US: Weak demand hits Oxford Industries Q1
Oxford Industries has suffered a fall in first quarter net sales and earnings per share as the company suffered from weakening consumer demand.
In a statement released yesterday (9 June) the branded apparel maker said consolidated net sales fell 20.6% to US$216.7m, from $272.9m in the first quarter of fiscal 2008.
Quarterly profit slumped 31.6% to $6.5m or $0.42 per share, from $9.5m or $0.59 per share a year earlier.
J Hicks Lanier, chairman and CEO, said: "Despite reduced consumer demand for discretionary items, including apparel, Oxford is solidly profitable and we expect to continue to generate substantial cash flow from operations."
Lanier continued: "For the first quarter of this year, we reduced SG&A by over 20% from $99.6m to $78.7m. We also reduced inventories from $122.7m at the end of the first quarter last year to $103.3m as of 2 May 2009.
Its Tommy Bahama brand reported a 23.9% drop in net sales to $98.4m for, compared to $129.3m last time.
"The decrease in net sales was primarily due to the impact of the difficult retail environment on both sales at wholesale and in its owned retail stores," the company said.
Tommy Bahama's operating income fell to $12.3m from $19.5m on lower sales and lower royalty income.
Ben Sherman saw its net sales tumble 33.9% to $24.2m from $36.6m, and swung to an operating loss of $2.0m from an operating income of $0.3m in the prior year.
The company blamed the weak British pound and challenging consumer market conditions in the UK.
Net sales for Lanier Clothes were $31.5m, down from $38.7m, but quarterly operating income rose to $2.7m from breakeven results last time.
"The reduced sales and improved profitability resulted from Lanier Clothes' exit from the Nautica and Oscar de la Renta businesses and restructuring of the Arnold Brant business as well as initiatives to reduce overhead," the company said.
Net sales at Oxford Apparel fell 8.0% to $63.2m from $68.7m as the firm exited some underperforming lines, and operating income was flat at $5.2m.
The company said that given the lack of visibility caused by the highly uncertain economic environment, it will not be providing 2009 sales and earnings guidance.
It also noted that its plans for 2009 are "conservative and assume a continuation of the difficult economic environment."
It said the first quarter results were in line with its expectations.
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