Oxford Industries Inc. doesn’t expect recent softness at the Tommy Bahama brand to hurt its chances of reaching the $1 billion sales milestone this year.
The company pegged its initial revenue guidance for the year at between $980 million and $1 billion despite a continuation of a slowdown at Tommy Bahama that began in January and has only recently shown signs of reversing.
On a conference call to discuss the results and guidance late Thursday, Thomas C. Chubb 3rd, president and chief executive officer of Oxford, said, “Like many of our peers, Tommy Bahama experienced an unexpected weather-related slowdown in traffic, beginning in January, and only very recently have we seen some signs of improvement. That said, we remain confident about our product and our marketing plans for the all-important spring, Mother’s Day and Father’s Day selling seasons, and believe that with better weather, our business will pick up strength.”
In the fourth quarter end Feb. 1, Tommy Bahama’s sales rose 7 percent to $167.8 million while comparable-store sales grew 5 percent, helping to offset a decline in wholesale volume. For the full year, the brand’s sales were up 10.7 percent to $584.9 million, accounting for 63.8 percent of corporate revenue, and comps rose 9 percent as wholesale volume decline.
In 2014, Tommy Bahama is expected to generate a sales increase in the high-single digits while Lilly Pulitzer is seen growing at a mid-teen rate. Lilly Pulitzer’s sales grew 12.5 percent last year, to $137.9 million, and fourth-quarter sales were up 3.1 percent to $30 million.
Chubb said that the Lilly Pulitzer brand was off to a “fantastic start in 2014.”
In the quarter, Oxford’s net income more than doubled, hitting $15 million, or 91 cents a diluted share, versus $5.3 million, or 32 cents, in the 2012 quarter. Adjusted EPS was 89 cents, 3 cents above analysts’ consensus estimates, against 65 cents in the final quarter of 2012.
Revenues just beat estimates, rising 6 percent to $250.4 million from $236.2 million, and gross margin grew to 55.1 percent of sales from 53 percent a year ago.
For the full year, net income expanded 44.6 percent, to $45.3 million or $2.75 a diluted share, whill revenues advanced 7.2 percent to $917.1 million.
Oxford’s initial guidance for 2014 is for adjusted EPS of $3 to $3.15. The high range of revenue guidance of $1 billion would constitute a 9 percent increase over 2013 results.
Operating income for Tommy Bahama and Lanier Clothes grew in the fourth quarter, when Lilly Pulitzer reversed a year-ago loss. At the company’s ailing Ben Sherman unit, sales fell 18.7 percent, to $20 million, while the operating loss declined to $2.6 million from a year-ago loss of $4.5 million, with the improvement attributed to successful efforts to drive down selling, general and administrative expenses.
The company expects sales at Ben Sherman to grow at a high-single-digit pace this year while its operating loss is projected to drop between $4 million and $6 million from its 2013 mark of $13.1 million.
“We believe the Ben Sherman team has corrected the trajectory of this business and that it can post additional improvements in fiscal 2014,” Chubb said.
Eric Beder, analyst at Brean Capital, commented in a note to clients, “With Ben Sherman materially reducing its losses, we believe investor focus will begin to drop from this nonessential unit. As such, and with Oxford Industries demonstrating sold results in tough time, we remain buyers.”
Beder continues to rate Oxford a “buy” with a price target of $87.
Shares rose 3.4 percent to $76.43 in early New York Stock Exchange trading Friday.
Oxford boosted its quarterly dividend 17 percent to 21 cents a share from 18 cents, payable on May 2 to shareholders of record April 17.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast