ATLANTA, Sept. 01, 2022 (GLOBE NEWSWIRE) Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its fiscal 2022 second quarter ended July 30th, 2022.
Consolidated net sales in the second quarter of fiscal 2022 increased 11% to $363 million compared to $329 million in the second quarter of fiscal 2021. Earnings per share (EPS) on a GAAP basis increased to $3.49 compared to $3.05 in the second quarter of fiscal 2021. On an adjusted basis, EPS increased to $3.61 compared to $3.24 in the second quarter of fiscal 2021.
Tom Chubb, Chairman and CEO, commented, “We are extremely pleased to be reporting record earnings for the sixth consecutive quarter. The strength of our brands, our products and our customer experiences fueled 14% comparable direct-to-consumer sales growth and expansion of our already robust gross margin. Favorable market conditions during the quarter included the continued return of the consumer to physical retail, the return to in-person work and social events, the growth in year-round population in many of our strongest markets and the rebound in leisure travel. All of these factors, which play to the strength of our portfolio of brands, continue unabated and augur well for the balance of the year.”
Mr. Chubb concluded, “Outstanding results like these are only possible through the effort of outstanding people and we have a team that is second to none. We are grateful to each and every one of our associates for all that they do on behalf of our customers, our communities and in turn our shareholders.”
Second Quarter of Fiscal 2022 versus Fiscal 2021
Net Sales by Operating Group | Second Quarter | |||||
($ in millions) | 2022 | 2021 | % Change | |||
Tommy Bahama | $ | 244.0 | $ | 208.8 | 17 | % |
Lilly Pulitzer | 88.7 | 87.3 | 2 | % | ||
Emerging Brands | 29.9 | 22.8 | 31 | % | ||
Lanier Apparel (exited) | 0.0 | 8.5 | nm | |||
Other | 0.9 | 1.2 | nm | |||
Total Company | $ | 363.4 | $ | 328.7 | 11 | % |
Balance Sheet and Liquidity
Inventory increased $58 million on a LIFO basis and $71 million, or 53%, on a FIFO basis compared to the end of the second quarter of fiscal 2021. Inventory balances at July 30, 2022 represent a more normalized level after inventory levels were lower than optimal throughout fiscal 2021 when a stronger than expected rebound in consumer demand outpaced inventory purchases. Also, the inventory increase reflects: (i) the early receipt of an incremental $27 million of fall inventory to mitigate supply chain delays or disruptions, (ii) anticipated sales increases in the second half of fiscal 2022 and (iii) higher product costs. Compared to the end of the second quarter of fiscal 2019, on a FIFO basis inventory decreased by 3% while the sales for the first half of fiscal 2022 were 23% higher than the first half of fiscal 2019.
As of July 30, 2022, the Company had a strong liquidity position with $186 million of cash, cash equivalents and short-term investments versus $180 million at the end of the second quarter of fiscal 2021. The increase in cash and short-term investments was driven by strong operating cash flows which exceeded capital expenditures, share repurchases and dividend payments. The Company had no borrowings outstanding under its revolving credit agreement during either the second quarter of fiscal 2022 or fiscal 2021.
Dividend and Share Repurchase
The Board of Directors declared a quarterly cash dividend of $0.55 per share. The dividend is payable on October 28, 2022 to shareholders of record as of the close of business on October 14, 2022. The Company has paid dividends every quarter since it became publicly owned in 1960.
To date, the Company has repurchased approximately 970,000 shares, or over 5% of total shares outstanding, for $86 million at an average price of $89 per share under its December 7, 2021 $150 million share repurchase authorization and associated $100 million 10b5-1 trading plan. This consists of $8 million in the fourth quarter of 2021, $43 million in the first quarter of 2022, $30 million in the second quarter of 2022 and $5 million subsequent to quarter-end.
Outlook
For fiscal 2022, the Company raised its previously issued guidance. The Company now expects net sales in a range of $1.300 billion to $1.325 billion as compared to net sales of $1.142 billion in fiscal 2021. In fiscal 2022, GAAP EPS is expected to be between $9.68 and $9.93. Adjusted EPS is expected to be between $9.85 and $10.10. This compares to GAAP EPS of $7.78 and adjusted EPS of $7.99 in fiscal 2021.
The Company initiated its guidance for the third quarter of fiscal 2022, ending on October 29, 2022. The Company expects net sales to be between $270 million and $280 million compared to net sales of $248 million in the third quarter of fiscal 2021, which included $4 million of Lanier Apparel sales. Both GAAP and adjusted EPS are expected to be in a range of $0.90 to $1.05 in the third quarter. This compares with EPS of $1.54 on a GAAP basis and $1.19 on an adjusted basis in the third quarter of fiscal 2021. The Company’s third quarter remains its smallest sales and earnings quarter due to the seasonality of its direct-to-consumer operations.
The Company’s effective tax rate is expected to be between 24% and 25% for fiscal 2022.
Capital expenditures in fiscal 2022 are expected to be approximately $50 million, primarily reflecting investments in information technology initiatives, the development of new direct to consumer locations, including construction of a new Marlin Bar opening in 2023 in Palm Beach Gardens, and remodeling existing stores. Capital expenditures were $32 million in fiscal 2021.
About Oxford
Oxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama®, Lilly Pulitzer®, Southern Tide®, The Beaufort Bonnet Company® and Duck Head® lifestyle brands. Oxford's stock has traded on the New York Stock Exchange since 1964 under the symbol OXM.
Oxford Industries, Inc. | |||||||||
Consolidated Balance Sheets | |||||||||
(in thousands, except par amounts) | |||||||||
(unaudited) | |||||||||
July 30, | July 31, | ||||||||
2022 | 2021 | ||||||||
ASSETS | |||||||||
Current Assets | |||||||||
Cash and cash equivalents | $ | 31,269 | $ | 180,389 | |||||
Short-term investments | 154,754 | — | |||||||
Receivables, net | 50,757 | 48,522 | |||||||
Inventories, net | 135,483 | 77,330 | |||||||
Income tax receivable | 19,743 | 18,085 | |||||||
Prepaid expenses and other current assets | 29,242 | 24,720 | |||||||
Total Current Assets | $ | 421,248 | $ | 349,046 | |||||
Property and equipment, net | 150,887 | 157,380 | |||||||
Intangible assets, net | 154,853 | 155,747 | |||||||
Goodwill | 23,861 | 23,897 | |||||||
Operating lease assets | 179,217 | 212,217 | |||||||
Other assets, net | 27,136 | 33,462 | |||||||
Total Assets | $ | 957,202 | $ | 931,749 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
Current Liabilities | |||||||||
Accounts payable | $ | 76,974 | $ | 62,116 | |||||
Accrued compensation | 28,779 | 34,027 | |||||||
Current portion of operating lease liabilities | 53,119 | 58,523 | |||||||
Accrued expenses and other liabilities | 63,768 | 65,518 | |||||||
Total Current Liabilities | $ | 222,640 | $ | 220,184 | |||||
Long-term debt | — | — | |||||||
Non-current portion of operating lease liabilities | 180,092 | 215,434 | |||||||
Other non-current liabilities | 19,200 | 21,389 | |||||||
Deferred income taxes | 1,254 | 1,043 | |||||||
Shareholders’ Equity | |||||||||
Common stock, $1.00 par value per share | 15,960 | 16,895 | |||||||
Additional paid-in capital | 166,139 | 158,083 | |||||||
Retained earnings | 355,037 | 302,456 | |||||||
Accumulated other comprehensive loss | (3,120 | ) | (3,735 | ) | |||||
Total Shareholders’ Equity | $ | 534,016 | $ | 473,699 | |||||
Total Liabilities and Shareholders’ Equity | $ | 957,202 | $ | 931,749 |
Oxford Industries, Inc. | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
(in thousands, except per share amounts) | ||||||||||||
(unaudited) | ||||||||||||
Second Quarter | First Half | |||||||||||
Fiscal 2022 | Fiscal 2021 | Fiscal 2022 | Fiscal 2021 | |||||||||
Net sales | $ | 363,430 | $ | 328,672 | $ | 716,011 | $ | 594,434 | ||||
Cost of goods sold | 131,281 | 119,046 | 257,485 | 218,223 | ||||||||
Gross profit | $ | 232,149 | $ | 209,626 | $ | 458,526 | $ | 376,211 | ||||
SG&A | 163,135 | 146,367 | 320,547 | 283,492 | ||||||||
Royalties and other operating income | 6,357 | 4,737 | 13,370 | 10,170 | ||||||||
Operating income | $ | 75,371 | $ | 67,996 | $ | 151,349 | $ | 102,889 | ||||
Interest expense, net | 274 | 211 | 516 | 463 | ||||||||
Earnings before income taxes |