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Tommy Bahama Will Invest in New Marlin Bars This Year

The parent of Tommy Bahama and Lily Pulitzer plans to increase its IT spending and invest in new hospitality businesses this year.

In a Nutshell: While “substantially” all of Oxford Industries’ stores and restaurants are open, many continue to operate under certain restrictions, the company said.

“This time last year, we were facing incredible uncertainties related to the pandemic, its duration and its effect on our business. In response we established three priorities for fiscal 2020: protect our people and our customers, protect our brands, and preserve liquidity. We were successful in achieving these important and fundamental goals,” Thomas C. Chubb III, chairman and CEO, said. “At the same time, as we moved through the year and our business gained momentum, it became even more evident that the strong strategic positioning of our brands in the marketplace combined with our omni-channel capabilities provides us with clear and compelling competitive advantages. The key learnings from the past year have helped further sharpen our focus on our highest return opportunities.”

Chubb said the strength of Oxford’s e-commerce platforms and digital outreach to consumers led to a 28 percent rise in full price online businesses in fiscal 2020. And while the company faced disruptions in 2020, Oxford’s strategy is positioned to fuel a retail recovery, Chubb added.

Oxford opened four additional Tommy Bahama Marlin Bars last year and will continue to invest in this part of the business, Chubb said.

Capital expenditures in fiscal 2021 are expected at $35 million, $6 million more than the prior fiscal year and much of which will support IT investments and new Marlin Bars.

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Net Sales: Net sales for the quarter ended Jan. 30 fell 26 percent to $221.4 million from $297.6 million.

Oxford said full price retail sales were 43 percent lower in the fourth quarter and down 56 percent for the full year. Restaurants sales were 29 percent lower in the fourth quarter and were down 42 percent for the full year. Wholesale sales fell 48 percent in the fourth quarter and for the full year.

Gross margin was 54.3 percent in the quarter, versus 55.9 percent in the same year-ago period. Gross margin was negatively impacted by a more promotional environment due to Covid-19 and inventory markdown charges, Oxford said.

Inventory in the quarter fell 19 percent to $124 million at the end of the fourth quarter, versus $152 million in the same, prior-year period.

For the full year, net sales fell 33 percent to $748.8 million from $1.12 billion.

Earnings: The net loss for the quarter was $12.2 million, or 74 cents a diluted share, against net income of $15.3 million, or 90 cents, in the year-ago quarter. On an adjusted basis, the loss was 13 cents per diluted share.

Adjusted results for the quarter exclude a $15 million asset write-off related to an IT project, as well as $3 million of charges related to the exit of Lanier Apparel.

The company said for its full 2021 fiscal year ending Jan. 29, 2022, it expects net sales to grow to between $940 million and $980 million. GAAP earnings are forecasted at between $2.65 and $3.05 a share. On an adjusted basis, earnings per diluted share were guided to the range of $2.80 to $3.20.

For the first quarter ending May 1, 2021, Oxford is forecasting adjusted diluted earnings per share at between 90 cents and $1.10, on a net sales expectation of $220 million to $240 million. The loss in the comparable 2020 first quarter was $4.02 share, and $1.12 on an adjusted basis.

For the year, the net loss was $95.7 million, or $5.77 a diluted share, against net income of $68.5 million, or $4.05 a share. The loss was $181 on an adjusted basis. For the full year, adjusted results include the exclusions in the fourth quarter, as well as a $60 million Southern Tide impairment charge.

CEO’s Take: “Each of our brands,Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head, simply put, make people happy. Our talented, highly engaged teams will continue to evolve and update our products and brand messaging to ensure they stay relevant for today’s consumer and remain true to each brand’s unique DNA,” Chubb said. “This has been and will continue to be the key to our success as we deliver long-term value to our shareholders.”