NEW YORK — Oxford Industries Inc. late Tuesday reported lower first-quarter results that were in line with previously lowered guidance and, in light of growing economic uncertainty, further lowered expectations for the remainder of the year.
Net income dropped 44.3 percent to $9.5 million, or 59 cents a diluted share, during the three months ended May 3, from $17.1 million, or 95 cents, in the prior-year quarter. In February, Oxford lowered guidance for the first quarter to earnings of 55 cents and 60 cents a diluted share.
Net sales dropped 6.7 percent to $272.9 million from $292.4 million in last year’s quarter. The figure exceeded the high end of sales guidance of $270 million.
Net sales and operating income dropped at all four of the company’s operating units – Tommy Bahama, Ben Sherman, Lanier Clothes and Oxford Apparel. However, inventories and debt were down and the Atlanta-based firm managed an increase in gross margins, to 42.6 percent of sales from 41.2 percent a year ago. Selling, general and administrative costs expanded to 36.5 percent of sales from 32 percent primarily because of investments in the Tommy Bahama business.
Despite the improvement in several metrics, including a 17 percent decline in its inventories, J. Hicks Lanier, chairman and CEO, stated, “The external environment has become increasingly challenging. We believe that it is prudent to assume that we will see continued deterioration in sales in our company-owned retail stores as well as in our wholesale business.
“We will continue to manage our business conservatively with regard to inventory and are reducing expenses across the organization,” he concluded.
Tommy Bahama sales dipped to 1.9 percent in the quarter to $129.3 million while operating income fell 26.5 percent to $19.5 million. At Ben Sherman, sales fell 6.8 percent to $36.6 million as income contracted 84.8 percent to $255,000. Lanier Clothes’ sales slid 9.3 percent to $38.7 million as it registered a $21,000 operating loss against a $1.4 million profit in the 2007 quarter. Oxford Apparel sales slipped 12.4 percent to $68.7 million as income declined 26.7 percent to $5.3 million.
Oxford now expects full-year earnings per diluted share of between $1.90 and $2.05, below the $2.35 to $2.50 forecast in February. Net sales should finish the year at about $1 billion versus the earlier estimate of $1.01 billion to $1.06 billion.