Oxford Industries is the latest casualty of the macroeconomic headwinds — and volatile weather patterns — as the Atlanta-based owner of Tommy Bahama, Lilly Pulitzer and Johnny Was slipped into the red in the third quarter.
In the period ended Nov. 2, the company reported an operating loss of $6 million, compared to operating income of $14 million in the same period the prior year. On an adjusted basis, operating income decreased to a loss of $3 million compared to operating income of $21 million in the third quarter of fiscal 2023. The company attributed the drop to “decreased net sales and increased SG&A as the company continues to invest in the business.”
SG&A was higher this year, reaching $205 million, up from $195 million last year, due primarily to the opening of 33 new stores — including four Tommy Bahama Marlin Bars — since the third quarter of fiscal 2023. Four additional stores are planned for the fourth quarter including two Marlin Bars.
Consolidated net sales fell to $308 million from $327 million in the prior-year period. Full-price direct-to-consumer sales decreased 8 percent to $200 million, full-price retail sales dipped 6 percent to $99 million and e-commerce sales dropped 11 percent to $101 million. Outlet sales inched up 3 percent to $17 million. Wholesale sales were 2 percent lower in the period, falling to $67 million.
By division, sales dropped the most at Lilly Pulitzer, falling to $69.8 million, 8.5 percent lower than the prior year. Sales at Johnny Was fell 6.1 percent to $46.1 million and 5.2 percent at Tommy Bahama to $161.3 million. The emerging brands division, which includes Southern Tide, Duckhead and others, fell 1 percent to $30.9 million.
As a result, the company revised its sales and earnings-per-share guidance for the fiscal year and now expects net sales in a range of $1.50 billion to $1.52 billion as compared to $1.57 billion in fiscal 2023. GAAP EPS is expected to be between $5.78 and $5.98, compared to GAAP EPS of $3.82 in fiscal 2023. Adjusted EPS is expected to be between $6.50 and $6.70, compared to fiscal 2023 adjusted EPS of $10.15.
For the fourth quarter of fiscal 2024, the company expects net sales to be between $375 million and $395 million, compared to net sales of $404 million in the fourth quarter of fiscal 2023. GAAP EPS is expected to be between $1.02 and $1.22 compared to a GAAP loss per share of $3.85 in the fourth quarter of fiscal 2023 that included noncash impairment charges totaling $114 million, or $5.31 per share. Adjusted EPS is expected to be between $1.18 and $1.38 compared to adjusted EPS of $1.90 in the fourth quarter of fiscal 2023.
Despite the rough waters, Tom Chubb, chairman and chief executive officer, sees brighter skies in the future. “Following a difficult third quarter, we are pleased with the beginning of the holiday season now that some recent headwinds have started to abate,” he said. “The cumulative effects of several years of high inflation combined with distractions from the U.S. elections and other world events led to less frequent and more tentative consumer spending behavior during the third quarter which is traditionally our smallest-volume quarter of the year. Additionally, our most significant and important market, the Southeastern United States, was impacted by two major hurricanes in quick succession that resulted in estimated lost sales of $4 million and an estimated impact of 14 cents per share. When combined with a highly competitive and promotional environment, these headwinds led to financial performance that was weaker than expected.”
However, Chubb said consumers “have responded favorably to our recent product introductions and marketing campaigns, driving a nice improvement in comp-store trends once the holiday season got underway. However, due to the weaker than expected consumer environment before the election and the fourth-quarter impact of the hurricanes, which we project will include an additional $3 million of lost revenue and 11 cents per share, we have lowered our fiscal 2024 sales and EPS guidance. We are confident that our business model will drive profitable growth and long-term shareholder value well into the future. We could not do this without our exceptional team of people, to whom we extend our sincere gratitude.”
