Oxford Industries NYSE: OXM reported first-quarter fiscal 2026 sales that were roughly in line with its expectations while adjusted earnings came in better than anticipated, as stronger gross margin helped offset a significant year-over-year increase in tariff costs.
Chairman, President and CEO Thomas C. Chubb III said on the company’s earnings call that the quarter showed “several important positive takeaways,” led by Tommy Bahama and continued growth in Emerging Brands, but also highlighted ongoing challenges at Lilly Pulitzer and Johnny Was.
“Overall, sales in the first quarter were in line with our expectations, and earnings were better than we anticipated, primarily due to stronger than expected gross margin,” Chubb said. He added that Oxford absorbed an $11 million, or $0.55 per share, increase in tariff costs during the quarter compared with the prior year.
First-Quarter Sales Hold Steady as Comps Decline
CFO and COO K. Scott Grassmyer said consolidated net sales were $391 million in the first quarter, compared with $393 million in the prior-year period and above the midpoint of the company’s guidance range of $385 million to $395 million.
Total company comparable sales decreased 2%, with both retail and e-commerce comps down 2%. Wholesale sales declined 5%, which Grassmyer said was better than the company’s original forecast. Food and beverage sales increased 14%, driven primarily by non-comparable locations.
Adjusted gross margin contracted 90 basis points to 63.4%, as higher tariff-related costs added about 280 basis points to cost of goods sold. Grassmyer said that pressure was partly offset by sourcing and pricing changes, lower freight costs following carrier contract renegotiations and a sales mix shift toward direct-to-consumer channels.
Adjusted SG&A expenses rose 1% to $209 million, with increases tied to new retail and food and beverage locations, software and consulting costs and expenses associated with the transition to the company’s Lyons, Georgia, distribution center. Oxford reported adjusted EBITDA of $45 million, compared with $54 million a year earlier, and adjusted earnings per share of $1.39.
Tommy Bahama Leads Portfolio Performance
Tommy Bahama delivered the strongest brand performance in the quarter, with total sales increasing year over year. Grassmyer said the brand benefited from mid-single-digit comps in direct-to-consumer channels, partially offset by lower wholesale sales.
Chubb said Tommy Bahama saw strength in both men’s and women’s, with women’s direct-to-consumer sales up about 7.5% in the quarter. He said the women’s business was driven by fashion categories, including pants and wovens, while men’s benefited from core products including M-Field, Boracay and linen programs.
Chubb also highlighted that 30% of Tommy Bahama e-commerce orders in the quarter included both a men’s and women’s item, up from 25% in the prior year. He said the brand’s performance reflected “a better assortment balance, improved key item execution, and the enduring appeal of its relaxed, warm weather lifestyle positioning.”
Lilly Pulitzer Falls Short as Management Targets Fixes
Lilly Pulitzer’s results were below company expectations, with Grassmyer citing significant declines in e-commerce and a difficult comparison to the prior year. The brand posted low-teen negative comps overall.
Chubb said the company initially believed colder February weather in Florida was a contributing factor, but later identified additional merchandising and execution issues. These included gaps in certain opening price points, allocation opportunities and an assortment that leaned too heavily into vintage prints and novelty products.
“The business did not execute to its potential in the first quarter,” Chubb said. “We did not bring together product pricing, allocation, and messaging. That is on us.”
Chubb said some fixes, such as messaging, marketing and promotional adjustments, can happen more quickly. Other improvements tied to merchandising and product development will take longer to flow through the assortment, with more meaningful changes expected around the resort season.
Johnny Was Turnaround Focuses on Margin and Store Base
At Johnny Was, management said the brand remains on track with its turnaround plan, though sales were pressured. Chubb said wholesale was the most challenged channel, in part because Johnny Was has greater exposure than Oxford’s other brands to specialty stores, a market he said has declined meaningfully in recent years.
Sales were also lower to off-price retailers because of healthier inventory levels, and to Saks Global, which Chubb said has been affected by its bankruptcy process. Direct-to-consumer performance was “much more in line” with company expectations, he said.
Oxford is working to improve design cohesion, refine the assortment, strengthen marketing and drive execution across channels. The company also closed five underperforming Johnny Was stores in the first quarter and will continue reviewing the store base by market and location.
Grassmyer said Johnny Was has made progress on gross margin by buying inventory tighter, reducing promotions and improving gross margin return on investment. He said the company expects comps at Johnny Was to remain difficult in the first half but could begin to turn positive in the second half as product and assortment changes take effect.
Guidance Updated as Trends Soften
Oxford narrowed its full-year sales outlook by lowering the top end of its range, citing softer trends in April, May and early June, continued caution among consumers and ongoing weakness at Lilly Pulitzer. For fiscal 2026, the company now expects net sales of $1.475 billion to $1.505 billion, compared with $1.478 billion in fiscal 2025.
The sales plan assumes growth at Tommy Bahama and Emerging Brands, partially offset by declines at Lilly Pulitzer and Johnny Was. Grassmyer said full-year comparable sales are now expected to range from slightly negative to slightly positive, down from the company’s prior expectation for flat to low-single-digit positive comps.
Oxford tightened its full-year adjusted EPS guidance to $2.30 to $2.70, compared with adjusted EPS of $2.11 last year. Grassmyer said the outlook assumes the current lower tariff rate of 10% remains in place for the rest of the year and does not include the impact of any tariff refunds.
Grassmyer said Oxford paid about $40 million of tariffs in fiscal 2025 and an additional $5 million in the first quarter of fiscal 2026 that were ultimately invalidated by a February Supreme Court ruling. The company has filed approximately $25 million in phase one claims and has begun receiving refunds. He said any tariff refund proceeds would primarily be used to repay debt.
For the second quarter, Oxford expects sales of $380 million to $400 million, compared with $403 million a year earlier, and adjusted EPS of $1.20 to $1.40, compared with $1.26 last year. Management said second-quarter comps are expected to be in the low-single-digit negative to flat range, with wholesale sales down in the high-single-digit range.
Chubb said the consumer backdrop remains unsettled, with shoppers becoming more cautious and selective amid macroeconomic and geopolitical pressures. Still, he said Oxford plans to avoid short-term actions that could harm its brands over the long term.
About Oxford Industries NYSE: OXM
Oxford Industries, Inc, incorporated in 1942 and headquartered in Atlanta, Georgia, is a leading designer, marketer and distributor of high-quality men's and women's lifestyle apparel and accessories. The company's product portfolio features a mix of owned brands and licensed partnerships that span casual, resort and performance categories. Key owned brands include Tommy Bahama, renowned for its island-inspired menswear and women's sportswear, and Southern Tide, which offers coastal-focused clothing and footwear.
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