Oxford Industries Inc. (NYSE:OXM) Q2 2015 Earnings Conference Call - Final Transcript
Sep 02, 2015 • 04:30 pm ET
Good day and welcome to the Oxford Industries, Incorporated Second Quarter Fiscal 2015 Earnings Conference Call. Today's conference is being recorded.
At this time, I'd like to turn the conference over to Ms. Anne Shoemaker. Please go ahead, ma'am.
Thank you, Shannon, and good afternoon everyone. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. (Forward-Looking Cautionary Statements)
And now, I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO; Scott Grassmyer, CFO; Terry Pillow, CEO of Tommy Bahama; and Doug Wood, President of Tommy Bahama.
Thank you for your attention. And now I'd like to turn the call over to Tom Chubb.
Good afternoon and thank you for joining us. We are pleased to report very strong second quarter results. We increased topline by 10% and grew adjusted earnings by 23%. We improved our gross margin, gained modest expense leverage, expanded our operating margin and reduced inventory levels. In light of these results in our expectations for the back half of the fiscal year, we have increased our outlook for the full year.
Our two terrific lifestyle brands, Tommy Bahama and Lilly Pulitzer continue to drive growth at Oxford. Simply put Lilly Pulitzer is having an amazing year. The positive momentum we saw in the first quarter accelerated in the second quarter. Sales in all channels of distribution exceeded our plan and significantly exceeded the prior year.
Comp store sales increased a remarkable 41% with a 124 basis point increase in gross margin. Lilly delivered an operating margin of 30.2%. These outstanding results clearly show what can be achieved with an emotionally connected brand like Lilly Pulitzer that has A plus product, A plus distribution and A plus communication and is supported with superb execution by very talented team of people.
E-commerce continues to be the fastest-growing channel distribution at Lilly Pulitzer. And our new stores are generating a great deal of excitement as well. There are now 33 company-owned Lilly Pulitzer stores compared to 26 last year.
We opened three new locations in the second quarter, The Mall at Millennia in Orlando, Merrick Park in Coral Gables and Oakbrook Center, our first Lilly store in Chicago. All three came out of the gates strongly and we plan to continue to open stores in locations that will delight the Lilly customer in both existing and new markets.
Lilly Pulitzer is an amazing brand that clearly has the potential for significant sustained profitable growth going forward and a team that is fully capable of and intent on realizing that potential. We also continue to see growth in our largest business, Tommy Bahama. In the first half of this year, our men's business, which is the anchor of this brand performed well with strong comps.
The solid performance we saw in our men's business was partially offset by a softer women's business