US: Oxford Q2 profit jumps 21%, women's wear growth
Apparel group Oxford Industries has enjoyed a 21% second-quarter profit leap, as increases in women's clothing partially offset weaker trading within the Ben Sherman business.
For the quarter ended 2 December, profit totalled US$11m compared to $9.11m last year, as net sales grew 7% to $335m from $313m a year ago.
For the first half of financial 2006, net sales increased 16% to $671m from $578m in the same period last year.
First-half diluted earnings per common share increased 57% to $1.40 from $0.89 in the same period last year.
Chairman and chief executive J Hicks Lanier commented: "We are very pleased to continue our strong performance for the first half of fiscal 2006.
"All three operating segments contributed to the sales growth. Our focus this year on operating discipline and better execution has led to enhanced profitability through higher margins."
Lanier said the impact had been the most notable in the Tommy Bahama Group, which saw a 72% jump in second-quarter profit compared to last year.
Tommy Bahama reported net sales of $90m in the second quarter compared to $86m last year. Net sales in Tommy Bahama's core branded business, which excludes private-label sales of $2.8m in last year's second quarter, increased 8% to $90m from $84m in the same period last year.
Men's wear reported a second quarter net sales increase of 3% to $187m from $181m in the same period last year. Ben Sherman contributed net sales of approximately $48m compared to about $53m in the year-ago period. The UK business, which accounts for more than 70% of Ben Sherman's net sales, was responsible for the net sales decline.
In the UK and continental Europe, where Ben Sherman has implemented a program to pursue higher quality distribution, the retail environment has remained very challenging, the company said.
Excluding Ben Sherman, the men's wear group's historical businesses generated a net sales increase of approximately 8% for the quarter on modest growth in tailored clothing, dress shirts and sportswear.
The men's wear group also benefited from new marketing initiatives including Orvis Signature, Solitude, Ben Sherman dress shirts and suits and the recently acquired Arnold Brant tailored clothing line.
Second-quarter net sales for the women's wear group increased 26% to $57m from $45m in the second quarter of last year. The company noted that increased shipments to the segment's two largest customers, Wal-Mart and Target, were responsible for the net sales increase.
The company continues to project full-year diluted earnings per common share of $3.42 to $3.52 on net sales of approximately $1.38bn to $1.40bn. For the third quarter, the company expects net sales in a range of $355m to $365m and diluted earnings per common share of $0.80 to $0.85. For the fourth quarter, the company expects sales in a range of $360m to $370m and diluted earnings per common share of $1.21 to $1.26.
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