Oxford Industries Inc Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ashley Owens - KeyBanc Capital Markets Inc - Analyst : Hi, good afternoon. Just wondering if you could provide a little bit of color on the trends by brand embedded in the second-quarter guidance as well as any color by brand on the exit rate leaving the first quarter? And then I have a follow-up. K. Scott Grassmyer - Oxford Industries Inc - Chief Financial Officer, Chief Operating Officer, Executive Vice President Yeah. We're expecting for the second quarter all of our brands have certainly improved and we're expecting positive comps and are having positive comps so far in the second quarter. So we expect mid-single positives. It certainly has accelerated as the quarter has gone on, June being stronger than May.

Question: Ashley Owens - KeyBanc Capital Markets Inc - Analyst : Okay. Great. And then just quickly on the gross margins. You called out some contraction expected for 2Q, there is some in 1Q, but you're guiding to flat for the year. I think if we back into it, you're expecting to see some expansion in the back half. Maybe just help us a bit with the shaping there. And also any color on what's driving that? Thanks. K. Scott Grassmyer - Oxford Industries Inc - Chief Financial Officer, Chief Operating Officer, Executive Vice President Yeah. I think some of it is -- a lot of these new stores will be -- especially in the fourth quarter, will be operating. So I think our direct business and

Question: Ashley Owens - KeyBanc Capital Markets Inc - Analyst : Okay. Great. Thank you.

Question: Janine Stichter - BTIG, LLC - Analyst : Hi, good afternoon. I was hoping you could elaborate a little bit on the wholesale side of the business. It sounds like it's relatively on plan with what happened in Q1, now expecting return to growth for the remainder of the year. But I would just love to hear a bit more about what you're hearing from your wholesale partners. And then maybe with that, if you could elaborate a bit on where you see additional door opportunities, potential for new door growth for both Tommy and for Lilly? Thank you.

Question: Janine Stichter - BTIG, LLC - Analyst : Great. And maybe then just one more. You talked about a bit about consumer cautiousness, and it sounds like that's only gotten worse as we go through the year. I know your consumer is really gravitating towards newness, especially Tommy Bahama. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 12, 2024 / 8:30PM, OXM.N - Q1 2024 Oxford Industries Inc Earnings Call Do you feel like you have the right assortment to deliver that newness or is there anything we should expect in terms of how you might pivot the merchandise just to cater to what they're looking for in this environment? Thank you.

Question: Janine Stichter - BTIG, LLC - Analyst : Good. Thanks so much for the color and best of luck.

Question: Mauricio Serna - UBS Securities LLC - Analyst : Great. Good afternoon and thanks for taking my questions. First one on the updated sales guidance. I just want to understand, I think you mentioned that you expect comp sales up mid-single digits second quarter. And I think that's also the case for the rest of the year or second half. I just want to understand like what was the prior outlook that you had contemplated given that you lowered the sales guidance? And maybe any distinctions that you would make on where you're seeing under or over-performance across the brand's portfolio? Thank you. K. Scott Grassmyer - Oxford Industries Inc - Chief Financial Officer, Chief Operating Officer, Executive Vice President Yeah. It was [few points higher] in our original guidance. And for the year, we're expecting to come out with a slightly positive comp. So we overcome that negative in Q1, where before we were closer to the mid-single for the year. We're now in more the low single for the year.

Question: Mauricio Serna - UBS Securities LLC - Analyst : Got it. And then just very lastly, on the guidance, I think you mentioned you expect SG&A -- sorry, operating margin to decrease modestly. I think if you back into the guidance, I think it's pretty much in line which were -- what you guided for last quarter, so I just want to understand from an SG&A dollar standpoint, are you also reducing that expectation just because of the lower sales? Or how should we think about SG&A dollars? Thank you. K. Scott Grassmyer - Oxford Industries Inc - Chief Financial Officer, Chief Operating Officer, Executive Vice President SG&A, it's been moderated some -- yeah, but they'll still be higher year-over-year. And probably in the Q2 and Q3, probably somewhere around $20 million higher. Get to Q4, you have one less week. So it's probably about half that roughly. So definitely moderated from -- in dollars from our earlier forecast, but still a higher percent of -- slightly higher percent of sales than our earlier forecast.

Question: Mauricio Serna - UBS Securities LLC - Analyst : Yeah. Got it. Okay. Very helpful. Thank you.

Question: Tracy Kogan - Citigroup Global Markets Inc - Analyst : Hey. It's Tracy Kogan filling in for Paul. I was hoping you guys could say what you thought was the reason for the comp inflection in 2Q. I know you referenced the easier comparison. So wondering if you think it's just that. And if you think that easier comparisons is the reason that it's gotten REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 12, 2024 / 8:30PM, OXM.N - Q1 2024 Oxford Industries Inc Earnings Call better say in June versus May? Or is there some new product introduction or maybe promotions that's driving this inflection? And then I have a follow-up. Thanks. K. Scott Grassmyer - Oxford Industries Inc - Chief Financial Officer, Chief Operating Officer, Executive Vice President Well, part of it is the more favorable comparison, the easier comparison to last year, but also, as we pointed out in March and again today, we have this shift in the way that we're running some of the events at Lilly that will result in them probably having a really strong comp in the second quarter. And that will help pull the whole enterprise loan a bit.

Question: Tracy Kogan - Citigroup Global Markets Inc - Analyst : And did you see the same -- I know there was more of a shift at Lilly, but have you seen a similar inflection to positive comps at Tommy? And then my second question was just on, in general, do you think you're seeing any price resistance from the consumer? I don't know if your consumer research is telling you anything there. Or is it just the consumer being generally more cautious?

Question: Tracy Kogan - Citigroup Global Markets Inc - Analyst : Thank you. And then just back to the Tommy Bahama question about this quarter and whether you had seen that similar inflection to at least a positive comps, maybe not to [2% to 3%]?

Question: Tracy Kogan - Citigroup Global Markets Inc - Analyst : Got it. Thank you very much. Good luck, guys.