Oxford Industries (NYSE:OXM) executives highlighted improving sales trends exiting fiscal 2025, ongoing tariff pressure, and plans to lean on operational and sourcing initiatives to support profitability in fiscal 2026, according to the company’s fourth-quarter earnings call.
Fourth-quarter finish and early fiscal 2026 trends
Chairman and CEO Tom Chubb said fourth-quarter net sales and adjusted earnings per share landed at the midpoint of guidance ranges, excluding charges tied to the Saks Global bankruptcy that were not known when the company last updated its outlook. He described the holiday season as “uneven,” citing pressured traffic and conversion trends across much of the portfolio and a highly promotional marketplace.
Brand performance has varied early in fiscal 2026:
- Lilly Pulitzer: Chubb said comps have been below plan, which the company largely attributes to colder weather along the eastern seaboard, including Florida and the Southeast. Management later noted that February was unusually cold in Florida and that Lilly, which is more East Coast-centric than the company’s other warm-weather brands, did not have the same West Coast offset.
- Johnny Was: Comps remain negative but were described as performing in line with expectations and improving through the quarter as marketing and merchandising actions take hold.
- Emerging Brands: Chubb said quarter-to-date performance has been “quite strong,” with comps “well into double digits.”
Operational initiatives: new distribution center and sourcing shifts
Management emphasized investments intended to strengthen Oxford’s long-term operating platform. Chubb said the company completed construction of a new distribution center in Lyons, Georgia shortly after year-end and began receiving initial inventory shipments. He called Lyons the company’s most significant infrastructure investment in many years and cautioned that Oxford does not expect meaningful near-term financial benefit during the early stages of the ramp.
Oxford also pointed to sourcing diversification as a key initiative. Chubb said that early in fiscal 2025, about 40% of apparel and related products were expected to be sourced from producers in China. Through actions taken during the year, that level declined to slightly less than 30% of product purchases in fiscal 2025, and the annualized run rate entering fiscal 2026 has been reduced to approximately 15%.
Fiscal 2025 financial summary: tariffs and expenses pressured profitability
CFO and COO Scott Grassmyer said fiscal 2025 consolidated net sales decreased 3% to $1.48 billion. Direct-to-consumer sales (full-price brick-and-mortar and e-commerce) were down 3%, driven by a total DTC comp of -4%, partially offset by new stores. Outlet sales declined 2%. Food and beverage revenue increased 4%, driven primarily by the addition of four new locations during the year, partially offset by a slightly negative comp. Wholesale revenue decreased $13 million, or 5%, which Grassmyer attributed primarily to continued pressure from the decline in the specialty store market. He added that sell-through at key department store customers has been encouraging and that the company believes it has been able to grow or maintain market share.
On profitability, Grassmyer said adjusted gross margin contracted 190 basis points to 61.3%, driven primarily by $30 million in higher tariffs (about 200 basis points). He said that absent tariffs, gross margin would have increased year over year. He also cited a higher proportion of sales during promotional and clearance events at Tommy Bahama and Lilly Pulitzer, partially offset by lower freight costs due to contract renegotiations and a mix shift toward DTC.
Adjusted SG&A expenses (excluding depreciation and amortization under the company’s updated reporting approach) increased 4% to $815 million. Grassmyer attributed nearly half of the increase to costs associated with store growth, including 10 net new retail stores opened in fiscal 2025 (including four food and beverage locations) and the annualization of 30 net new stores added in fiscal 2024. He also cited higher software and professional service fees and credit loss tied primarily to the Saks bankruptcy, partially offset by lower advertising costs.
Adjusted EBITDA was $107 million, or a 7.2% margin, compared with $193 million and a 12.7% margin in the prior year. Grassmyer said adjusted EPS was $2.11, which included $0.19 of charges related to the Saks Global bankruptcy.
Tariffs, inventory, and balance sheet items
Grassmyer said inventory decreased 1% on a LIFO basis and increased 2% on a FIFO basis, with the increase driven by $11 million of incremental tariff costs capitalized into inventory. He also noted that during fiscal 2025 the company paid approximately $40 million of tariffs imposed under IEEPA that were later struck down by the Supreme Court. While those payments could potentially translate into a receivable, he said timing and collectability remain uncertain and no potential recovery was included in fiscal 2025 results or fiscal 2026 guidance.
Oxford ended fiscal 2025 with $116 million of outstanding long-term debt, up from $31 million a year earlier. Grassmyer said the company generated $120 million in cash flow from operations, while capital expenditures were $108 million, primarily related to the Lyons distribution center and new store locations. The company also repurchased $55 million of shares and paid $42 million of dividends.
Fiscal 2026 outlook: modest sales growth, tariff headwinds, and Lyons ramp costs
For fiscal 2026, management guided to net sales of $1.475 billion to $1.53 billion, which Grassmyer described as approximately flat to up 4% versus fiscal 2025. The plan assumes growth at Tommy Bahama, Lilly Pulitzer, and Emerging Brands, partially offset by a decline at Johnny Was. Total comps are expected to range from approximately flat to up 3%, with additional lift from non-comp locations opened in 2025. By channel, the company expects mid-single-digit increases in brick-and-mortar and e-commerce DTC, low double-digit growth in food and beverage (including annualization of new units), and a mid-single-digit decline in wholesale due to continued specialty store pressure.
On margins, Oxford is assuming tariff rates remain generally consistent with incremental rates put in place during fiscal 2025 and is not incorporating benefits from the Supreme Court decision or assuming refunds. Under those assumptions, Grassmyer said the company expects $50 million of IEEPA-related tariff headwinds in fiscal 2026, including an incremental $20 million headwind versus fiscal 2025, equating to about a 150 basis point gross margin impact and roughly $1 per share. The impact is expected to be front-loaded, with an estimated $12 million headwind (about 300 basis points) in the first quarter. After Q1, the company expects year-over-year tariff headwinds of about $2 million to $4 million per quarter.
Excluding tariffs, management expects benefits from price increases, DTC mix, and a slightly lower promotional cadence to support a modest expansion in adjusted gross margin to approximately 62%. Grassmyer said price increases in the guidance range from 4% to 8% and vary by brand, reflecting a more elevated assortment and higher pricing on new product with relatively limited like-for-like increases on existing items.
Oxford expects SG&A (excluding depreciation and amortization) to grow in the low single-digit range, driven by higher software-related costs, annualization of costs from 2025 store openings, a handful of additions including a new Tommy Bahama Marlin Bar, and higher incentive compensation. Within EBITDA, the company expects royalties and other income to increase about $2 million. Guidance also includes increased losses of $5 million (about $0.25 per share) related to the Lyons distribution center ramp as the company operates two facilities during the transition.
For adjusted EPS, Oxford guided to $2.10 to $2.70 for fiscal 2026, compared with $2.11 in fiscal 2025 (which included the $0.19 Saks-related charges). For the first quarter, the company expects sales of $385 million to $395 million and adjusted EPS of $1.20 to $1.30, compared with $393 million in sales and $1.82 in adjusted EPS in the first quarter of fiscal 2025. Grassmyer said the year-over-year EPS decline in Q1 is largely due to the incremental tariff impact, which he quantified at $0.60 per share.
Capital expenditures are expected to fall to about $65 million in fiscal 2026 from $108 million in fiscal 2025, including roughly $20 million of final costs to complete Lyons early in fiscal 2026. Management said the company expects store count to be relatively flat for the year as it opens a handful of new locations at Tommy Bahama and Lilly Pulitzer while closing some stores in other brands. Oxford expects cash flow from operations of approximately $130 million, and management said the company plans to pay down a meaningful portion of its debt while continuing its dividend, which the board increased 1% to $0.70 per share.
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.
