Oxford Industries, Inc., parent of the Tommy Bahama, Lilly Pulitzer, and Johnny Was brands, reported Q2 earnings on an adjusted basis fell 54.5 percent. Sales were down 4 percent with declines across all core brands. Earnings exceeded guidance, and the outlook for the year was reaffirmed.

Oxford’s Emerging Brands’ segment includes Southern Tide, The Beaufort Bonnet Company, Duck Head and Jack Rogers.

Consolidated net sales in the second quarter ended August 2 of fiscal 2025 were $403 million compared to $420 million in the second quarter of fiscal 2024. Sales were in line with guidance, falling within the range of $395 million to $415 million.

EPS on a GAAP basis was $1.12 compared to $2.57 in the second quarter of fiscal 2024, against guidance between $0.92 and $1.12 per share. On an adjusted basis, EPS was $1.26 compared to $2.77 in the second quarter, compared to guidance between $1.05 and $1.25.

Tom Chubb, Chairman and CEO, commented, “Our teams executed well in a dynamic trade and tariff environment, delivering sales within our guidance range and an adjusted EPS above our guidance range for the second quarter, driven by better-than-expected gross margins. We have moved quickly to diversify our sourcing and to pull some inventory receipts forward, calibrating pricing with care to help partially offset the impact on product costs from the incremental tariffs and the evolving trade environment that has emerged this year. The results of our efforts allowed us to continue to offer the product assortment our customer expects from our brands while maintaining our strong margin profile.”

Chubb concluded, “Importantly, we are encouraged by positive comparable store sales performance in the third quarter to date. Total company comp sales are modestly positive in the low single-digit range, reflecting strong connections with our core customers and the development of new and compelling product. While tariffs and macro uncertainty remain near‑term headwinds across our industry, we are focused on what we can control: delivering distinctive product, elevating the customer experience, and maintaining discipline across inventory and expenses. Our balance sheet strength, strong cash flow, and portfolio of powerful lifestyle brands position us to successfully navigate the current environment and create long‑term shareholder value.”

Second Quarter of Fiscal 2025 versus Fiscal 2024

  • Consolidated net sales were $403 million compared to sales of $420 million in the second quarter of fiscal 2024.
  • Full-price direct-to-consumer (DTC) sales decreased 4 percent to $292 million versus the second quarter of fiscal 2024.
  • Full-price retail sales of $143 million were 6 percent lower than the prior-year period.
  • E-commerce sales totaled $150 million, 2 percent lower than the prior-year period.
  • Wholesale sales of $61 million were 6 percent lower than the second quarter of fiscal 2024.
  • Outlet sales of $20 million were 4 percent lower than the prior-year period.
  • Food and beverage sales of $29 million were comparable to the prior year period.
  • Gross margin was 61.4 percent on a GAAP basis, compared to 63.1 percent in the second quarter of fiscal 2024. On an adjusted basis, gross margin was 61.7 percent compared to 63.3 percent in the second quarter of fiscal 2024. The decrease in gross margin was primarily due to approximately $9 million in increased cost of goods sold resulting from additional tariffs implemented in Fiscal 2025, net of mitigation efforts. This decrease was partially offset by improved gross margin during promotional events at Tommy Bahama; a change in sales mix with full-price retail and e-commerce sales representing a higher proportion of net sales at Lilly Pulitzer and Johnny Was; and a change in sales mix with wholesale sales representing a lower proportion of net sales.
  • SG&A was $226 million compared to $217 million last year, with approximately $4 million, or 51 percent, of the expenses that increased during the second quarter of fiscal 2025 due to increases in employment costs, occupancy costs and depreciation expense due to the opening of 26 net new brick and mortar retail locations since the second quarter of fiscal 2024. There were additional increases in employment costs driven by increased incentive compensation, software subscription costs and consulting costs that were partially offset by lower advertising-related costs. On an adjusted basis, SG&A was $224 million compared to $213 million in the prior-year period.
  • Royalties and other operating income decreased by $1 million to $3 million in the second quarter of fiscal 2025, primarily due to a decrease in royalty income from Tommy Bahama, reflecting lower sales by licensing partners.
  • Operating income on a GAAP basis was $25 million, or 6.3 percent of net sales, compared to $53 million, or 12.5 percent of net sales, in the second quarter of fiscal 2024. On an adjusted basis, operating income decreased to $28 million, or 7.0 percent of net sales, compared to $57 million, or 13.5 percent of net sales, in the second quarter of fiscal 2024.
  • Interest expense increased to $2 million, primarily due to a higher average outstanding debt balance during the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
  • The effective income tax rate in the second quarter of fiscal 2025 was 30.1 percent, which primarily reflects the unfavorable net discrete tax expense related to stock-based compensation vesting shortfalls during the quarter. The effective tax rate in the second quarter of fiscal 2024 was 22.5 percent, which primarily reflects the favorable net discrete tax benefits for stock-based compensation vesting during the quarter.

Balance Sheet and Liquidity
Inventory increased $27 million, or 19 percent, on a LIFO basis and $29 million, or 13 percent, on a FIFO basis compared to the end of the second quarter of fiscal 2024. Inventories increased in all operating segments with the exception of Johnny Was due primarily to impacts associated with the U.S. tariffs that were implemented in the first half of fiscal 2025 including accelerated purchases of inventory that were implemented to try and minimize the impact of potential, pending tariff increases and $5 million of increased costs capitalized into inventory after the implementation of the tariffs.

During the first half of fiscal 2025, cash provided by operations was $80 million compared to $122 million in the first half of fiscal 2024. The decrease in cash flow from operations reflects the result of lower net earnings, working capital needs, including accelerating inventory purchases, and $15 million of capitalizable implementation costs associated with cloud computing arrangements.

Borrowings outstanding increased to $81 million at the end of the first half of fiscal 2025, compared to no borrowings outstanding at the end of the second quarter of fiscal 2024. During the first half of fiscal 2025, share repurchases of $55 million, capital expenditures of $55 million primarily associated with the project to build a new distribution center in Lyons, Georgia, and the opening of 11 new stores, including two Tommy Bahama Marlin Bars, $15 million of capitalizable implementation costs associated with cloud computing arrangements, dividend payments of $21 million, and working capital requirements exceeded cash flow from operations. The company had $7 million in cash and cash equivalents, compared to $18 million at the end of the second quarter of fiscal 2024.

Dividend
The Board of Directors declared a quarterly cash dividend of $0.69 per share. The dividend is payable on October 31, 2025, to shareholders of record as of the close of business on October 17, 2025. The company has paid dividends every quarter since its initial public offering in 1960.

Outlook
For fiscal 2025 ending on January 31, 2026, the company is affirming its sales and adjusted EPS guidance. The company expects net sales to be in the range of $1.475 billion to $1.515 billion, compared to net sales of $1.52 billion in fiscal 2024. In fiscal 2025, GAAP EPS is expected to be between $2.35 and $2.75 compared to fiscal 2024 GAAP EPS of $5.87. Adjusted EPS is expected to be between $2.80 and $3.20, compared to fiscal 2024 adjusted EPS of $6.68.

Based on current tariff policies and historical sourcing patterns, the company estimates that, absent proactive mitigation efforts, it would incur incremental tariffs of approximately $80 million during fiscal 2025. The company estimates that it has been able to mitigate roughly half of this fiscal 2025 exposure through actions already effectuated, including accelerating product receipts and shifting its sourcing. After considering additional vendor concessions and selected, second-half price increases, the company’s current annual EPS and adjusted EPS guidance reflect a net tariff impact of approximately $25 million to $35 million, or approximately $1.25 to $1.75 per share.

For the third quarter of fiscal 2025, the company expects net sales to be between $295 million and $310 million compared to net sales of $308 million in the third quarter of fiscal 2024. Earnings on a GAAP basis per share are expected to be in a range of a loss of $1.15 to $0.95 in the third quarter of fiscal 2025, compared to a GAAP loss per share of $0.25 in the third quarter of fiscal 2024. Adjusted earnings on an adjusted basis per share are expected to be in a range of a loss of $1.05 to $0.85 compared to an adjusted loss of $0.11 per share in the third quarter of fiscal 2024.

The company anticipates interest expense of $7 million in fiscal 2025, with interest expense expected to be between $1 million and $2 million per quarter for the remainder of fiscal 2025. The company’s effective tax rate is expected to be approximately 26 percent to 27 percent for the full year of fiscal 2025.

Capital expenditures in fiscal 2025, including the $55 million in the first half of fiscal 2025, are expected to be approximately $120 million compared to $134 million in fiscal 2024. The planned year-over-year decrease relates primarily to lower anticipated new store openings in fiscal 2025. By the end of fiscal 2025, we expect a year-over-year net increase of approximately 15 full-price stores, including three new Marlin Bars. The $120 million in expected capital expenditures in fiscal 2025 includes capital expenditures related to the completion of the project to build a new distribution center in Lyons, Georgia and capital expenditures related to new stores and Tommy Bahama Marlin Bars.

Image courtesy Tommy Bahama