Oxford Industries Inc (NYSE: OXM) has announced its financial results for the first quarter ended September 1, 2000. Consolidated net sales increased 10.1 per cent to $204.4 million from $185.7 million last year. First quarter net earnings declined $1.2 million to $3.5 million from $4.7 million in the prior year. Diluted earnings per share declined 25.0% to $0.45 from $0.60 in the first quarter last year.

All four operating groups reported sales gains led by tailored clothing. Gross margins improved to 18.3 per cent from 18.1 per cent in the previous year due to higher initial margins and improvements in manufacturing operations. First quarter operating expenses increased as a percentage of sales to 15.0 per cent from 13.6 per cent last year. The additional expenses of four new marketing divisions, Tommy Hilfiger Womens Golf, Izod Club Golf, Slates Tailored Clothing and DKNY Kids, were primarily responsible for the increased SG&A expense. These higher expense levels resulted in a 21.2 per cent decrease in operating earnings to $6.7 million from $8.5 million last year.

The balance sheet remains strong. Asset turnover continues to improve. Trailing twelve-month accounts receivable and total inventory turnover were 7.1 and 5.0, respectively. At quarter end, debt to total capitalization stood at 31.3 per cent. The company repurchased 71,400 shares of its common stock during the first quarter.

Segment Highlights
The Oxford Womenswear Group reported an 11.5 per cent increase in net sales to $72.6 million. The gains were achieved with mass merchants and direct mail retailers. Higher initial gross margins and improved manufacturing performance led to a 48.1 per cent increase in first quarter operating earnings to $4.0 million.

Oxford's tailored clothing group, Lanier Clothes, posted a 20.9 per cent sales increase to $43.4 million. Increases were achieved in branded and private label divisions, with continued strong growth in Nautica and Geoffrey Beene. Operating earnings for the group increased 20.0% to $3.0 million. Pricing pressures resulting from the competitive environment at retail were offset by diligent attention to expense control.

First quarter net sales for the Oxford Shirt Group increased 0.5 per cent to $61.6 million from $61.3 million last year. Additional sales from the new marketing divisions offset declines in existing divisions, primarily private label dress shirts and sportshirts. Increased expenses associated with the new marketing divisions, however, resulted in an 81.3 per cent decline in operating earnings to $0.9 million and were responsible for the company's overall earnings decline.

Oxford Slacks reported a 14.6 per cent increase in first quarter net sales to $26.7 million. The increase was driven by growth in the specialty catalog and mass merchant areas. Higher gross margins and the leveraging of operating expenses led to a 30.8 per cent increase in operating earnings to $1.7 million.

Business Outlook
"In light of the difficult retail environment, we are pleased with the first quarter results of three of our operating groups," commented J. Hicks Lanier, chairman and president. "We are obviously disappointed with the results in the Shirt Group, but we remain confident that the situation is temporary. The expenditures in the Shirt Group are an important part of our strategic plan to increase the branded component of our business."