Sales drop at Oxford Apparel
Oxford Industries Inc announced financial results for its fiscal 2009 first quarter ended May 2, 2009. Consolidated net sales were $216.7 million compared to $272.9 million in the first quarter of fiscal 2008. Diluted net earnings per common share were $0.42 compared to $0.59 in the first quarter of fiscal 2008.
J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries, Inc., commented, "Despite reduced consumer demand for discretionary items, including apparel, Oxford is solidly profitable and we expect to continue to generate substantial cash flow from operations. We remain confident that our fundamental strategy is on target and will allow us to generate excellent financial returns as conditions in our markets improve."
Mr. Lanier continued, "For the first quarter of this year, we reduced SG&A by over 20% from $99.6 million to $78.7 million. We also reduced inventories from $122.7 million at the end of the first quarter last year to $103.3 million as of May 2, 2009. At the same time we have maintained the integrity of our Tommy Bahama and Ben Sherman brands and believe that we have strengthened the position of each in its core market. Additionally, our legacy businesses have performed quite well and are clearly showing the benefits of the restructuring efforts we initiated prior to the downturn in market conditions."
Tommy Bahama reported net sales of $98.4 million for the first quarter of fiscal 2009 compared to $129.3 million in the first quarter of fiscal 2008. The decrease in net sales was primarily due to the impact of the difficult retail environment on both sales at wholesale and in its owned retail stores. Tommy Bahama's operating income for the first quarter was $12.3 million compared to $19.5 million in the first quarter of 2008. The decrease in operating income was due to lower sales and lower royalty income. However, Tommy Bahama was able to mitigate the impact of lower sales with improved gross margins and lower SG&A.
Ben Sherman reported net sales of $24.2 million for the first quarter of fiscal 2009 compared to $36.6 million in the first quarter of 2008. Ben Sherman reported an operating loss of $2.0 million in the first quarter compared to operating income of $0.3 million in the first quarter of 2008.
The decrease in net sales and operating income was primarily due to the 26% reduction in the average exchange rate of the British pound versus the United States dollar coupled with challenging consumer market conditions in the United Kingdom. Because the majority of Ben Sherman's inventory purchases are denominated in United States dollars, while Ben Sherman's sales are primarily in other currencies, the currency fluctuation negatively impacted Ben Sherman's gross margins. The lower margins were partially offset by reductions in SG&A.
Net sales for Lanier Clothes were $31.5 million in the first quarter of fiscal 2009 compared to $38.7 million in the first quarter of fiscal 2008. For the quarter, Lanier Clothes reported operating income of $2.7 million compared to breakeven results in the first quarter of fiscal 2008. The reduced sales and improved profitability resulted from Lanier Clothes' exit from the Nautica and Oscar de la Renta businesses and restructuring of the Arnold Brant business as well as initiatives to reduce overhead.