Oxford Industries Inc. (NYSE:OXM) Q2 2018 Earnings Conference Call - Final Transcript

Sep 12, 2018 • 04:30 pm ET


Oxford Industries Inc. (NYSE:OXM) Q2 2018 Earnings Conference Call - Final Transcript


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Good day, everyone. Welcome to today's Oxford Industries Incorporated, Second Quarter 2018 Earnings Conference. Today's conference is being recorded. At this time, for opening remarks and introductions, I'd like to turn the floor over to Ms. Anne Shoemaker. Please go ahead, ma'am.

Anne Shoemaker

Thank you, Stephanie, 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 IR 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.

Our disclosures about comparable store sales include sales from our full-price stores and e-commerce sites and excludes sales associated with outlet stores and e-commerce flash clearance sales. Because fiscal 2017 had 53 weeks, each fiscal week in fiscal 2018 starts and ends one calendar week later than in fiscal 2017. To provide a more accurate assessment of our fiscal 2018 comparable store productivity, we are presenting fiscal 2018 comparable store sales on a calendar-adjusted basis by comparing the fiscal 2018 period to the comparable calendar period in the preceding year. Thus, comparable store sales for the second quarter of fiscal 2018 compare sales in the 13-week period ended August 4, 2018 to the 13-week period ended August 5, 2017.

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 now I would like to turn the call over to Tom Chubb.

Thomas Chubb

Good afternoon, and thank you for joining us. We are quite pleased with our second quarter results, which reflects sales increases in the all operating groups, highlighted by a solid 7% comp store sales increase. At our two largest brands, Tommy Bahama and Lilly Pulitzer, we saw low single digit comps in our retail stores and double digit comps in our e-commerce business. At the same time, our overall gross margin expanded as our sales mix continues to shift towards a greater proportion of DTC business. By brand, Tommy Bahama's adjusted gross margin expanded 176 basis points, and Lilly Pulitzer expanded 139 basis points.

Our recent performance underscores the strong positioning of our powerful brands coupled with the tailwinds from a strong economy and a healthy consumer. The combination of a high single digit consolidated comp gain and robust gross margin improvement is a great indication that our brands are truly resonating with our customers through innovative differentiated products, control distribution and compelling communication, creating this emotional connection between our brands and our customers is critical to driving sustainable growth and increase shareholder value over the long term.

To support our direct to consumer businesses, we continue to make significant investments to ensure we effectively reach and delight our consumers. Our multi-year IT infrastructure projects are proceeding well. These