OXFORD NET DROPS IN QUARTER, YEAR
Byline: David Lipke
NEW YORK — The difficult retail climate and higher costs for new marketing initiatives, principally in its shirt group, depressed Oxford Industries’ fourth-quarter and full-year earnings as women’s wear accounted for the majority of operating profits for both periods.
For the three months ended June 1, the Atlanta-based diversified apparel maker posted net income of $5.3 million, or 70 cents a diluted share, down 27.7 percent from $7.3 million, or 94 cents, in the year-ago quarter. Net sales slipped 12.4 percent to $215.9 million, down from $246.4 million in the same period last year.
Women’s apparel accounted for a considerable 45 percent of sales during the quarter as the division’s sales declined 7.2 percent to $97.1 million. The unit’s operating earnings slumped 31.5 percent to $5.6 million, 57.3 percent of the corporate total. For the year, income in the division retreated 25.8 percent to $15.5 million, 52.2 percent of the company total, as sales dropped 3.5 percent to $313 million. Oxford attributed the sales deflation to a weak performance of in-stock replenishment programs.
“This year has been as challenging as any period we have faced in the past decade,” said chairman and president J. Hicks Lanier in a statement. “Despite heavy price promotion at retail, sales have been lackluster across most product lines [and] excessive markdowns have been required to keep inventories in line.”
Women’s apparel is Oxford’s single largest division, although its three men’s wear units still account for the majority of sales. Oxford’s shirt group had a $940,000 operating loss for the quarter versus income of $4.4 million in the year-ago period as sales declined 30.6 percent to $46.8 million. Lanier Clothes, Oxford’s men’s tailored clothing unit, saw operating profits in the quarter increase 29.3 percent to $3.5 million as sales declined 2.9 percent to $44.6 million. At Oxford Slacks, operating profits in the 13 weeks octupled to $2.3 million as sales slid 4 percent to $27.2 million.
For the full year, company earnings tumbled 34.6 percent to $15.3 million, or $2.05 a diluted share, down from $23.4 million, or $3.02, in the prior year. Sales were $812.5 million, a 3.2 percent decline from the previous year’s $839.5 million.
Looking forward, Lanier predicted “a continuation of the current retail climate for the balance of the calendar year.” Oxford anticipates first quarter sales in the current fiscal year to trail last year’s by 10 percent, as earnings per share decline by approximately 40 percent. The picture should begin to brighten in the second quarter, leading to an approximate 5 percent sales decline for fiscal 2002. The company believes internal operating improvements will produce EPS growth of 10 to 20 percent for the year, despite the sales shrinkage.