Oxford Q2 earnings beat forecast despite sales dip

US: Oxford Q2 earnings beat forecast despite sales dip

By just-style.com | 10 September 2008

Apparel group Oxford Industries beat its own forecast in recording second quarter earnings per share of US$0.43, despite a 5.8% sales fall.

The company had predicted EPS of $0.31-0.36 for the period ended 2 August, but exceeded that figure - excluding charges and adjustments - as it continued a strategic restructuring of its business.

It has been pursuing a programme of exiting or restructuring some under-performing parts of its core Lanier Clothes and Oxford Apparel businesses.

Net sales fell 5.8% to $230.5m, with key brands Tommy Bahama down 2.1% to $112m, and Ben Sherman falling 11% to $32.5m.

The company blamed the difficult retail environment and brand repositioning respectively for the sales declines.

Oxford Industries chairman and CEO J Hicks Lanier said he was pleased with the results, given the "difficult tenor" of the current retail environment.

"We believe that the actions we've taken will result in leaner and more focused legacy businesses," he added. "As we rationalise those businesses, we are extracting significant working capital and improving our return on investment."

The growth and development of Tommy Bahama and Ben Sherman were key to the company's long-term strategy, Lanier said.

"We are confident that the strength of these brands can support an expanded direct-to-consumer business, a broader international reach and an expanded mix of products."

First-half sales were down 6.2% to $503.5m. Excluding charges, EPS was down to $1.03 from $1.44 last year.

Oxford Industries expects third quarter sales of $250-260m, and EPS of $0.37-0.42.

For the full year, the company expects to meet its previously issued guidance of net sales of $1bn and EPS of $1.90-2.05.

Sectors: Apparel, Finance

Companies: Oxford Industries, Tommy Bahama