It was a good year for Oxford Industries, although no thanks to the department stores.
The Atlanta-based owner of the Tommy Bahama and Lilly Pulitzer brand Wednesday afternoon reported gross profit in the fourth quarter increased to $162.1 million compared to $146 million in the same period last year. Sales in the period ended Feb. 3 increased 12 percent to $293.2 million, compared to $261 million in the fourth quarter of fiscal 2016.
For the year, gross profit increased to $612.6 million, compared to $580.3 million in the prior year while net sales increased 6 percent to $1.09 billion.
Thomas C. Chubb 3rd, chairman and chief executive officer, said while each of the company’s brands performed well in the fourth quarter and year, the company’s e-commerce initiatives were particularly strong and now represent 19 percent of the company’s total revenue.
“Lilly Pulitzer’s momentum began to build in the third quarter and continued into the fourth quarter with 22 percent revenue growth and a 6 percent increase in comp-store sales, a trend that has continued into the first quarter of our new fiscal year,” he said.
The Tommy Bahama brand “maintained a sharp strategic and operational focus during the year and delivered significantly improved results in the fourth quarter, both in terms of profitability and revenue growth,” he added.
Chubb said that this year, the company is planning for “modest top-line growth driven by robust e-commerce growth, healthy growth in our bricks-and-mortar channel [that will be] partially offset by a planned contraction in our wholesale business.”
The company has reduced its department store exposure to 14 percent of total sales, he said, down from 16 percent the prior year, and it will focus its energies on selling “fewer, but more profitable, doors.”
During the company’s earnings call, Chubb said: “Department stores continue to face significant strategic challenges and are operating in a heavy promotional environment. We value our relationships and partnerships with our department store customers. These are some of the greatest retailers in the country, [but] that said, where we can’t find a way to build a win-win business that is in harmony with our standards for presenting and merchandising our brands, we are prepared to walk away from sales in order to protect the integrity of our brands.” Chubb said he expects additional decreases in wholesale sales in fiscal 2018.
Instead, Oxford will continue to add to its own retail stable, which stands at 223 stores. Chubb said the company “will continue to carefully select locations for bricks-and-mortar expansion that are strategically valuable and financially compelling.” That will include the opening this year of a Lilly Pulitzer store on Worth Avenue in Palm Beach, Fla., as well as the brand’s first Hawaii store in Whaler’s Village on Maui. It will also add a Tommy Bahama Marlin Bar & Grill in Palm Springs, Calif.
Chubb said the company expects to “deliver solid revenue growth, expanded gross margins and stronger operating profitability in 2018.
The company projected that for the full 2018 fiscal year, which ends on Feb. 2, 2019, net sales are expected to grow to between $1.12 billion and $1.14 billion as compared to fiscal 2017 net sales of $1.086 billion. In fiscal 2018, GAAP earnings per share from continuing operations are expected to be between $4.28 and $4.48. Adjusted earnings per share from continuing operations are expected to be between $4.40 and $4.60. This compares to earnings from continuing operations on a GAAP basis of $3.87 per share and adjusted earnings of $3.66 per share in fiscal 2017.