Oxford Industries lowers full-year guidance owing to Lilly Pulitzer softness

US apparel group Oxford Industries, Inc. (Oxford Industries) reported consolidated net sales of 394 million dollars for the second quarter of fiscal 2026 ended August 1, 2026, marking a decrease from 403 million dollars in the second quarter of fiscal 2025.

Earnings per share (EPS) on a GAAP basis reached 3.25 dollars compared to 1.12 dollars in the prior-year period. The current quarter included a 2.07 dollars per share impact from tariff-related refunds. On an adjusted basis, EPS stood at 1.34 dollars compared to 1.26 dollars in the second quarter of fiscal 2025.

“Our second quarter results were in-line with our expectations, highlighted by year-over-year adjusted earnings per share growth and a low-single-digit comparable sales gain at Tommy Bahama,” stated Oxford Industries chairman and chief executive officer, Tom Chubb. “This performance contributed to strong cash flow generation in the first half of the year, which along with tariff refunds received to-date, we used to significantly reduce debt.”

Tariff refunds expand gross margin

By channel, full-price direct-to-consumer (D2C) sales contracted 1 percent to 289 million dollars. Within this segment, full-price retail sales dropped 2 percent to 139 million dollars, while e-commerce sales remained comparable to the prior-year period at 150 million dollars. Outlet sales were flat at 20 million dollars. Wholesale sales experienced a 14% drop to 52 million dollars, primarily driven by lower off-price sales.

Gross margin expanded significantly to 73.8 percent compared to 61.4 percent in the second quarter of fiscal 2025. The expansion was primarily driven by 42 million dollars in tariff refund claims recognized as a reduction of cost of goods sold, alongside updated assortment, sourcing, and pricing strategies that yielded higher initial mark-ups. A lower proportion of off-price wholesale sales and a one million dollar reduction in LIFO accounting charges also contributed to the margin gain, despite higher promotional activity across Tommy Bahama, Lilly Pulitzer, and Emerging Brands.

Excluding tariff refunds and LIFO accounting impacts, adjusted gross margin reached 63.1 percent compared to 61.7 percent in the prior-year period.

GAAP operating income reached 69 million dollars, or 17.4 percent of net sales, compared to 25 million dollars, or 6.3 percent of net sales, in the second quarter of fiscal 2025. Adjusted operating income stood at 29 million dollars, or 7.4 percent of net sales, versus 28 million dollars, or 7 percent of net sales, in the prior-year period.

The board of directors declared a quarterly cash dividend of 0.70 dollars per share, payable on October 30, 2026, to shareholders of record as of October 16, 2026.

Softness at Lilly Pulitzer prompts guidance reduction

Chubb noted that positive momentum at Tommy Bahama was offset by softness elsewhere in the portfolio, particularly at Lilly Pulitzer due to addressable product and marketing challenges.

“The combination of these internal headwinds and ongoing macro-economic consumer pressure has led us to lower our guidance for fiscal 2026,” Chubb added. “We have initiated actions to position the business for profitable growth next year, including increasing our promotional activity at Lilly Pulitzer in the coming months to spur demand and prevent the build up of slow moving inventory.”

The company now projects net sales between 1.43 billion dollars and 1.47 billion dollars, down from 1.48 billion dollars in fiscal 2025. Full-year GAAP EPS is expected to range between 3.07 dollars and 3.47 dollars, incorporating the 2.07 dollars per share benefit from tariff refund receivables and related interest, compared to a GAAP net loss per share of 1.86 dollars in fiscal 2025. Adjusted EPS is now forecasted between 1.60 dollars and 2.00 dollars, compared to 2.11 dollars in fiscal 2025.

For the third quarter of fiscal 2026, net sales are expected to range from 280 million dollars to 300 million dollars, down from 307 million dollars in the third quarter of fiscal 2025. GAAP loss per share is anticipated to fall between 1.47 dollars and 1.27 dollars, compared to a net loss per share of 4.28 dollars in the prior-year period. Adjusted loss per share is expected to be between 1.40 dollars and 1.20 dollars, compared to an adjusted net loss per share of 0.92 dollars in the third quarter of fiscal 2025.