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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 4, 2024

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to         

Commission File Number: 1-4365

OXFORD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Georgia

   

58-0831862

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

999 Peachtree Street, N.E., Suite 688, Atlanta, Georgia 30309

(Address of principal executive offices)                               (Zip Code)

(404) 659-2424

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $1 par value

OXM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of June 10, 2024, there were 15,676,410 shares of the registrant’s common stock outstanding.

OXFORD INDUSTRIES, INC.

INDEX TO FORM 10-Q

For the First Quarter of Fiscal 2024

Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets (Unaudited)

5

Condensed Consolidated Statements of Operations (Unaudited)

6

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

7

Condensed Consolidated Statements of Cash Flows (Unaudited)

8

Condensed Consolidated Statements of Changes in Equity (Unaudited)

9

Notes to Condensed Consolidated Financial Statements (Unaudited)

10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3. Quantitative and Qualitative Disclosures About Market Risk

31

Item 4. Controls and Procedures

31

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

31

Item 1A. Risk Factors

31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 5. Other Information

32

Item 6. Exhibits

32

SIGNATURES

33

2

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

Our SEC filings and public announcements may include forward-looking statements about future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, demand for our products, which may be impacted by macroeconomic factors that may impact consumer discretionary spending and pricing levels for apparel and related products, many of which may be impacted by inflationary pressures, elevated interest rates, concerns about the stability of the banking industry or general economic uncertainty, and the effectiveness of measures to mitigate the impact of these factors; competitive conditions and/or evolving consumer shopping patterns; acquisition activities (such as the acquisition of Johnny Was), including our ability to integrate key functions, recognize anticipated synergies and minimize related disruptions or distractions to our business as a result of these activities; supply chain disruptions; costs and availability of labor and freight deliveries, including our ability to appropriately staff our retail stores and food and beverage locations; costs of products as well as the raw materials used in those products, as well as our ability to pass along price increases to consumers; energy costs; our ability to respond to rapidly changing consumer expectations; unseasonal or extreme weather conditions or natural disasters; the ability of business partners, including suppliers, vendors, wholesale customers, licensees, logistics providers and landlords, to meet their obligations to us and/or continue our business relationship to the same degree as they have historically; retention of and disciplined execution by key management and other critical personnel; cybersecurity breaches and ransomware attacks, as well as our and our third party vendors’ ability to properly collect, use, manage and secure business, consumer and employee data and maintain continuity of our information technology systems; the effectiveness of our advertising initiatives in defining, launching and communicating brand-relevant customer experiences; the level of our indebtedness, including the risks associated with heightened interest rates on the debt and the potential impact on our ability to operate and expand our business; changes in international, federal or state tax, trade and other laws and regulations, including the potential for increases or changes in duties, tariffs or quotas; the timing of shipments requested by our wholesale customers; fluctuations and volatility in global financial and/or real estate markets; the timing and cost of retail store and food and beverage location openings and remodels, technology implementations and other capital expenditures; the timing, cost and successful implementation of changes to our distribution network; pandemics or other public health crises; expected outcomes of pending or potential litigation and regulatory actions; the increased consumer, employee and regulatory focus on corporate responsibility issues; the regulation or prohibition of goods sourced, or containing raw materials or components, from certain regions and our ability to evidence compliance; access to capital and/or credit markets; factors that could affect our consolidated effective tax rate; the risk of impairment to goodwill and other intangible assets such as the recent impairment charges incurred in our Johnny Was segment; risks related to a shutdown of the US government; and geopolitical risks, including ongoing challenges between the United States and China and those related to the ongoing war in Ukraine, the Israel-Hamas war and the conflict in the Red Sea region. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I. Item 1A. Risk Factors contained in our Fiscal 2023 Form 10-K, and those described from time to time in our future reports filed with the SEC. We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

3

DEFINITIONS

As used in this report, unless the context requires otherwise, "our," "us" or "we" means Oxford Industries, Inc. and its consolidated subsidiaries; "SG&A" means selling, general and administrative expenses; "SEC" means the United States Securities and Exchange Commission; "FASB" means the Financial Accounting Standards Board; "ASC" means the FASB Accounting Standards Codification; "GAAP" means generally accepted accounting principles in the United States; "TBBC" means The Beaufort Bonnet Company; and “Fiscal 2023 Form 10-K” means our Annual Report on Form 10-K for Fiscal 2023. Additionally, the terms listed below reflect the respective period noted:

Fiscal 2025

52 weeks ending January 31, 2026

Fiscal 2024

52 weeks ending February 1, 2025

Fiscal 2023

53 weeks ended February 3, 2024

Fiscal 2022

52 weeks ended January 28, 2023

Fourth Quarter Fiscal 2024

13 weeks ending February 1, 2025

Third Quarter Fiscal 2024

13 weeks ending November 2, 2024

Second Quarter Fiscal 2024

13 weeks ending August 3, 2024

First Quarter Fiscal 2024

13 weeks ended May 4, 2024

Fourth Quarter Fiscal 2023

14 weeks ended February 3, 2024

Third Quarter Fiscal 2023

13 weeks ended October 28, 2023

Second Quarter Fiscal 2023

13 weeks ended July 29, 2023

First Quarter Fiscal 2023

13 weeks ended April 29, 2023

4

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par amounts)

(unaudited)

    

May 4,

    

February 3,

    

April 29,

2024

2024

2023

ASSETS

Current Assets

Cash and cash equivalents

$

7,657

$

7,604

$

9,712

Receivables, net

 

87,918

 

63,362

 

81,483

Inventories, net

 

144,373

 

159,565

 

179,608

Income tax receivable

19,437

19,549

19,442

Prepaid expenses and other current assets

 

38,978

 

43,035

 

37,459

Total Current Assets

$

298,363

$

293,115

$

327,704

Property and equipment, net

 

193,702

 

195,137

 

181,601

Intangible assets, net

 

259,147

 

262,101

 

280,785

Goodwill

 

27,185

 

27,190

 

122,056

Operating lease assets

319,308

263,934

245,099

Other assets, net

 

41,183

 

32,188

 

33,637

Deferred income taxes

18,088

24,179

3,348

Total Assets

$

1,156,976

$

1,097,844

$

1,194,230

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

  

 

  

Current Liabilities

 

  

 

  

 

  

Accounts payable

$

73,755

$

85,545

$

69,609

Accrued compensation

 

19,340

 

23,660

 

24,318

Current portion of operating lease liabilities

 

65,366

 

64,576

 

67,265

Accrued expenses and other liabilities

 

67,124

 

66,863

 

80,854

Total Current Liabilities

$

225,585

$

240,644

$

242,046

Long-term debt

 

18,630

 

29,304

 

94,306

Non-current portion of operating lease liabilities

 

296,080

 

243,703

 

223,167

Other non-current liabilities

 

23,806

 

23,279

 

19,561

Deferred income taxes

 

 

 

7,725

Shareholders’ Equity

 

 

 

Common stock, $1.00 par value per share

 

15,634

 

15,629

 

15,780

Additional paid-in capital

 

183,126

 

178,567

 

176,030

Retained earnings

 

396,933

 

369,453

 

418,043

Accumulated other comprehensive loss

 

(2,818)

 

(2,735)

 

(2,428)

Total Shareholders’ Equity

$

592,875

$

560,914

$

607,425

Total Liabilities and Shareholders’ Equity

$

1,156,976

$

1,097,844

$

1,194,230

See accompanying notes.

5

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

    

First Quarter

Fiscal 2024

Fiscal 2023

Net sales

$

398,184

$

420,097

Cost of goods sold

 

139,823

 

144,968

Gross profit

$

258,361

$

275,129

SG&A

 

213,103

 

203,149

Royalties and other operating income

 

7,193

 

8,321

Operating income

$

52,451

$

80,301

Interest expense, net

 

874

 

2,342

Earnings before income taxes

$

51,577

$

77,959

Income tax expense

 

13,204

 

19,421

Net earnings

$

38,373

$

58,538

Net earnings per share:

 

  

 

  

Basic

$

2.46

$

3.75

Diluted

$

2.42

$

3.64

Weighted average shares outstanding:

 

  

 

Basic

 

15,597

 

15,629

Diluted

 

15,844

 

16,071

Dividends declared per share

$

0.67

$

0.65

See accompanying notes.

6

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

First Quarter

Fiscal 2024

Fiscal 2023

Net earnings

$

38,373

$

58,538

Other comprehensive income (loss), net of taxes:

 

  

 

  

Net foreign currency translation adjustment

 

(83)

 

(604)

Comprehensive income

$

38,290

$

57,934

See accompanying notes.

7

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

First Quarter

    

Fiscal 2024

    

Fiscal 2023

Cash Flows From Operating Activities:

 

  

 

  

Net earnings

$

38,373

$

58,538

Adjustments to reconcile net earnings to cash flows from operating activities:

 

  

 

  

Depreciation

 

13,586

 

11,512

Amortization of intangible assets

 

2,955

 

3,660

Equity compensation expense

 

4,051

 

3,259

Gain on sale of property and equipment

(1,756)

Amortization and write-off of deferred financing costs

 

96

 

272

Deferred income taxes

 

6,059

 

4,657

Changes in operating assets and liabilities, net of acquisitions and dispositions:

 

  

 

Receivables, net

 

(24,571)

 

(37,542)

Inventories, net

 

15,151

 

39,987

Income tax receivable

112

(2)

Prepaid expenses and other current assets

 

4,051

 

634

Current liabilities

 

(15,365)

 

(27,671)

Other balance sheet changes

 

(11,575)

 

(2,991)

Cash provided by operating activities

$

32,923

$

52,557

Cash Flows From Investing Activities:

 

  

 

  

Acquisitions, net of cash acquired

 

(240)

 

(997)

Purchases of property and equipment

 

(11,894)

 

(16,662)

Proceeds from the sale of property, plant and equipment

2,125

Cash used in investing activities

$

(12,134)

$

(15,534)

Cash Flows From Financing Activities:

 

  

 

  

Repayment of revolving credit arrangements

 

(136,216)

 

(137,755)

Proceeds from revolving credit arrangements

 

125,542

 

113,051

Deferred financing costs paid

(1,661)

Proceeds from issuance of common stock

 

513

 

602

Cash dividends paid

 

(10,549)

 

(10,351)

Cash used in financing activities

$

(20,710)

$

(36,114)

Net change in cash and cash equivalents

$

79

$

909

Effect of foreign currency translation on cash and cash equivalents

 

(26)

 

(23)

Cash and cash equivalents at the beginning of year

 

7,604

 

8,826

Cash and cash equivalents at the end of period

$

7,657

$

9,712

See accompanying notes.

8

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except per share amounts)

(unaudited)

First Quarter Fiscal 2024

    

Common Stock

    

APIC

    

Retained Earnings

    

AOCI

    

Total

February 3, 2024

    

$

15,629

$

178,567

$

369,453

$

(2,735)

$

560,914

Comprehensive income

 

 

 

38,373

 

(83)

 

38,290

Shares issued under equity plans

 

5

 

508

 

 

 

513

Compensation expense for equity awards

 

 

4,051

 

 

 

4,051

Repurchase of shares

 

 

 

 

 

Dividends declared

 

 

 

(10,893)

 

 

(10,893)

May 4, 2024

$

15,634

$

183,126

$

396,933

$

(2,818)

$

592,875

First Quarter Fiscal 2023

    

Common Stock

    

APIC

    

Retained Earnings

    

AOCI

    

Total

January 28, 2023

    

$

15,774

$

172,175

$

370,145

$

(1,824)

$

556,270

Comprehensive income

 

 

 

58,538

 

(604)

 

57,934

Shares issued under equity plans

 

6

 

596

 

 

 

602

Compensation expense for equity awards

 

 

3,259

 

 

 

3,259

Repurchase of shares

 

 

 

 

 

Dividends declared

 

 

 

(10,640)

 

 

(10,640)

April 29, 2023

$

15,780

$

176,030

$

418,043

$

(2,428)

$

607,425

See accompanying notes.

9

OXFORD INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

FIRST QUARTER OF FISCAL 2024

1.    Basis of Presentation:  The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe the accompanying unaudited condensed consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented. Results of operations for interim periods are not necessarily indicative of results to be expected for a full fiscal year due to the seasonality of our business.

The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported as assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

The significant accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Fiscal 2023 Form 10-K. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Fiscal 2023 Form 10-K.

Recently Issued Accounting Standards Applicable to Future Years

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification (“ASC”). We consider the applicability and impact of all ASUs and any not listed below were assessed and determined to not be applicable or are expected to have an immaterial impact on our Condensed Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, inclusion of all annual disclosures in interim periods, disclosure of the title and position of the chief operating decision maker and how the chief operating decision maker uses reported measures of segment profit and loss to assess performance and allocate resources. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments require retrospective application to all prior periods presented in the financial statements. We are evaluating how the enhanced disclosure requirements of ASU 2023-07 will affect our presentation, and we will include the incremental disclosures upon the effective date.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied on a prospective basis with the option to apply the standard retrospectively. We are evaluating how the expanded disclosure requirements of ASU 2023-09 will affect our presentation, and we will include the incremental disclosures upon the effective date.

2.    Operating Group Information:  We identify our operating groups based on the way our management organizes the components of our business for the purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocation across each brand’s direct to consumer, wholesale and licensing operations, as applicable. Our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups.

Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, the elimination of any sales between operating groups, any other items that are not allocated to the operating groups, including LIFO inventory accounting adjustments. The accounting policies of the reportable operating segments are the same as those described in our Fiscal 2023 Form 10-K.

10

The table below presents certain financial information (in thousands) about our operating groups, as well as Corporate and Other.

First Quarter

    

Fiscal 2024

    

Fiscal 2023

Net sales

 

  

 

  

Tommy Bahama

$

225,617

$

239,435

Lilly Pulitzer

 

88,421

 

97,450

Johnny Was

51,212

49,491

Emerging Brands

 

33,001

 

33,991

Corporate and Other

 

(67)

 

(270)

Consolidated net sales

$

398,184

$

420,097

Depreciation and amortization

 

  

 

  

Tommy Bahama

$

7,193

$

5,984

Lilly Pulitzer

 

4,594

 

3,392

Johnny Was

4,006

5,192

Emerging Brands

 

614

 

425

Corporate and Other

 

134

 

179

Consolidated depreciation and amortization

$

16,541

$

15,172

Operating income (loss)

 

  

 

  

Tommy Bahama

$

42,639

$

55,521

Lilly Pulitzer

 

15,544

 

24,516

Johnny Was

333

2,484

Emerging Brands

 

3,798

 

3,913

Corporate and Other

 

(9,863)

 

(6,133)

Consolidated operating income

$

52,451

$

80,301

Interest expense, net

 

874

 

2,342

Earnings before income taxes

$

51,577

$

77,959

    

May 4, 2024

 

February 3, 2024

    

April 29, 2023

Assets

 

  

  

 

  

Tommy Bahama (1)

$

607,069

$

556,431

$

576,867

Lilly Pulitzer (2)

 

208,182

 

194,871

 

215,842

Johnny Was (3)

246,229

251,429

330,321

Emerging Brands (4)

 

103,995

 

98,816

 

92,959

Corporate and Other (5)

 

(8,499)

 

(3,703)

 

(21,759)

Consolidated Total Assets

$

1,156,976

$

1,097,844

$

1,194,230

(1)Increase in Tommy Bahama total assets from April 29, 2023, includes increases in operating lease assets and property and equipment partially offset by decreases in inventories and receivables.
(2)Decrease in Lilly Pulitzer total assets from April 29, 2023, includes a decrease in inventories.
(3)Decrease in Johnny Was total assets from April 29, 2023, relates primarily to the impairment charges for goodwill and intangible assets recorded in the Fourth Quarter of Fiscal 2023.
(4)Increase in Emerging Brands total assets from April 29, 2023, includes increases in operating lease assets and property and equipment from the opening of new retail store locations. Goodwill and intangible assets also increased related to the acquisition of Jack Rogers and three former Southern Tide Signature Stores in the Fourth Quarter of Fiscal 2023. These increases were partially offset by reductions in inventories.
(5)Increase in Corporate and Other total assets from April 29, 2023, relates primarily due to the impact of LIFO accounting.

11

The tables below quantify net sales, for each operating group and in total (in thousands), and the percentage of net sales by distribution channel for each operating group and in total, for each period presented. We have calculated all percentages below based on actual data, and percentages may not add to 100 due to rounding.

First Quarter Fiscal 2024

 

    

Net Sales

    

Retail

    

E-commerce

    

Food & Beverage

    

Wholesale

    

Other

 

Tommy Bahama

$

225,617

 

45

%  

21

%  

15

%  

19

%  

%

Lilly Pulitzer

 

88,421

 

35

%  

46

%  

%  

19

%  

%

Johnny Was

51,212

37

%

40

%

%

23

%

%

Emerging Brands

 

33,001

 

15

%  

36

%  

%  

49

%  

%

Corporate and Other

 

(67)

 

%  

%  

%  

%  

NM

%

Total

$

398,184

 

39

%  

30

%  

9

%  

22

%  

%

First Quarter Fiscal 2023

 

    

Net Sales

    

Retail

    

E-commerce

    

Food & Beverage

    

Wholesale

    

Other

 

Tommy Bahama

$

239,435

 

44

%  

21

%  

13

%  

22

%  

%

Lilly Pulitzer

 

97,450

 

34

%  

47

%  

%  

19

%  

%

Johnny Was

49,491

36

%

38

%

26

%

%

Emerging Brands

 

33,991

 

7

%  

36

%  

%  

57

%  

%

Corporate and Other

 

(270)

 

%  

%  

%  

%  

NM

%

Total

$

420,097

 

37

%  

30

%  

8

%  

25

%  

%

3.    Revenue Recognition and Receivables: Our revenue consists of direct to consumer sales, including our retail store, e-commerce and food and beverage operations, and wholesale sales, as well as royalty income, which is included in royalties and other operating income in our consolidated statements of operations. We recognize revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our accounting policies related to revenue recognition for each type of contract with customers is described in the significant accounting policies described in our Fiscal 2023 Form 10-K.

The table below quantifies net sales by distribution channel (in thousands) for each period presented.

First Quarter

Fiscal 2024

    

Fiscal 2023

Retail

$

155,755

$

157,605

E-commerce

 

119,716

 

125,764

Food & Beverage

 

34,717

 

32,032

Wholesale

 

88,063

 

104,829

Other

 

(67)

 

(133)

Net sales

$

398,184

$

420,097

An estimated sales return liability of $14 million, $13 million and $16 million for expected direct to consumer returns is classified in accrued expenses and other liabilities in our consolidated balance sheet as of May 4, 2024, February 3, 2024, and April 29, 2023, respectively. As of May 4, 2024, February 3, 2024, and April 29, 2023, prepaid expenses and other current assets included $4 million, $4 million and $5 million, respectively, relating to the estimated value of inventory for expected direct to consumer and wholesale sales returns.

Substantially all amounts recognized in receivables, net represent trade receivables related to contracts with customers. In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising support to and accept returns from certain of our wholesale customers for certain products. As of May 4, 2024, February 3, 2024, and April 29, 2023, reserve balances recorded as a reduction to receivables related to these items were $3 million, $3 million and $4 million, respectively. As of May 4, 2024, February 3, 2024, and April 29, 2023, our provision for credit losses related to receivables included in our consolidated balance sheets was $1 million, $1 million and $1 million, respectively.

12

Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in accrued expenses and other liabilities in our consolidated balance sheet and totaled $20 million, $20 million and $18 million as of May 4, 2024, February 3, 2024, and April 29, 2023, respectively.

4.    Leases: For the First Quarter of Fiscal 2024, operating lease expense was $19 million and variable lease expense was $13 million, resulting in total lease expense of $32 million compared to $28 million of total lease expense in the First Quarter of Fiscal 2023.

Cash paid for lease amounts included in the measurement of operating lease liabilities in the First Quarter of Fiscal 2024 was $22 million, while cash paid for lease amounts included in the measurement of operating lease liabilities in the First Quarter of Fiscal 2023 was $21 million.

As of May 4, 2024, the stated lease liability payments for the fiscal years specified below were as follows (in thousands):

    

Operating lease

Remainder of 2024

$

62,510

2025

71,153

2026

68,663

2027

 

54,538

2028

 

49,632

2029

35,765

After 2029

 

101,054

Total lease payments

$

443,315

Less: Difference between discounted and undiscounted lease payments

 

81,870

Present value of lease liabilities

$

361,445

5.    Shareholders’ Equity: From time to time, we repurchase our common stock mainly through open market repurchase plans. During the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, there were no repurchases. As of May 4, 2024, we have $30 million remaining under our existing Board of Directors’ authorization.

We also repurchase shares from our employees to cover employee tax liabilities related to the vesting of shares of our common stock. During the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, no shares vested that resulted in a repurchase from our employees.

Long-Term Stock Incentive Plan and Equity Compensation Expense

In recent years, we have granted a combination of service-based restricted share awards and awards based on relative total shareholder return ("TSR") to certain select employees.

13

Service-Based Restricted Share Awards

The table below summarizes the service-based restricted share awards, including both restricted shares and restricted share units, activity for the First Quarter of Fiscal 2024:

    

Fiscal 2024

    

    

Weighted- 

Number of

average

Shares or

grant date

Units

fair value

Awards outstanding at beginning of year

158,794

$

99

Awards granted

66,188

$

111

Awards vested, including awards repurchased from employees for employees’ tax liability

$

Awards forfeited

$

Awards outstanding on May 4, 2024

224,982

$

102

TSR-based Restricted Share Units

The table below summarizes the TSR-based restricted share unit activity at target for the First Quarter of Fiscal 2024:

    

Fiscal 2024

    

    

Weighted- 

average

Number of

grant date

Share Units

fair value

TSR-based awards outstanding at beginning of year

192,163

$

129

TSR-based awards granted

80,245

$

140

TSR-based restricted shares earned and vested, including restricted share units repurchased from employees for employees’ tax liability

$

TSR-based awards forfeited

$

TSR-based awards outstanding on May 4, 2024

272,408

$

132

As disclosed in Note 1 to our consolidated financial statements contained in our Fiscal 2023 Form 10-K, the fair value of TSR-based awards are not tied to the price of our common stock at any fixed point in time; rather, the fair value of TSR-based awards is determined using a Monte Carlo simulation model, which models multiple TSR paths for our common stock as well as the comparator group, as applicable, to evaluate and determine the estimated fair value of the award.

14

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto contained in this report and the consolidated financial statements, notes to consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Fiscal 2023 Form 10-K.

OVERVIEW

Business Overview

We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers lifestyle brands.

Our business strategy is to drive excellence across a portfolio of lifestyle brands that create sustained, profitable growth. We consider lifestyle brands to be those brands that have a clearly defined and targeted point of view inspired by an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create an emotional connection can command greater loyalty and higher price points and create licensing opportunities. We believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products to consumers where and when they want them. We believe the principal competitive factors in the apparel industry are the reputation, value, and image of brand names; design of differentiated, innovative or otherwise compelling product; consumer preference; price; quality; marketing (including through rapidly shifting digital and social media vehicles); product fulfillment capabilities; and customer service. Our ability to compete successfully in the apparel industry is dependent on our proficiency in foreseeing changes and trends in fashion and consumer preference and presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to provide exciting, differentiated fashion products each season as well as certain core products that consumers expect from us.

During Fiscal 2023, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations. The remaining 20% of our net sales was generated through our wholesale distribution channels, which complement our direct to consumer operations and provide access to a larger base of consumers. Our wholesale operations consist of sales of products bearing the trademarks of our lifestyle brands to various specialty stores, better department stores, Signature Stores, multi-branded e-commerce retailers and other retailers.

For additional information about our business and our operating groups, see Part I, Item 1. Business of our Fiscal 2023 Form 10-K. Important factors relating to certain risks which could impact our business are described in Part I. Item 1A. Risk Factors of our Fiscal 2023 Form 10-K.

Industry Overview

We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the apparel industry, and our competitors vary by operating group and distribution channel. The apparel industry is cyclical and very dependent on the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional, domestic and international economic conditions change. Also, in recent years consumers have chosen to spend less of their discretionary spending on certain product categories, including apparel, while spending more on services and other product categories. Further, negative economic conditions often have a longer and more severe impact on the apparel industry than on other industries due, in part, to apparel purchases often being more of a discretionary purchase.

This competitive and evolving environment requires that brands and retailers approach their operations, including marketing and advertising, very differently than they have historically and may result in increased operating costs and

15

investments to generate growth or even maintain existing sales levels. While the competition and evolution present significant risks, especially for traditional retailers who fail or are unable to adapt, we believe it also presents a tremendous opportunity for brands and retailers to capitalize on the changing consumer environment.

The current macroenvironment, with heightened concerns about continuing inflationary trends, a global economic recession, geopolitical issues, the availability and cost of credit and elevated interest rates for prolonged periods has resulted in lower levels of consumer sentiment that has driven the consumer to become more cautious in her discretionary spending despite most other economic indicators remaining positive. These factors, when combined with heightened promotional activity in our industry, is creating a complex and challenging retail environment, which continues to impact our businesses and financial results during Fiscal 2024 and has exacerbated some of the inherent challenges to our operations and may continue to do so in the future. There remains significant uncertainty in the macroeconomic environment, and the impact of these and other factors could have a major effect on our businesses.

However, we believe our lifestyle brands have true competitive advantages, and we continue to invest in our brands’ direct to consumer initiatives and distribution capabilities while further leveraging technology to serve our consumers when and where they want to be served. We continue to believe that our lifestyle brands, with their strong emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various challenges facing our industry in the current environment.

Key Operating Results:

The following table sets forth our consolidated operating results (in thousands, except per share amounts) for the First Quarter of Fiscal 2024 compared to the First Quarter of Fiscal 2023:

    

First Quarter

    

Fiscal 2024

Fiscal 2023

Net sales

$

398,184

$

420,097

Operating income

$

52,451

$

80,301

Net earnings

$

38,373

$

58,538

Net earnings per diluted share

$

2.42

$

3.64

Weighted average shares outstanding - diluted

 

15,844

 

16,071

Net earnings per diluted share were $2.42 in the First Quarter of Fiscal 2024 compared to $3.64 in the First Quarter of Fiscal 2023. The 34% decrease in net earnings per diluted share was primarily due to a 34% decrease in net earnings. The decreased net earnings were primarily due to (1) lower operating income in each of our operating groups, (2) a higher operating loss at Corporate and Other and (3) a higher effective tax rate. These decreases were partially offset by decreased interest expense.

COMPARABLE SALES

We often disclose comparable sales to provide additional information regarding changes in our results of operations between periods. Our disclosures of comparable sales include net sales from our full-price retail stores and e-commerce sites. We believe that the inclusion of both full-price retail stores and e-commerce sites in the comparable sales disclosures is a more meaningful way of reporting our comparable sales results, given similar inventory planning, allocation and return policies, as well as our cross-channel marketing and other initiatives for the direct to consumer channels. For our comparable sales disclosures, we exclude (1) outlet store sales as those clearance sales are used primarily to liquidate end of season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally occur at lower gross margins than our non-clearance direct to consumer sales, and (2) food and beverage sales, as we do not currently believe that the inclusion of food and beverage sales in our comparable sales disclosures is meaningful in assessing our branded apparel businesses. Historically, we also excluded from our comparable sales disclosures e-commerce flash clearance sales used to liquidate excess inventory; however, given the evolving cadence of marking down retail sales prices associated with our e-commerce operations, we are now including those sales for purposes of our comparable sales disclosures. Comparable sales information reflects net sales, including shipping and handling revenues, if any, associated with product sales.

16

For purposes of our disclosures, comparable sales consists of sales through e-commerce sites and any physical full-price retail stores that were owned and open as of the beginning of the prior fiscal year and which did not have during the relevant periods, and is not within the current fiscal year scheduled to have, (1) a remodel or other event which would result in a closure for an extended period of time (which we define as a period of two weeks or longer), (2) a greater than 15% change in the size of the retail space due to expansion, reduction or relocation to a new retail space or (3) a relocation to a new space that is significantly different from the prior retail space. For those stores which are excluded based on the preceding sentence, the stores continue to be excluded from comparable sales until the criteria for a new store is met subsequent to the remodel, relocation, or other event. A full-price retail store that is remodeled will generally continue to be included in our comparable sales metrics as a store is not typically closed for longer than a two-week period during a remodel; however, a full-price retail store that is relocated generally will not be included in our comparable sales metrics until that store has been open in the relocated space for the entirety of the prior fiscal year because the size or other characteristics of the store typically change significantly from the prior location. Any stores that were closed during the prior fiscal year or current fiscal year, or which we expect to close or vacate in the current fiscal year, as well as any pop-up or temporary store locations, are excluded from our comparable sales metrics.

Definitions and calculations of comparable sales differ among companies, and therefore comparable sales metrics disclosed by us may not be comparable to the metrics disclosed by other companies.

DIRECT TO CONSUMER LOCATIONS

The table below provides information about the number of direct to consumer locations for our brands as of the dates specified. The amounts below include our permanent locations and exclude any pop-up or temporary store locations which have an initial lease term of 12 months or less.

May 4,

February 3,

April 29,

January 28,

    

2024

    

2024

    

2023

    

2023

Tommy Bahama full-price retail stores

 

102

 

102

 

103

 

103

Tommy Bahama retail-food & beverage locations

 

23

 

22

 

21

 

21

Tommy Bahama outlets

 

35

 

34

 

33

 

33

Total Tommy Bahama locations

 

160

 

158

 

157

 

157

Lilly Pulitzer full-price retail stores

 

60

 

60

 

59

 

59

Johnny Was full-price retail stores

75

72

65

65

Johnny Was outlets

3

3

2

2

Total Johnny Was locations

78

75

67

67

Southern Tide full-price retail stores

20

19

9

6

TBBC full-price retail stores

4

3

3

3

Total Oxford direct to consumer locations

 

322

 

315

 

295

 

292

RESULTS OF OPERATIONS

FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023

The discussion and tables below compare our statements of operations for the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023. Each dollar and percentage change provided reflects the change between these fiscal periods unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share amounts. We have calculated all percentages based on actual data, and percentage columns in tables may not add due to rounding. Individual line items of our consolidated statements of operations, including gross profit, may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company.

The following table sets forth the specified line items in our unaudited condensed consolidated statements of operations both in dollars (in thousands) and as a percentage of net sales as well as the dollar change and the percentage change as compared to the same period of the prior year. The table also includes net earnings per diluted share and diluted

17

weighted average shares outstanding (in thousands), as well as the change and the percentage change for each of these items as compared to the same period of the prior year.

    

First Quarter

    

    

 

Fiscal 2024

Fiscal 2023

$ Change

    

% Change

Net sales

    

$

398,184

    

100.0

%  

$

420,097

100.0

%  

$

(21,913)

    

(5.2)

%

Cost of goods sold

 

139,823

 

35.1

%  

 

144,968

 

34.5

%  

 

(5,145)

 

(3.5)

%

Gross profit

$

258,361

 

64.9

%  

$

275,129

 

65.5

%  

$

(16,768)

 

(6.1)

%

SG&A

 

213,103

 

53.5

%  

 

203,149

 

48.4

%  

 

9,954

 

4.9

%

Royalties and other operating income

 

7,193

 

1.8

%  

 

8,321

 

2.0

%  

 

(1,128)

 

(13.6)

%

Operating income

$

52,451

 

13.2

%  

$

80,301

 

19.1

%  

$

(27,850)

 

(34.7)

%

Interest expense, net

 

874

 

0.2

%  

 

2,342

 

0.6

%  

 

(1,468)

 

(62.7)

%

Earnings before income taxes

$

51,577

 

13.0

%  

$

77,959

 

18.6

%  

$

(26,382)

 

(33.8)

%

Income tax expense

 

13,204

 

3.3

%  

 

19,421

 

4.6

%  

 

(6,217)

 

(32.0)

%

Net earnings

$

38,373

 

9.6

%  

$

58,538

 

13.9

%  

$

(20,165)

 

(34.4)

%

Net earnings per diluted share

$

2.42

$

3.64

$

(1.22)

(33.5)

%

Weighted average shares outstanding - diluted

15,844

 

16,071

 

(227)

 

(1.4)

%

Net Sales

    

First Quarter

    

Fiscal 2024

Fiscal 2023

    

$ Change

    

% Change

Tommy Bahama

$

225,617

$

239,435

$

(13,818)

 

(5.8)

%

Lilly Pulitzer

 

88,421

 

97,450

 

(9,029)

 

(9.3)

%

Johnny Was

51,212

 

49,491

 

1,721

 

3.5

%

Emerging Brands

 

33,001

 

33,991

 

(990)

 

(2.9)

%

Corporate and Other

 

(67)

 

(270)

 

203

 

NM

%

Consolidated net sales

$

398,184

$

420,097

$

(21,913)

 

(5.2)

%

Consolidated net sales were $398 million in the First Quarter of Fiscal 2024 compared to net sales of $420 million in the First Quarter of Fiscal 2023. The 5% decrease in net sales included decreased sales in Tommy Bahama, Lilly Pulitzer and Emerging Brands. These decreases were partially offset by increased sales in Johnny Was.

The changes in net sales by distribution channel consisted of the following:

a decrease in wholesale sales of $17 million, or 16%, including (1) a $11 million decrease in Tommy Bahama, (2) a $3 million decrease in Emerging Brands, (3) a $2 million decrease in Lilly Pulitzer and (4) a $1 million decrease in Johnny Was;
a decrease in e-commerce sales of $6 million, or 5%, including (1) a $5 million decrease in Lilly Pulitzer and (2) a $2 million decrease in Tommy Bahama. These decreases were partially offset by a $2 million increase in Johnny Was;
a decrease in full-price retail sales of $3 million, or 2%, including (1) a $4 million decrease in Tommy Bahama and (2) a $2 million decrease in Lilly Pulitzer. These decreases were partially offset by (1) a $2 million increase in Emerging Brands as we continue to open new retail locations and (2) a $1 million increase in Johnny Was;
an increase in food and beverage sales of $3 million, or 8%; and

18

an increase in outlet sales of $1 million, or 6%, primarily driven by a $1 million increase in Tommy Bahama.

The following table presents the proportion of our consolidated net sales by distribution channel for each period presented. We have calculated all percentages below on actual data, and percentages may not add to 100 due to rounding.

    

First Quarter

    

Fiscal 2024

    

Fiscal 2023

Retail

 

39

%  

37

%

E-commerce

 

30

%  

30

%

Food & beverage

 

9

%  

8

%

Wholesale

 

22

%  

25

%

Total

 

100

%  

100

%

Tommy Bahama:

Tommy Bahama net sales decreased $14 million, or 6%, in the First Quarter of Fiscal 2024, with a decrease in (1) wholesale sales of $11 million, or 20%, driven primarily by decreases in sales to off-price, department store, and specialty store wholesale customers, (2) full-price retail sales of $4 million, or 5%, and (3) e-commerce sales of $2 million, or 5%. These decreases were partially offset by an increase in (1) food and beverage sales of $3 million, or 8%, and (2) outlet sales of $1 million, or 4%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:

First Quarter

    

Fiscal 2024

    

Fiscal 2023

 

Retail

 

45

%  

44

%

E-commerce

 

21

%  

21

%

Food & beverage

 

15

%  

13

%

Wholesale

 

19

%  

22

%

Total

 

100

%  

100

%

Lilly Pulitzer:

Lilly Pulitzer net sales decreased $9 million, or 9%, in the First Quarter of Fiscal 2024, with a decrease in (1) e-commerce sales of $5 million, or 11%, primarily resulting from a change in promotional activity with Lilly Pulitzer replacing a website-wide 30% off event in the First Quarter of 2023 with a smaller flash sale on select product with higher discounts in the First Quarter of Fiscal 2024, (2) retail sales of $2 million, or 6%, and (3) wholesale sales of $2 million, or 10%. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

First Quarter

    

Fiscal 2024

    

Fiscal 2023

 

Retail

 

35

%  

34

%

E-commerce

 

46

%  

47

%

Wholesale

 

19

%  

19

%

Total

 

100

%  

100

%

19

Johnny Was:

Johnny Was net sales increased $2 million, or 3%, in the First Quarter of Fiscal 2024, with an increase in (1) e-commerce sales of $2 million, or 11%, and (2) retail sales of $1 million, or 4%. These increases were partially offset by decreased wholesale sales of $1 million, or 10%. The following table presents the proportion of net sales by distribution channel for Johnny Was for each period presented:

First Quarter

    

Fiscal 2024

    

Fiscal 2023

 

Retail

 

37

%  

36

%

E-commerce

 

40

%  

38

%

Wholesale

 

23

%  

26

%

Total

 

100

%  

100

%

Emerging Brands:

Emerging Brands net sales decreased $1 million, or 3%, in the First Quarter of Fiscal 2024 due to lower off-price wholesale sales and lower promotional e-commerce sales at Southern Tide and TBBC. Off-price wholesale sales and promotional e-commerce sales were higher in in the First Quarter of Fiscal 2023 to liquidate previously marked down inventory. These decreases were partially offset by (1) sales in Jack Rogers, which was acquired in the Fourth Quarter of Fiscal 2023 and (2) increased sales in Duck Head. By distribution channel, the $1 million decrease included a decrease in wholesale sales of $3 million, or 15%. This decrease was partially offset by an increase in retail sales of $2 million, or 88%, as we opened new retail locations. The following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:

First Quarter