NEW YORK — Unexpectedly robust sales growth allowed Oxford Industries Inc.’s earnings to vault more than ninefold in the second quarter.
This story first appeared in the December 24, 2002 issue of WWD. Subscribe Today.
For the three months ended Nov. 29, the Atlanta-based apparel maker reported net income skyrocketed 824.7 percent to $4.3 million, or 56 cents a diluted share. That compares with last year’s comparable-quarter profits of $461,000, or 6 cents.
Sales for the period increased 18.5 percent to $185.4 million from $156.5 million a year ago.
“Sales came in well ahead of plan resulting in a significant improvement in manufacturing efficiency,” said chairman J. Hicks Lanier in a statement. “Our efforts to plan and manage production and inventories have been rewarded with higher earnings and cash flow.”
Oxford said the second-quarter sales gain was primarily attributable to growth in the discount and chain store channels and included the initial rollout of Lands’ End product into selected Sears stores.
By segment, the women’s apparel group saw the greatest improvement in operating income with a 500 percent advance to $1.8 million from $300,000 a year ago. Sales grew 18.1 percent to $64.6 million from $54.7 million on the strength of shipments to mass merchants. Profitability rebounded over year-ago levels, which were depressed by the closing of two manufacturing plants.
In the slacks business, operating income shot up 350 percent to $1.8 million from $400,000 a year ago on a 34.1 percent increase in sales to $24.8 million from $18.5 million. Most of the sales growth came from the Lands’ End rollout.
Oxford’s shirt group rebounded to operating earnings of $600,000 from a year-ago operating loss of $2.5 million. Sales swelled 19.5 percent to $53.4 million from $44.7 million last year, with the Lands’ End rollout responsible for most of the increase. Higher sales, lower markdowns and improved manufacturing performance led to the improvement in profitability.
Lanier Clothes, Oxford’s tailored-clothing business, doubled its operating income to $3.4 million from $1.7 million last year on sales gains of 11 percent to $42.5 million. Better sales were achieved mostly in the department store channel.
Overall, for the first half of the fiscal year, Oxford recorded net income improvement of 144.5 percent to $8.8 million, or $1.16 a diluted share. That compares with last year’s earnings of $3.6 million, or 48 cents.
Sales for the first two quarters added 6.4 percent to $357.6 million from $336.1 million a year ago.
Looking ahead, the firm said it expects mid- to high-single-digit percentage earnings and sales increases for the second half of the year.