Tom Chubb, CEO of Oxford Industries, stated that consumers had responded favorably to Lilly Pulitzer’s new casual items.
Oxford Industries Inc., a manufacturer of resort-style apparel, reported mixed second-quarter and third-quarter results on Wednesday. It stated that although its Tommy Bahama line was failing to draw customers, new Lilly Pulitzer products were.
In any case, Oxford (OXM) stock increased 14.6% after hours.
The predictions came as apparel manufacturers deal with U.S. import duties that have the potential to raise prices and turn off already wary buyers. Other brands have tried to lean more on newer launches and refreshed selections to keep consumers interested.
The business stuck to its sales and profit projections for the entire year. Additionally, in Oxford’s results announcement, Chief Executive Tom Chubb stated that the company was “encouraged by positive comparable-store sales performance” compared to the third quarter so far.
“Total company comp sales are modestly positive in the low single-digit range, reflecting strong connections with our core customers and the development of new and compelling product,” he stated.
Executives estimate sales for the third quarter to be between $295 million and $310 million, although the middle of that range fell short of FactSet’s prediction of $308.8 million. In contrast to projections of a loss of 69 cents per share, management projected an adjusted loss of 85 cents to $1.05 per share.
Oxford calculated that it would have to bear almost $80 million in import taxes for the fiscal year if it didn’t take steps to mitigate the impact, based on existing U.S. tariffs and its sourcing patterns. However, management stated that by working to shift the location of its product manufacturing, it has probably been able to offset “roughly half” of that amount. Overall, the cost of clothing has increased slightly throughout the summer.
The company’s second-quarter sales of $403.1 million fell short of the $406.1 million FactSet predicted. Oxford exceeded forecasts of $1.18 in adjusted profits per share with a report of $1.26.
Chubb stated on the company’s earnings call that the current state of the economy is still characterized by cautious consumers, rising tariffs, and discounting because of lower demand.
He claimed that customers had responded favorably to Lilly Pulitzer’s new casual items, which include stretch twill slacks, silk tops, and linen jackets. He claimed that the introduction of some vintage gear had attracted both “new customers and Lilily loyalists.”
He claimed that Tommy Bahama’s spring and summer deliveries “missed the mark in several areas, most notably in color assortment.”
Although Florida clients haven’t purchased as much apparel as management had intended, he said the business has performed better in the Western U.S., where the apparel “resonated more effectively with the regional aesthetic.”
At the end of trade on Wednesday, Oxford Industries’ stock was still down 48.7% for the year.
