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OI

OXFORD INDUSTRIES INC (OXM)·Q2 2026 Earnings Summary

Executive Summary

  • Adjusted EPS of $1.26 exceeded guidance and beat Wall Street consensus ($1.18), driven by better-than-expected gross margins despite tariff headwinds; revenue of $403.1M was within guidance but modestly below consensus ($406.1M) . Values retrieved from S&P Global.*
  • Management affirmed FY 2025 sales and adjusted EPS guidance and slightly raised GAAP EPS guidance to $2.35–$2.75 (from $2.28–$2.68) while lowering full-year interest expense to ~$7M and guiding a higher tax rate (26–27%) .
  • Tariffs remain the primary margin headwind: estimated gross exposure of ~$80M for FY 2025 mitigated roughly by half through sourcing shifts and accelerated receipts; net EPS impact ~$1.25–$1.75 per share ($25–$35M) baked into guidance .
  • QTD for Q3, total company comps are modestly positive in the low-single-digit range; management highlighted traffic recovery and selective pricing actions (e.g., Tommy Bahama’s Boracay Island Chino at $158) as catalysts .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EPS beat guidance and consensus ($1.26 vs $1.05–$1.25 guided; consensus ~$1.18), on disciplined tariff mitigation and stronger-than-expected gross margin execution . Values retrieved from S&P Global.*
  • Lilly Pulitzer posted positive DTC comps and product momentum (e.g., Vintage Vault capsule exceeding expectations), reinforcing brand health and consumer connection .
  • Emerging Brands delivered revenue growth with positive comp store sales amid a promotional environment, benefiting from new stores and resonant product .

Management quotes:

  • “Adjusted EPS above our guidance range for the second quarter driven by better‑than‑expected gross margins.”
  • “Total company comp sales are modestly positive in the low single-digit range” early Q3 .
  • “Boracay Island Chino…at $158…hasn’t slowed down demand…very high sell-throughs” .

What Went Wrong

  • Tariffs drove ~160 bps adjusted gross margin contraction to 61.7% (≈$9M higher COGS), pressuring consolidated operating margins to 7.0% adjusted and 6.3% GAAP .
  • Tommy Bahama softness (particularly Florida) and Johnny Was negative comps weighed on brand-level performance and consolidated sales, which declined 4% YoY .
  • SG&A deleveraged (up 4.9% adjusted to $223.6M) on store investments and higher labor/occupancy, while the effective tax rate rose to ~30% on unfavorable discrete stock comp items .

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Revenue ($USD Millions)$390.5 $392.9 $403.1
GAAP Gross Margin %60.6% 64.2% 61.4%
Adjusted Gross Margin %60.8% 64.3% 61.7%
GAAP Operating Margin %5.2% 9.2% 6.3%
Adjusted Operating Margin %6.5% 9.8% 7.0%
GAAP EPS ($)$1.13 $1.70 $1.12
Adjusted EPS ($)$1.37 $1.82 $1.26
Consensus EPS (S&P Global)* ($)——$1.18*
Consensus Revenue (S&P Global)* ($USD Millions)——406.1*
  • Values retrieved from S&P Global.*

Segment Net Sales ($USD Millions):

Operating GroupQ4 2025Q1 2026Q2 2026
Tommy Bahama$237.6 $216.2 $229.0
Lilly Pulitzer$74.0 $99.0 $90.3
Johnny Was$47.4 $43.5 $45.4
Emerging Brands$31.6 $34.2 $38.5
Corporate & Other$(0.1) $(0.1) $(0.1)

Channel KPIs ($USD Millions unless noted):

KPIQ1 2026Q2 2026
Full-price retail sales$135 $143
E-commerce sales$114 $150
Wholesale sales$92 $61
Outlet sales$18 $20
Food & beverage sales$34 $29
Total company comp sales (%)-5% -5%
Inventories, net (end of period)$162.3 $166.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2025$1.475B–$1.515B $1.475B–$1.515B Maintained
GAAP EPSFY 2025$2.28–$2.68 $2.35–$2.75 Raised
Adjusted EPSFY 2025$2.80–$3.20 $2.80–$3.20 Maintained
Interest ExpenseFY 2025~$8M ~$7M Lowered
Effective Tax RateFY 2025~26% 26%–27% Raised (range)
Capital ExpendituresFY 2025~$120M ~$120M Maintained
Store OpeningsFY 2025Net +~15 full-price stores Net +~15 full-price stores; 3 new Marlin Bars Maintained
Net SalesQ3 2025N/A$295M–$310M New
GAAP EPSQ3 2025N/A$(1.15)–$(0.95) New
Adjusted EPSQ3 2025N/A$(1.05)–$(0.85) New
DividendQ2 2025$0.69 declared for Aug 1 $0.69 declared for Oct 31 Maintained

Earnings Call Themes & Trends

TopicQ4 2025 (Prior)Q1 2026 (Prior)Q2 2026 (Current)Trend
Tariffs/macroExpected $9–$10M tariff impact; mitigation by spring 2026 Raised gross tariff impact to ~$40M; plan to reduce China sourcing to ~30% in 2025 and <10% next year Gross exposure ~$80M; ~half mitigated via accelerated receipts/sourcing; net EPS impact $1.25–$1.75 Headwind intensified, mitigation progressing
Supply chain & DCLyons, GA DC major capex; completion targeted Q4 2025 “On track” to complete end of fiscal year “On schedule” for late FY 2025 or early FY 2026 Execution on schedule
Product performanceNewness/holiday success; comps +2% in Dec Lilly double-digit growth; strong newness and capsules Lilly Vintage Vault exceeding expectations; Tommy Bahama Boracay Chino high sell-through Positive for key brands
Promotions cadenceMore sales during promotional/clearance periods Expect more business during promotions; margins pressured Promotions largely consistent; Tommy Bahama Friends & Family shifted earlier Stable/optimized cadence
Regional trends(Holiday context) —Tommy Bahama softness in Florida; stronger West Mixed, targeted adjustments
Technology/AIInvest in automation including AI Cloud computing implementation costs impacting cash flows $15M capitalization of cloud computing implementation costs (H1) Ongoing investment

Management Commentary

  • Prepared remarks emphasized disciplined execution: “Delivering sales within our guidance range and an adjusted EPS above our guidance range…driven by better‑than‑expected gross margins” .
  • Brand strategy: “Lilly…posted positive direct-to-consumer total comparable sales…Vintage Vault…exceeded expectations” .
  • Product/pricing: “Boracay Island Chino…at $158…very high sell‑throughs across DTC and wholesale” .
  • Tariff mitigation: “Mitigate roughly half…through accelerated product receipts and shifting sourcing…net tariff impact of approximately $25–$35 million, or $1.25 to $1.75 per share” .

Q&A Highlights

  • Comps/tone: Q3-to-date comps modestly positive in low-single digits, primarily traffic-driven; Tommy Bahama improved sequentially from H1 softness .
  • Promotions: Cadence broadly similar; Friends & Family shifted earlier within the quarter, viewed as effective; gross margin would have increased absent tariffs .
  • Pricing: Select, item-level increases (low/mid-single-digit) to recover gross margin dollars; cautious pacing given tariff uncertainty .
  • Wholesale: Accounts cautious, but brands performing strongly on the floor; specialty stores weaker than majors .
  • Inventory/capex outlook: Expect inventory to decrease as acceleration subsides; capex moderates to ~$75M in 2026 after Lyons DC completion .

Estimates Context

  • Q2 2026 actuals vs consensus: Adjusted EPS $1.26 vs $1.18 consensus (beat); revenue $403.1M vs $406.1M consensus (slight miss). 6 estimates for EPS and revenue underpinned consensus. Values retrieved from S&P Global.*
MetricQ2 2026 Consensus*Q2 2026 Actual
EPS ($)$1.18*$1.26
Revenue ($USD Millions)406.1*403.1
  • Implications: EPS likely revised modestly higher near term given margin execution and tariff mitigation, while revenue expectations may remain cautious amid promotional mix and wholesale softness . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Tariff mitigation is working; margin execution outperformed guidance, enabling an EPS beat despite headwinds—focus on sustainability of gross margin actions into H2 and spring 2026 .
  • Lilly Pulitzer momentum and Emerging Brands growth offset softness at Tommy Bahama/Johnny Was; brand mix and newness remain the core driver of outperformance .
  • Guidance credibility improved: FY sales/adjusted EPS affirmed; GAAP EPS nudged higher; interest expense lowered—watch tax rate drift to 26–27% .
  • Near-term cadence favors promotional periods; management is maintaining pricing integrity where feasible—monitor elasticity (e.g., Boracay Chino success) and traffic trends .
  • Inventory expected to normalize post acceleration; cash generation supports completing Lyons DC and moderating 2026 capex (~$75M), improving FCF trajectory .
  • Q3 guide embeds wider losses vs prior year given tariffs/promotional mix; comps QTD positive should cushion downside—track weekly comp trends and wholesale order books .
  • Tactical positioning: overweight segments/brands with visible product momentum (Lilly, Emerging Brands) and monitor TB assortment fixes and regional merchandising for inflection .