Oxford Industries Inc. (NYSE:OXM) Q3 2017 Earnings Conference Call Transcript

Dec 05, 2017 • 04:30 pm ET

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Oxford Industries Inc. (NYSE:OXM) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Oxford Third Quarter 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the floor over to Ms. Anne Shoemaker for opening remarks and introduction.

Executive
Anne Shoemaker

Thank you, Shannon, and good afternoon, everyone.

(Forward-Looking Cautionary Statements)

During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of non-GAAP to GAAP financial measures in our press release issued earlier today, which is posted under the Investor Relations tab of our website at oxfordinc.com. Please note that all financial results and outlook information discussed on this call, unless otherwise noted, are from continuing operations, and all per-share amounts are on a diluted basis.

As a reminder, the results from the Ben Sherman business are reflected as discontinued operations for all periods presented. Also, on April 19, 2016, the company acquired Southern Tide. Please note that fiscal 2017, which ends February 3, 2018, is a 53-week year with the extra week included in the fourth quarter.

And now, I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO; and Scott Grassmyer, CFO. Thank you for your attention. And I'd now like to turn the call over to Tom Chubb.

Executive
Tom Chubb

Good afternoon, and thank you for joining us. We are proud of our solid year-over-year growth for sales and EPS in the third quarter. More importantly, we believe we are well-positioned to take advantage of the emerging optimism in the consumer marketplace during this holiday season. The positive momentum that resulted in a 4% increase in comparable store sales in the third quarter gives us confidence that we will continue to drive growth in the fourth quarter. Our businesses have excellent plans centered on compelling product and innovative marketing campaigns that will set us apart in this highly competitive and promotional holiday season.

Before I dive into more detail on the third quarter results and our plans for holiday, I'd like to take a few minutes to talk a bit more broadly about what we have accomplished at Oxford this fiscal year. I'll walk you through the progress we have made on several key initiatives.

Perhaps our most important initiative in 2017 was our focus on improving Tommy Bahama's operating performance, and we are seeing real success. Great product supported by newly energized marketing campaigns have driven positive mid single-digit comps at Tommy Bahama in each of the first three quarters of 2017. Gross margin has expanded year-to-date as we focused on improving IMUs with cost reductions and selected price increases and have made improvements in how we clear goods. Our multi-pronged clearance strategy added very selective end of season markdowns in our own stores and improved the merchandising and product presentation in Tommy Bahama outlets.

We have also focused on leveraging existing infrastructure to help manage SG&A. All this has had a positive impact to the bottom line with adjusted operating margin expansion of 100 basis points year-to-date. Another priority for