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NEW YORK — War? Disease? Recession?
This story first appeared in the April 4, 2003 issue of WWD. Subscribe Today.
None of it seemed to register at Oxford Industries Inc. in the third quarter as major sales gains, led by those in its women’s wear operation, and lower costs allowed the firm to post a fivefold expansion in profits.
For the three months ended Feb. 28, the Atlanta-based apparel manufacturer said net income skyrocketed 410.5 percent to $6.9 million, or 92 cents a diluted share. By comparison, last year the firm reported earnings of $1.4 million, or 18 cents.
Sales for the period surged 39.8 percent to $209 million from $149.5 million a year ago.
“The sales increase was driven by growth with major mass-merchant retailers and the continuing rollout of Lands’ End product to Sears stores,” said chairman and president J. Hicks Lanier in a statement. “We also benefited from cleaner year-end retail inventories, which enabled us to expedite the shipment of spring product.”
Oxford added that “profitability was favorably impacted by aggressive sourcing, significantly lower markdowns and improved manufacturing performance,” as was evidenced by a gross margin increase of 120 basis points to 20.5 percent of sales from 19.3 percent in last year’s third quarter. Moreover, operating expenses for the quarter declined 290 basis points to 15 percent from 17.9 percent, despite higher incentive compensation costs due to improved financial performance.
Women’s wear, which now accounts for 41.9 percent of total sales, led the rally with a 57.1 percent jump in sales to $87.5 million from $55.7 million a year ago. Last year, women’s wear sales accrued to 37.2 percent of net sales. Slacks followed a close second with a 51.9 percent rise to $29 million from $19.1 million.
Commensurate with sales, all segments contributed operating profits to the bottom line, with women’s wear operating earnings escalating almost 10 times to $5.8 million from $588,000 a year ago.
Women’s wear also nearly doubled its contribution to operating earnings to 50.1 percent. By comparison, last year women’s wear represented only 26.5 percent of operating earnings.
Overall, for the first nine months of the year, Oxford said earnings more than tripled, growing 217.5 percent to $15.7 million, or $2.08 a diluted share, versus $5 million, or 66 cents, last year. Women’s wear operating earnings, which were 42.4 percent of net earnings before interest and taxes, shot up 125.6 percent to $11.1 million from $4.9 million a year ago. Last year women’s wear was responsible for 60.9 percent of operating earnings, reflecting a $1.7 million loss in the shirt group.
Sales for the period strengthened 16.7 percent to $566.5 million from $485.6 million in the prior-year period.
Of that, women’s wear contributed 38.6 percent of net sales, or $218.7 million, a 26.7 percent gain over last year’s $172.6 million.