Fashion conglomerate Oxford Industries (NYSE: OXM) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, but sales fell by 1.3% year on year to $392.9 million. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $405 million was less impressive, coming in 1.1% below expectations. Its non-GAAP profit of $1.82 per share was in line with analysts’ consensus estimates.
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Oxford Industries (OXM) Q1 CY2025 Highlights:
- Revenue: $392.9 million vs analyst estimates of $384.8 million (1.3% year-on-year decline, 2.1% beat)
- Adjusted EPS: $1.82 vs analyst estimates of $1.82 (in line)
- Adjusted EBITDA: $54.08 million vs analyst estimates of $56.15 million (13.8% margin, 3.7% miss)
- The company dropped its revenue guidance for the full year to $1.50 billion at the midpoint from $1.51 billion, a 1% decrease
- Management lowered its full-year Adjusted EPS guidance to $3 at the midpoint, a 37.5% decrease
- Operating Margin: 9.2%, down from 13.2% in the same quarter last year
- Locations: 353 at quarter end, up from 322 in the same quarter last year
- Market Capitalization: $744.2 million
StockStory’s Take
Oxford Industries’ first quarter results reflected diverging performance across its portfolio of brands and channels in the face of shifting consumer sentiment. CEO Tom Chubb pointed to ongoing caution among discretionary shoppers, noting that "the consumer responds most strongly to new, innovative, and differentiated products and to promotions where the perceived value is high." The standout in the quarter was Lilly Pulitzer, which delivered double-digit growth and positive comparable sales through a focus on its most loyal customers and an expanded assortment of new styles. Meanwhile, Tommy Bahama and Johnny Was faced pressures from lower demand and higher promotional activity. Management attributed margin contraction to increased freight costs, adverse sales mix, and the initial impact of new tariffs. The company also continued expanding its physical footprint, adding eight net new stores, including two Tommy Bahama Marlin Bars in new mall locations.
Looking ahead, management’s guidance incorporates significant gross margin pressure from higher tariffs and continued cautious consumer behavior, especially for discretionary fashion. CFO Scott Grassmeyer explained that the company now assumes elevated tariffs will remain in place for the rest of the year, leading to a projected $40 million in additional costs and a 200-basis-point contraction in gross margin. Efforts to mitigate these impacts include accelerating supply chain diversification away from China and targeted price increases, particularly in Tommy Bahama, where average unit retail (AUR) is expected to rise by less than 3% next spring. Chubb also highlighted plans to strengthen profitability at Johnny Was and expects supply chain shifts to be "fully mitigated by spring of 2026," though short-term turbulence remains likely.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to varying brand momentum, cost inflation from tariffs, and the company’s ongoing investments in store expansion and supply chain adjustment.
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Lilly Pulitzer outperformed: The Lilly Pulitzer brand stood out with double-digit growth and positive comps, driven by an increased focus on its most loyal customers and higher newness in assortment. CEO Tom Chubb noted the brand’s “newness quotient was excellent at more than 50% this spring,” up from 40% last year, which resonated particularly well with core shoppers.
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Tommy Bahama store strategy shift: The opening of two Tommy Bahama Marlin Bars in non-traditional, mall-based locations marked a strategic push to reach new customer segments and enhance the brand experience. Management expects these conversions to increase retail sales and provide a more immersive brand interaction beyond its traditional warm-weather markets.
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Johnny Was profitability focus: After several years of rapid retail expansion, management is shifting Johnny Was’ emphasis toward profitability improvements, including merchandising, marketing efficiency, and retail execution. Chubb stated that while “not projecting a big rebound” in the near term, efforts are underway to bring margins closer to those of other portfolio brands.
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Tariff-driven supply chain realignment: The evolving U.S. tariff landscape required Oxford Industries to accelerate its plans to reduce sourcing from China. Management reported progress, targeting less than 10% of sourcing from China by next year, compared to 40% last year, and expects supply chain shifts to improve margins by 2026.
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Wholesale channel resilience: The wholesale business outperformed specialty retail, with increased sales to department stores and off-price channels. Chubb highlighted that “performance at wholesale has been quite good,” reinforcing the strength of the company’s brands in a competitive environment, even as specialty stores remain challenged.
Drivers of Future Performance
Oxford Industries’ outlook for the remainder of the year is shaped by tariff-related cost pressures, cautious consumer trends, and ongoing supply chain diversification.
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Tariffs and gross margin contraction: Elevated tariffs on imports, especially from China, are expected to drive a $40 million increase in costs and reduce gross margin by approximately 200 basis points for the year. Management is working to mitigate these pressures through shifts in sourcing, but acknowledges that the bulk of the impact will be felt in 2025.
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Consumer spending behavior: The company anticipates continued promotional activity, as shoppers remain value-conscious amid economic uncertainty. Management expects more sales to occur during promotional periods, which could impact margins, but aims to balance this with modest price increases in select brands.
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Store expansion and supply chain investments: Oxford Industries is investing in new retail locations, including additional Tommy Bahama Marlin Bars and a state-of-the-art distribution center in Georgia. While these initiatives are expected to support long-term growth, they are contributing to higher SG&A expenses in the near term and will be monitored for their impact on efficiency and profitability.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) progress in shifting Oxford Industries’ sourcing away from China to mitigate tariff pressures, (2) whether the momentum at Lilly Pulitzer can be maintained through continued product innovation and loyal customer engagement, and (3) the impact of new store formats, such as Tommy Bahama Marlin Bars, on overall sales. We will also monitor how quickly profitability initiatives at Johnny Was begin to yield results.
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