from and they Despite fiscal operating consumer focused what of a full pleased DTC fourth 'XX, facing delivered within challenging headwinds quarter environment, on XXXX. are XX% control and guidance against

of relatively sales during million fiscal week, approximate XXXX. sales million we In an net XXXX, which an our profit. In and growth especially of aggregate, Full all includes for XXXX. Bahama, an of wholesale for flat Lilly Was, to of price XXrd The the $XX also XX X% bricks with channels mortar increase year, increases distribution million and full gross channel. in X% the $X.XX Brands $XXX consolidated have strong X% full and in XXXX $XX in XX% XX billion, compared including the benefit delivered Johnny delivered from in grew of price sales growth additional weeks Pulitzer Tommy resulting net Emerging owned price were that across e-commerce to results difficult restaurants in most

of and for consumers outlets e-commerce Additionally, in we the Lilly our deals benefiting sales, both Pulitzer and also in from X% had increases in promotions. looking sales flat X%

offset freight increase sales by to margin a points from increased margin XX%, by in meaningfully partially we gross were to year while The gross adjusted Johnny inventory markdowns expand were was to Was, The million at approximately lowering $XX Tommy SG&A decreased incremental addition able These increase, In XX balances. the also full from year Pulitzer. higher with were million promotional XXrd full of $XXX and million basis sales, costs. or margin of decrease a Was. inventory to driven Johnny in sales adjusted also due increased a total $XXX week. both compared last XXXX Bahama SG&A Adjusted XX% approximately SG&A expenses million of of Lilly and from $XX year the includes to

we expenses expanded incurred to to advertising and costs deployment store other costs, footprint. XXXX, and higher growth increased variable our costs During related support sales costs,

of Result this of a growth adjusted investments people income and outpacing XXXX. to SG&A planned operating margin $XXX XX.X% growth $XXX in yielded and or adjusted business our The XX.X% income compared reflects million operating million operating or decrease in in revenue. in

from income resulting the Resort to We in Tommy losses Bahama licensing also incurred partners. saw and declines modest income our from Miramonte royalty start-up lower related

income, higher a we adjusted incurred debt solidly but our With EPS, $XX.XX benefited higher slightly and operating rate. rates achieved average expense interest of result more effective range. as lower adjusted all interest this, a within we from of Moving levels, tax beyond guidance

XXXX, The In concluded connection charge annual and Was our of believes fuel exceed Johnny that impairment performed trade impairment Johnny our prolonged values impairment challenges the prospects the did million. test of fourth despite reflects carrying respective the fiscal and indefinite-lived the business a expenses. of business Management to diligently we $XXX manage these all ways charge resulting not macroeconomic goodwill XXXX, Was are long-term intangible into looking brands name goodwill values, and by in in acquisition Johnny faced in assets their of and and for in health the total quarter growth fair significant subsequent September and interest our rates. to strongly of increase this challenges Was in with

I'll now with balance sheet, move inventory. beginning on to our

$XX a During to by or basis. XX% were decrease FIFO XXXX, year-over-year able on inventories we million

of in liquidity significantly our our of margin, built noted a acquisition. the Johnny The the were to the that previously supply to under $XX million as gross chains being as our robust We year. used $XX into repay of down with to earlier. adjusted While able in incremental resulted resolved finished borrowings standpoint, credit flows used million revolving Was discipline XXXX fund to mitigate we beginning our well of as million disruptions from From our reduction largely cash inventory expand $XXX from facility, at borrowings borrowings decrease inventories XXXX. continued XXXX in inventory potential

million outstanding in $XX $XXX while Rogers flow $XX acquisition and million Jack allowed former share $XX from stores. of in of operations Our of expenditures to Tide repurchases signature capital dividends, for of XXXX million million Southern of compared cash funding debt $XXX XXXX million us acquisition-related reduce X the of expenditures, $XX and to million also

our on I'll now for time XXXX. spend some outlook

XXXX plan compared Pulitzer growth $X.XX includes year, and and increased full food be XXXX. consists growth channel to X% low of for to mid-single-digit we $X.XX billion, billion Tommy net Johnny brick-and-mortar, sales The the growth in The $X.XX full-price For range sales outlets. to Emerging in X% all billion range beverage expect sales and Brands. between of growth the Lilly double-digit brands and Bahama e-commerce for and Was and growth growth, with in in of in

of the partially gross sales growth is offset price proportion to and to the expected lower margin increased due in Bars. well in with primarily investments in gross increase and XXXX, new all including rate sales. in reductions sales and proportion including will in sales expectation lower quarter approximately in We in as grow to by XXXX, a X be opening sales expected and in of higher are than higher direct-to-consumer a wholesale sales than technology expect locations which marketing the additional by improved XXXX of year. These slightly SG&A, at and first to brick-and-mortar offset remainder anticipate investments $XX people, Marlin wholesale for full-price in direct-to-consumer wholesale higher as be XXXX margins of the with challenged XXXX, million modest We information

brick-and-mortar by locations. to net approximately count Our is increase expected XX

fourth XXXX. mentioned, acquired brand of Rogers the Tom the we in quarter Jack As

to opportunity happy, there presence We've and where that iconic with footwear lifestyle We excited our into the diligently is product for this the are a this space in natural category. an differentiated to portfolio our right brands. believe are and expand iconic add looked brand fit, stable

While reset business. the believe and we in to potential the we the brand, the we generate $X of loss XXXX as do an brand operating expect in approximately million refocus of

Miramonte the expense of primarily income, full interest for million and anticipate at XXXX to Additionally, $X a royalty the year higher million Bahama Tommy year we from lower Resort. $X in other and compared

We also recur to to XXXX, favorable XXXX. XX% XX% rate items expect a certain benefited expected compared in not from approximately tax which are effective higher adjusted of that in

being from and first $X.XX year, the $XXX Considering we to tax and all levels, sales operating to a in start in expense of XXXX adjusted year higher followed businesses, promotional expect the XX% the by million trends XXXX first February successful slow EPS the event rate of items, and and a off in nonanniversary improving in in Pulitzer and quarter quarter XXXX businesses the direct-to-consumer effective Lilly first XXXX. to between interest adjusted in primarily driven the partially decline and income. $XX decreases by royalty $XXX in $XX is first last that decline softness The of of quarter to EPS expect continued offset compared versus in by quarter expected In million million compared the with decrease the to due our million lower of of wholesale first of and of in channel, modestly a sales to these margin XXXX, will we in million $XXX expect between $XX.XX our sales higher of XXXX be other $X.XX quarter that March.

of factors other SG&A of some Many and million expense include affect lower first the quarter. approximately deleveraging margin, results flat driving the interest $X gross our will

rate be quarter and quarter XXXX. Expanding do the I'd tax like this the to related with approximately $X.XX a capital of fiscal intend expenditures to expect result make the $X.XX expected investments Lyons, effective discuss with approximately between XX% the in of Although outlook to in to our be adjusted on of our compared we $X.XX first quarter Capital in EPS to of first throughput XXXX, million in first to we compared we and consistent expect significant to new expenditure $XXX XXXX the approximately for million center to are multiyear XXXX. $XX project XXXX, build briefly distribution in $XXX capabilities Georgia million our to fiscal direct-to-consumer brands. in to XXXX. enhance

the in on relate Remaining across Johnny investments Was technology store and Pulitzer, to Bahama, increases Bars, and in our system pipeline direct-to-consumer Tommy execution to Marlin various Southern Tide fiscal of capital our initiatives. Lilly XXXX, X expected expenditures including open in count increased

capital elevated and this expenditure expect beyond. moderate to level We XXXX in

We strong, liquidity mentioned our and our X% room also us previously operations outlook well. quarterly ample the are today, will time giving to fund to and your position very Betsy? for the turn a have Cash and dividend. questions. increase cash a on to from expected now positive we be investments call as flows for Thanks

Stichter Instructions] from question [Operator today first The with Janine comes BTIG.

the played on you March. curious think on what consumer any bit more weather I'm color was saw I role for February Thank into hoping and brand. you health the any you the and improvement by into also consumer. and you what's driving could saw March? the curious variance I'm January a state if of little if elaborate of you all the the in

today. Janine, the question, the for call for on thanks and being you thank Well,

in and were January but just There variations impact everybody about among that, a did softness, probably was was sentiment As bit believe and weather we where some we outlined some on and said, really willingness think it to the brands, in comments. I saw it in we have the are the February. they soft spend as little consumer but and more their

difficult we're very going from against year. comps We the also -- prior

comps very the strong year both had January So February and a ago.

started so moderating year the the we're and comps think in going comps March forward. we against And toughest of

positive optimistic the for we're that very modestly. although still So year, we comp can

been side on you're talked with understand, want QX about thinking just thinking then that's how before. about the from being to just how is and you you and pretty And that Great. in positive if consistent wholesale QX. in seeing in I if down wholesale it? just wholesale then it I'm curious things, any of tone about been to similar partners? you've had your change Or turning

now. I think I've been pretty cautious for while a

look it of good maybe part wholesale back they've than think would we're those us most But been is this good. a latter more actually news, give I that pretty how we Janine, -- performance majors of floor. we data, is year. quite thought strong. at feedback in on our have From cautious quite the that the the is on accounts And those the good numbers get performing actually little

losing at believe, all. over position we that any term, the So not longer we're

get we're about fact, a we In our are optimistic the outperforming overall that performance more floor and that our little their will peers get retailers for the in where currently. as business rewarded on they

these complete the didn't case post were least is optimistic. what caution were when don't plan, lot were it. getting supply a vendors all going know issues, on And portion and maybe of I days. pretty chain to get but have We going on most that pandemic, about is much inventories shipping inventory but also they And of get bit, to time at business. bit the they thing this period of they going We they you are that their I we a little because in because I sort it think might last also get of line, or think would in-season the talk were in and retailers a then -- are what's lot, a there the a tell of buying was little in a back we are over that where really they just

sort that stock going on. of of less there's safety So buying

probably we're short-term think losing stronger a fact, in in And think ground we in really So blip, getting arena. We we're Janine. wholesale. don't view this that we as

was very quarter And last first Janine, year, strong wholesale quarter for a us.

the were in we of where trend QX last bucking the we're industry think year. in I kind actually up

against strong going again, of us. wholesale year a before are, we period the for So

next with comes UBS. from question The Mauricio Serna

more the trend. wanted bit to on get detail quarterly Just a little

are promotions? March mentioned Any the DTC a could implied you expectations potentially be You on February bit on your like a got Rogers what brand, operating maybe profit, then the soft, think of full if about about what overview about brand? to better. what more comp That -- the just impact comp about tell that buy maybe the guidance helpful. talked top line? you And talked the you us the You is is the business? tell how for trending? started And sale? you you about sales about lastly, but you the elaborate Jack size what little shift. then gross prompted acquisition, the will drivers DTC being very margin Anything could the Maybe quarter-to-date, year us expectations, the sales And your positive sales mix can

about Well, I'll the classic so, they're range. sort a start business one East known time. in time, Onassis, Lilly this Rogers Rogers. very Lilly I for as well 'XX as was Jack maybe brand, of far in staple XXXX, born Jackie It's Jack 'XX a to same that They right 'XX popular Coast a long a people Yes. born in great for around was, of very, in Palm very Rogers up about have was long know. Like I time And single order Jackie believe, been was later ladies 'XX, as a for. with with Mauricio. that we they've was time, $XX or sandal refer is brand. the Beach, Pulitzer, plus been Jack dressing at classic that at it At long, think, It million time. reverse Kennedy

and it issues and positioning little with post-pandemic changes rough all pandemic, their of that of went the probably a happened sort sort the customer. a on of even to course, management they've and in leading pandemic the through the During period that, but the iconic of number still held with to a with up

got it needs it. where There's And but some mostly little year to back of cleaned point, we go DNA, to sort to that reset, actually do go And it take bought we this this a going so, needs roots. to at reset back of the a need time we've to a at -- that inventory up we're its to bit marketing. its do core

during I the going will think do bit And loss, be think somewhere from outlined, there revenue, good comp in that in operating we'll range. then assumptions we asked little shape think but for in And quite I then build also this not of we'll year, business a Scott -- an million would about to have but $XX forward. I year? you the as

Yes.

strong started early comp. First bit. Last really off, February, weaken then we But seeing March, February was robust year, very and we had down low double strong digits. again, going a a it against

in we're March, So digits very we're low double February. up down modestly.

We modest March comp, positive have very is but month. a a bigger

down, in quarter-to-date, but trending the think mid-single I we're digits So direction. right

the the positive we year, overly year, the still come on side. slightly robust for we're for And expecting so comp, can, think but we out not an

Great. And of promotions? in terms

Yes.

And in to noted of be healthy reflect year whole a margin to prepared we more flat we product. That's discounting business. change, but remarks, I for very also the our gross the As mostly a doesn't that's up a in it think expect mix lot driven slightly. by sign

The Markets. Ashley KeyBanc next with question Capital from Owens comes

we're Lilly about already, as bit into there promotions that the how XQ. thinking seeing calendar just you're focus but and little a to a about relative? I the shifts about and guess some curious I'm bit from talked little the start, to just of you kind of in promotions XQ We talked

kind for So planning of hear your to shaking how I for material and any curious shifts? other that's brands would if you're just be out

sometimes off shift. hangover to And in it year, And get you believe event of XX% better the that generated was a while because off it first a the would is we believe everything. biggest last maybe think I after be do we Lilly of lot And quarter. little bit it. not we did that a it a revenue,

going year. up do So be and mix to product to Sales, will it do event we always Lilly them as season that Which is. we're that -- going little will limited this bit. a but Flash But not we're prior

with being timing QX events QX, -- and just or. more there'll biggest bit we events be a QX So less year Yes. value where had less than QX probably between in then and changes dollar some little last the

the biggest that's change. So

Friends promo very side do & a else, with I to type do I promotional times then think couple sales. this everywhere year. year, plan exact limited end-of-season cards those a their much it's again things basically Tommy their their think and does is they event twice year, And events. typical they and of pretty Family this do a a flip

Great. color guess, up Okay. of that. but of a to going into guidance on follow and also from then XQ, just shifts lot on kind Again, kind And I XQ. of that

when So moving kind top could shaping the we're in just the any be thinking pieces the the we some about you of remainder line help the there as helpful? for that we're the provide would year, on guide factoring overall move of through of seeing

quarter quarter down. single a each at be first QX Qs X where bit wholesale, digits. digits but up to X expect double forward being double for to the high -- to anywhere expect low we least a from going weaker. again, little, up maybe -- for be top wholesale for mid-single through actually will And to at more would be We Or line right this

were had help So not then will negative big that repeat going in a the again, that February. having bit. as quite And expect to We don't conflict we against. comps that

of as the as we the comp. rest the year, February think, are not For difficult

in every quarter expect we going sales forward. think we growth So

[Operator the closing any back for session. like would Instructions] to conference over concludes our Chubb I Tom to This question-and-answer turn remarks.

of look to interest today, look we you hope we'll Thanks again you all I talking your forward and for to your then, seeing well, attention stay and you to you there. June. And until and in forward

today's Thank The attending presentation. conference concluded. for has now you

You now may disconnect.