Continued strength at Tommy Bahama and Lilly Pulitzer — compounded by some signs of improvement at Ben Sherman — helped Oxford Industries Inc. post better sales and profits in the second quarter.
But investors were disappointed by third-quarter guidance that fell below Wall Street’s expectations, sending shares down in after-hours trading.
In the three months ended July 28, the Atlanta-based firm generated net income of $5 million, or 30 cents a diluted share, 93.1 percent above year-ago profits of $2.6 million, or 16 cents. Excluding special items, such as charges involving the repurchase of senior secured notes, adjusted EPS was 65 cents, 2 cents above the consensus estimate of analysts. Gross margin ticked ahead to 57.2 percent of sales from 57 percent in the prior-year period.
Led by double-digit growth at Tommy Bahama and Lilly Pulitzer, revenues grew 14.5 percent to $206.9 million from $180.6 million in the 2011 quarter. Revenues were expected to land at $205 million.
Aided by high single-digit same-store sales increases and what the firm called “significant” increases in e-commerce and wholesale volume, Lilly Pulitzer’s revenues were up 24.5 percent to $30.9 million while operating income grew 32 percent to $7.4 million. Tommy Bahama’s sales moved up 16.8 percent to $127.5 million while operating income dropped 2.4 percent to $16.6 million as the company invested in international operations and the upcoming opening of its New York store.
Ben Sherman reduced its quarterly operating loss, to $1.5 million from $1.8 million, while sales declined 3.8 percent to $20.1 million from $20.9 million. Lanier Clothes’ sales were up 8.1 percent to $24.8 million from $22.9 million while operating income advanced 5.9 percent to $2.4 million from $2.3 million.
“We achieved these results while continuing to make major investments in platforms for the future growth of our company,” said J. Hicks Lanier, chairman and chief executive officer of Oxford. “The most significant of these include Tommy Bahama’s New York flagship and their international expansion.”
Those expenses were also cited during a late afternoon conference call as Oxford projected third-quarter sales of $175 million to $185 million, below the consensus estimate of $191.9 million, and adjusted EPS of 18 to 23 cents, below the consensus estimate of 24 cents.
Oxford reported results following the close of the markets Wednesday. Shares closed up $1.34, or 2.6 percent, at $52.67 but dropped $4.54, or 8.6 percent, to $48.13 following the earnings disclosure.
In the first half, net income grew 11.2 percent to $23 million, or $1.39 a diluted share, while sales were up 12.6 percent to $437.9 million.