Oxford Industries Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
June 11, 2025

Key Takeaways

  • Consolidated net sales of $393 million were within guidance but comps declined 5% with e-commerce down 5% and brick-and-mortar comps down 5%, prompting full-year sales guidance of $1.475 billion–$1.515 billion (3% decline to flat) driven by low-single-digit negative comps.
  • Rapidly evolving tariff policy added $40 million in input costs for FY25, creating planning challenges and a planned supply-chain shift away from China to mitigate tariffs, aiming to be substantially out of China by H2 2026.
  • Adjusted gross margin contracted by 110 bps to 64.3% and adjusted operating margin fell to 9.8%, leading to lowered FY25 EPS guidance of $2.80–$3.20 versus $6.68 last year amid a projected 200 bps gross margin contraction.
  • Lilly Pulitzer delivered double-digit sales growth with positive comps and improved profitability through over 50% newness and targeted engagement of top customers, while Tommy Bahama expanded with two new Marlin Bars in non-traditional mall sites.
  • Oxford plans approximately $120 million in FY25 capital expenditures, including a new Georgia distribution center and about 15 net new store openings, with cash flow expected to fund investments but debt levels remaining elevated through year-end.
AI Generated. May Contain Errors.
Earnings Conference Call
Oxford Industries Q1 2026
00:00 / 00:00

Transcript Sections

Skip to Participants
Operator

Greetings and welcome to the Oxford Industries Inc. First Quarter Fiscal twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

Operator

It is now my pleasure to introduce your host, Brian Smith. Please go ahead.

Brian Smith
Brian Smith
Head of Corporate Controls and Financial Reporting at Oxford Industries

Thank you, and good afternoon. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q and A session may constitute forward looking statements within the meaning of the federal law. Forward looking statements are not guarantees and actual results may differ materially from those expressed or implied in the forward looking statements. Important factors that could cause actual results operations or financial condition to differ are discussed in our press release issued earlier today and documents filed by us with the SEC, including the risk factors contained in our Form 10 ks. We undertake no duty to update any forward looking statements.

Brian Smith
Brian Smith
Head of Corporate Controls and Financial Reporting at Oxford Industries

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. And I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO and Scott Grassmeyer, CFO and COO. Thank you for your attention.

Brian Smith
Brian Smith
Head of Corporate Controls and Financial Reporting at Oxford Industries

And now I'd like to turn the call over to Tom Chubb.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Good afternoon, and thank you for joining us. We are pleased to be reporting results for the first quarter of fiscal twenty twenty five that were solidly within our forecast range in the midst of very challenging and unpredictable market conditions. The so called hard data indicates that the consumer still has the ability to spend money. However, the soft data, particularly consumer sentiment surveys as well as reports on discretionary spending, indicate a consumer that is much more cautious when it comes to spending on discretionary items, which includes fundamentally everything we sell. Our own experience during the quarter was similar to what we've seen over the last several quarters and that is that the consumer responds most strongly to new innovative and differentiated product and to promotions where the perceived value is high.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Complicating this situation is the rapidly evolving U. S. International trade policy, particularly with regard to tariffs. Tariff policy is challenging us in several ways. consumer concern about the impact of tariffs on prices and the economy is exacerbating weak consumer sentiment.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

the rapid evolution of the tariff policy is making it exceptionally difficult to plan and forecast the business. And finally, the tariff policy is requiring us to significantly realign our supply chain, which could prove to be the catalyst for implementing some changes in our sourcing strategies that ultimately benefit our company and shareholders, but certainly present short term challenges and financial ramifications. During challenging market conditions like those that we are currently encountering, it is imperative that we not lose sight of the fact that our reason for being is to evoke happiness in our customers. All seven of the brands in our portfolio are what we call happy brands, and our customers look to them for the spirit of optimism and possibility that they exude. We deliver this happiness through our brand positioning, our products, our marketing messages and imagery, and the experiences we provide in our stores, restaurants and bars and our resort hotel, as well as on our e commerce websites.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Staying focused on bringing happiness to our customers helps mitigate the impact of challenging marketing conditions and ensures that as those conditions abate, we will emerge even stronger than when we went into the challenging time. The pandemic provided great reinforcement of that idea. It would have been very easy to flip into a darker, more pessimistic mode with our brand messaging during the lockdowns, but we refused to do that and we emerged on the other side even stronger than ever. Likewise, we are staying focused on happiness now. During the first quarter of fiscal twenty twenty five, the continued focus on happiness paid off with fantastic results in our Lilly Pulitzer brand given the environment.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

As the result of Lilly's focus on delighting our most dedicated and highest spending consumers, we were able to post double digit growth with positive comps in both ecom and retail, as well as meaningful growth in our average order size and improved profitability. Some of the highlights of the quarter in Lilly included our beautiful prints, which had an excellent balance this season between tonal and multicolor as well as between bright colors and soft colors. We also had big success with sportswear items like the Ronson top, a simple tee made special with gold buttons and puffy sleeves. The reintroduction of Lilly men's after more than a decade as well as our collaboration with the Normandy based French brand St. James were by design, not huge volume drivers, but sold through at very high rates and created lots of buzz and excitement.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Our newness quotient was excellent at more than 50% this spring as compared to approximately 40% last year. On the marketing front, we continued to ride the wave of excitement created by our Palm Beach Fashion Show last fall, which featured spring twenty twenty five product. In our Tommy Bahama business, we continued our efforts to deliver happiness to a growing audience with the opening of two new Marlin bars. The two new locations at the King Of Prussia Mall on the Mainline in Pennsylvania and at South Park Mall in Charlotte, North Carolina are both in more temperate climates than our typical warm weather locations and both are located at large regional malls, which is also different than where we have typically located Marlin Bars. Prior to building Marlin Bars in these locations, we had Tommy Bahama stores in both Charlotte and King Of Prussia.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

As we have seen with past Marlin Bar conversions, we expect to see a meaningful uplift in our retail business in those locations as well as the opportunity to provide an immersive Tommy Bahama brand experience on the bar and restaurant side. Nothing creates passion for the Tommy Bahama brand like a nice dinner and a beverage or two with family and friends at one of our Marlin bars. South Park Mall and Kinga Prussia Mall are two of the best in the country, and we are excited to see what we can deliver there. While we are remaining focused on our long term evergreen objective of delighting the consumer with our happy brands, we are also working hard to respond to more immediate challenges. At the top of the list is the rapidly evolving change in U.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

S. Trade policy, particularly tariffs. Beginning more than fifty years ago, when as an enterprise, we branched into international product sourcing, our objective has always been to have a resilient supply chain that can respond to the changing needs of both the marketplace as well as to significant changes in U. S. Trade policy.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

And through the years, there have been many significant changes to trade policy, including NAFTA, various other free trade agreements, China's accession to the WTO in 02/2005, and others. And each time, our supply chain has quickly and successfully adapted to the new policy. The only difference this time is that the policy change has come with less notice and more fluidity than with past changes. Nevertheless, our ability to adapt is unchanged and we are doing exactly that. We are making excellent progress on our goal of diversifying our supply chain, particularly away from China and currently expect to exceed the milestones that we laid out in April.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

By the second half of twenty twenty six, we currently plan to be substantially out of China. Tariffs are one of many input costs that we take into account as we work through the complicated process of establishing prices and initial gross margins for a particular season. As we go through this process for future seasons, we are, of course, taking into account what we currently know about tariffs. There is still much work to be done, but we are pleased with the progress. As an example, in our largest business, Tommy Bahama, for spring twenty twenty six, taking into account the currently effective elevated tariff rates, we are projecting that our AUR will increase by less than 3%, fully recovering gross margin dollars, while our initial gross margin percent would decrease by less than 50 basis points.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

In subsequent seasons, we expect to be able to work initial gross margin percentages back up without any dramatic changes in pricing. While the tariffs are and will certainly create some turbulence in our results this year, we do not see them as a long term threat to our competitiveness or our ability to deliver long term value to our shareholders. Another more immediate challenge we are hard at work on is improving the profitability of our Johnny Was business. Johnny Was is an incredible brand with absolutely beautiful product, loyal and engaged customers and an incredibly dedicated, hardworking and professional team. We believe Johnny Was also has an opportunity to improve its profitability to a level similar to what we are accustomed to in Lilly Pulitzer in Tommy Bahama.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

After a period of very rapid growth, including rapid expansion of its retail store footprint over the last six or seven years, some of which was before we bought the brand, we are shifting our focus to increasing profitability and reinforcing the fundamentals. This includes brand creative, merchandising assortment and planning, marketing efficiency and retail execution. We have been working diligently on this project over the last several months and have brought in additional talent and external resources to help. We look forward to reporting to you on the plan and the progress in the coming quarters. Progress on our new state of the art fulfillment center in South Georgia is on track, and we expect to be complete at the end of the fiscal year.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Once complete, we believe the new SC will be a competitive advantage for our most commercially important region, the Southeastern United States, especially Florida. Without a doubt, we are operating in very difficult circumstances but are responding to the current challenges well, while never losing sight of the long term goals and objectives. We are grateful to all of our team members for all that they do on behalf of our customers and our shareholders. I'll now turn the call over to Scott for more details on our first quarter results as well as our expectations for the balance of the year. Scott?

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Thank you, Tom. As Tom mentioned, our teams faced unprecedented uncertainty and challenges related to the rapidly developing tariff and trade environment during the first quarter. Despite these substantial challenges, our team focused on what they could control and delivered top and bottom line results within our previously issued guidance ranges. In the first quarter of fiscal twenty twenty five, consolidated net sales were $393,000,000 compared to sales of $398,000,000 in the first quarter of twenty twenty four and towards the high end of our guidance range of $375,000,000 to $395,000,000 Sales in our brick and mortar locations were down 1%, driven by a negative comp of 5%, partially offset by the addition of new store locations. E commerce sales decreased 5%.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Sales in our food and beverage locations were down 3%, while sales in our outlet locations were comparable year over year. Sales in our wholesale channel increased 4% compared to the first quarter of twenty twenty four, with increased sales to major department stores and off price retailers. By segment, lower sales at Time Bahama and Johnny was were partially offset by a low double digit sales increase at Lilly Pulitzer that saw success with its strategy to focus on product that resonates strongly with its core customer and an increase in emerging brands driven by promising rollout of new retail locations. Adjusted gross margin contracted 110 basis points to 64.3%, driven primarily by increased freight expenses to e commerce customers at Tommy Bahama, increased markdowns during clearance events at Lilly Pulitzer and Johnny Was and a change in sales mix with wholesale sales, including off price wholesale sales, representing a higher proportion of net sales. We also incurred $1,000,000 of additional charges or an approximate 20 basis point negative impact to consolidate gross margin or $04 per share in cost of goods sold resulting from The U.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

S. Tariffs on imported goods implemented in the first quarter of fiscal twenty twenty five. Adjusted SG and A expenses increased 5% to $221,000,000 compared to $210,000,000 last year, with approximately $6,000,000 or 59 percent of the increase due to increases in employment cost, occupancy cost and depreciation expense due to the opening of 31 new brick and mortar retail locations, including four new Tommy Bahama Marlin bars since the first quarter of fiscal twenty twenty four. This includes the eight net new stores, including two Tommy Bahama Marlin bars opened in the first quarter of fiscal twenty twenty five. We also incurred preopening expenses related to some of the approximate seven net new stores planned to open during the remainder of fiscal twenty twenty five, including an additional Tommy Bahama Marlin Bar.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

The result of this yielded a $39,000,000 adjusted operating profit or a 9.8% operating margin compared to $57,000,000 operating profit or a 14.4% margin in the prior year. The decrease in adjusted operating income reflects the impact of our investments in a challenging consumer and macro environment. Moving beyond operating income, our adjusted effective tax rate of 24.2% was impacted by certain discrete items, most notably from the receipt of interest related to our U. S. Federal income tax receivable.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Interest expense was $1,000,000 higher compared to the first quarter of fiscal twenty twenty four, resulting from higher average debt levels. With all this, we ended with $1.82 of adjusted net earnings per share. I'll now move on to our balance sheet, beginning with inventory. During the first quarter of fiscal twenty twenty five, inventory increased $18,000,000 or 12% on a LIFO basis and $20,000,000 or 9% on a FIFO basis, with inventory increasing in all of our operating groups except Johnny Was, primarily due to the impacts associated with U. S.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Tariffs that were implemented in the first quarter of fiscal twenty twenty five, including accelerated purchases of inventory before the anticipated implementation of the increased tariffs and increased costs capitalized into inventory after the implementation of the tariffs. At the end of the first quarter of twenty twenty five, our inventory balances included an additional $3,000,000 of cost associated with the increased tariffs implemented in the first quarter of fiscal twenty twenty five. We ended the quarter with long term debt of $118,000,000 We used $4,000,000 in cash flows from operation in the first quarter of fiscal twenty twenty five, driven primarily by lower net earnings, changes in working capital needs, including accelerating inventory purchases and $12,000,000 of expenditures related to implementation costs associated with cloud computing arrangements that are classified as operating cash outflows. We also had $51,000,000 of share repurchases, capital expenditures of $23,000,000 primarily related to the Lions Georgia distribution center project and the addition of new brick and mortar locations and $10,000,000 of dividends that led to an increase in our long term debt balance. I'll now spend some time on our updated outlook for 2025.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

We finished the first quarter of fiscal twenty twenty five with a negative comp of 5%, which was slightly lower than our previous forecast of negative 2% to 4% comps. Comp sales figures in the second quarter to date are negative similar to the first quarter, which is a trend we expect to continue for the remainder of the quarter. While we believe the negative comp trend will moderate slightly as we enter the second half of fiscal twenty twenty five and lap easier comparisons due in part to the negative effects of two hurricanes that impacted the Southeastern United States in the third quarter of fiscal twenty twenty four. Our forecast includes negative comps in the low single digit range for the remainder of the year. For the full year, we now expect net sales to be between $1,475,000,000 and $1,515,000,000 reflecting a decline of 3% to just slightly negative compared to sales of $1,520,000,000 in fiscal twenty twenty four.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Our updated sales plan for the full year of 2025 now includes a total company comp sales decline in the low to mid single digit range. Decreases in our Tommy Baham and Johnny West segment was driven by negative comps, partially offset by new store locations. That decline is expected to be tempered by growth in our Lilly Pulitzer and Emerging Brands segments driven by positive comps in new store locations. By distribution channel, the sales plan consists of a low single digit decrease in e commerce and wholesale sales, partially offset by a flat to low single digit increase in both full price retail and outlet sales. We expect the full price retail and outlet channels will benefit from the addition of approximately 15 net new locations during the year, partially offset by negative comp sales.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

We also expect low to mid single digit increase in our food and beverage channel that will benefit from the addition of three new Marlin Bar locations during the year. Our updated guidance also reflects the most recent tariff developments. When we last issued guidance in March, additional tariffs placed on Chinese imports were 20% and reciprocal tariffs on countries other than China had not yet been announced. Tariffs placed on imports from countries around the world have also fluctuated significantly since March, including pauses and delays in tariffs and additional tariffs placed on Chinese imports that reached as high as 145%. Our current forecast includes the assumption that the currently implemented additional 30% tariff placed on Chinese imports and 10% on all other countries will remain in place for the remainder of fiscal twenty twenty five.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Based on these updated assumptions, we now expect that gross margin will contract approximately 200 basis points for the year. This contraction includes $40,000,000 in additional tariff cost or $2 per share after tax, which is an increase from the 9,000,000 to $10,000,000 included in our March forecast. We're working hard at mitigating the gross margin dollar impact of tariffs and expect to be fully mitigated by spring of twenty twenty six. Planned mitigation efforts to move sourcing from China to countries with lower tariffs rates, including our effort to reduce sourcing from China from approximately 40% in 2024 to approximately 30% for 2025. And our expectation of increased activity during promotional events across our brands as a challenging macroeconomic environment will lead to consumers looking for deals and promotions.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

In addition to lower sales and gross margin, we expect SG and A to grow in the mid single digit rate range at a rate higher than sales in 2025, primarily due to continued investments in our business, including the annualization of incremental SG and A from the 30 net new locations added during fiscal twenty twenty four. Incremental SG and A related to the addition of approximately 15 net new locations, including three new Tommy Bahama Marlin Bars, including the two that opened in the first quarter and a planned to open on the Big Island Of Hawaii late this year. And an increase in adjusted depreciation and amortization from $57,000,000 in fiscal twenty twenty four to $59,000,000 in fiscal twenty twenty five, which excludes $11,000,000 in amortization of acquired intangibles in fiscal twenty twenty four and $8,000,000 in fiscal twenty twenty five. Also within operating income, we expect lower royalties and other income of approximately $1,000,000 in fiscal twenty twenty five. Additionally, our fiscal twenty twenty five guidance includes the unfavorable impact of non operating items, including $5,000,000 of higher interest expense compared to $2,000,000 in 2024 or an approximate $0.20 to $0.25 EPS impact.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

The increased debt levels in fiscal twenty twenty five are due to our continued capital expenditures on the Lions Georgia distribution center, technology investments and return of capital to shareholders exceeding cash flow from operations. We also expect a higher adjusted effective tax rate, approximately 26% compared to 20.9% in 2024, which benefited from certain favorable items primarily related to interest income and tax receivables that are not expected to reoccur in 2025. The higher tax rate will result in an approximate $0.20 to $0.25 per share impact. Considering all these items, including the $2 impact from tariffs, higher interest expense and a higher tax rate, we expect 2025 adjusted EPS to be between $2.8 and $3.2 versus adjusted EPS of $6.68 last year. In the second quarter of twenty twenty five, we expect sales of $395,000,000 to $415,000,000 compared to sales of $420,000,000 in the second quarter of twenty twenty four.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

This reflects our low to mid single digit negative comp assumption, partially offset by the addition of non comp stores and relatively flat wholesale sales. We also expect gross margin to contract by approximately two fifty basis points, which includes our updated tariff assumption of $15,000,000 in additional tariff costs or $0.75 per share after tax. SG and A to grow in the mid single digit range, primarily related to the new store locations. Increased interest expense of $2,000,000 flat royalty and other income and a higher effective tax rate of approximately 31% from net discrete tax expense for stock based compensation. We expect this to result in second quarter adjusted EPS of between $1.05 and $1.25 compared to $2.77 in the second quarter of twenty twenty four.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

I would now like to discuss our CapEx outlook for the remainder of the year. Maturely consistent with our prior guidance, we expect capital expenditures to be approximately 120,000,000 including the $23,000,000 incurred during the first quarter compared to $134,000,000 in fiscal twenty twenty four, with approximately $70,000,000 related to finishing the project to build the new distribution center in Lyons, Georgia. Remaining capital expenditures relate to the execution of on our pipeline of new stores in Tommy Bahama Marlin Bars, including increases in store count across Tommy Bahama, Lily Pulitzer, Southern Tide and the Buford Bonnet Company. We expect this elevated capital expenditure level to moderate in 2026 and beyond after the completion of the Lions Georgia project. We expect cash flows from operations to be strong as we head into our busiest time of the year, allowing us to fund the previously mentioned investments, our quarterly dividend and reduce our outstanding borrowings, although we do expect to be in a debt position for the remainder of the year due to our first quarter share repurchase, dividend payments and anticipated capital expenditures.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Thank you for your time today. We will now turn the call over for questions. Joe?

Operator

Thank you, sir. Sir. And our question comes from the line of Ashley Owens with KeyBanc Capital Markets. Please proceed.

Ashley Owens
Ashley Owens
Vice President & Senior Equity Research Analyst at KeyBanc Capital Markets

Hi, good afternoon. Thanks for taking our questions. So nice to see the strong response in Lilly in the quarter. I know you elaborated on some of the strengths you saw there. What learnings have emerged from the strength?

Ashley Owens
Ashley Owens
Vice President & Senior Equity Research Analyst at KeyBanc Capital Markets

Is the key there to continue to drive a broad range of colorways in the newness that you're offering? And just any levers you could talk to that are in place to sustain that momentum through the balance of the year? Thank you.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

I think the key, Ashley, really, and thank you for the question is focusing on those most committed customers, which is sort of the top 20% of the customer base, they account for more than 60% of the sales and even more of that when you look at profitability. And really focusing in on what they love about Lilly and delivering it to them in a way that's both consistent with the DNA of the brand, which we're, in my opinion, very much doing right now, while at the same time being relevant to the current customer and marketplace. And I just think the Lilly team has done an extraordinary job of it. Ashley, you know this because you pay a lot of attention and that really started at the beginning of last year as we celebrated the sixty fifth anniversary and we did some special capsules and a lot of marketing things and it kind of built up through the year and it's really paying off for us now. So I would say going forward that really is the key is focusing on that core customer, true to our DNA, but at the same time staying relevant to what's going on today.

Ashley Owens
Ashley Owens
Vice President & Senior Equity Research Analyst at KeyBanc Capital Markets

Okay, great. And then just a follow-up. I know you discussed some of the puts and takes around margin and pricing increases at Tommy Bahama kind of going into spring twenty twenty six. Could you elaborate on some of your pricing plans for the other brands that you have identified, if any, just curious as you navigate some of these margin headwinds with promotional spending and then additionally now with the tariffs, how you're balancing the potential need to stay promotional with some potential price increases to offset some of these higher costs?

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Yes. Well, a great question. And I think we threw the Tommy Bahama example out there where our plan for spring twenty twenty six has our AUR going up by less than 3%. And then at that level, we get back all the gross profit dollars. The initial margin will go down by less than 50 basis points.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Now the other part of your question is, are we going to experience margin dilution because of promotional activity? And for 2026, it's just way too early for us to really predict that, I think. As Scott pointed out, for the balance of this year, we have baked in some additional promotion, not really more promotions, just the expectation that more business will be done during those promotional times. But for '26, all we're really all we as far as we've gotten really is the initial margins. Scott, I don't want

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

And for 2025, spring summer are our biggest seasons and there's really there's not much adjustment we could do there. And so we are starting to see some modest price increases for fall and then spring is where we really fully mitigate.

Ashley Owens
Ashley Owens
Vice President & Senior Equity Research Analyst at KeyBanc Capital Markets

Okay. That's super helpful color. Thank you. And I'll pass it along. But best of luck.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Thank you, Ashley.

Operator

The next question comes from the line of Joseph Civello with Truist Securities. Please proceed.

Joseph Civello
Joseph Civello
Equity Research Analyst at Truist Securities

Hey, guys. Thanks so much for taking my question. I wanted to check-in and see about the wholesale. I think you said 4% growth. Just talk about how that compared to your expectations and conversations with retailers as we get to the back half of the year?

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Well, I'll let Scott comment a little bit further on our expectations, but we were pleased to see that growth in the wholesale. And I would say that our performance at wholesale has been quite good, which we always like to see that. So I think we've talked about that in the past. But on the floor of one of our big department store customers, we're going head to head with some other great brands in a tough environment like we've got right now to see that we're actually performing quite well in that head to head competition is pretty reassuring to see that. It shows the strength of our brands and our products.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

And then in terms of how you would evaluate that relative to our expectations?

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Yes. I think wholesale is pretty much tracking to our expectations. We knew we had a little bit up spring order book, we're expecting the half of year to be down a little bit as a lot of accounts have gotten more conservative. So now for the full year, down, but slightly up in Q1. And the specialty stores have certainly been weaker than the department stores. So that specialty store channel is still pretty challenged.

Joseph Civello
Joseph Civello
Equity Research Analyst at Truist Securities

Got it. Thanks so much.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Thank you, Joe.

Operator

The next question comes from the line of Janine Stichter with BTIG. Please proceed.

Ethan Saghi
Equity Research Associate at BTIG

Hey, you've got Ethan on for Janine. Thanks for taking my questions. So to start, great to hear that the newness is really resonating at Lilly. I was just wondering if you could give some color on the newness in the assortment at Tommy and how that's resonating. And then my question, digging in on Johnny was kind of what drove that mid teens decline in Q1 and just what gives you confidence in the guide for the brand for the rest of the year? Thanks.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Okay. So with regard to Lilly, the newness, as I've commented on and certainly been a big part of the success and our sort of newness quotient was higher this year. We were a little over 50% this year versus I think about 40 last year. So we were pleased to see that. A lot of it was in sportswear items like the top that I highlighted.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

And that's great to see. We've traditionally been very, very strong in dresses, but good to see the strength in sportswear as well. And then as I mentioned, we think a lot of it we thought our print assortment this spring was really quite strong and very well balanced and gave a lot of customers great options in terms of whether they wanted go multicolor, more tone on tone or bright or soft. They just had good options. And then in Tommy, I would say newness is working also.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

I mean, we're seeing that everywhere. It's sort of, as I said, it's things that are new and exciting and different. Or other than that, they're sort of looking for what they perceive as being high value situations. And as Scott talked about, that means we end up doing a little bit more business proportionately during our promotional periods. And then in terms of the JohnnyWas guide going forward, I think we're not projecting a big rebound there from what their current performance is.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

While we would love to see that, we're doing a lot of things to try to make that happen. As I talked about the plan that we're working on it, Johnny, was for the most part that would probably impact '26 and beyond more than it would '25. So what we've got in the guidance model does not really assume a big rebound in Johnny Woods in the next quarter or two. Scott, I don't know if you'd

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Yeah, no, that's accurate.

Ethan Saghi
Equity Research Associate at BTIG

Great, thanks. I'll pass it on.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Thank you, Ethan.

Operator

The next question comes from the line of Mauricio Serna with UBS. Please proceed.

Mauricio Serna
Mauricio Serna
Executive Director at UBS Group

Great. Good afternoon. Thanks for taking my question. Just wanted to dig in into the tariff impact that you provided in your outlook. It seems, you know, it's higher than what you talked about before.

Mauricio Serna
Mauricio Serna
Executive Director at UBS Group

But even I guess as I look at the current tariffs, it still seems high. Maybe could you talk about what is the gross impact that you're considering? Like, I suppose the $40,000,000 is like the net impact. And if you have been facing any like how are you thinking about the mitigation strategies beginning to materialize in your operations over the next couple of quarters? Thank

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

Marisa, the $40,000,000 is the gross. Before, we were at 9% to 10% gross. So the increase and before just as a reminder, the only enacted tariff at the time was the China 20%. There were no additional tariffs on the other countries at the time of So now we've gone from 10% everywhere and China going from 20% to 30 is the change. So that's what calls the 9% to 10% to go up to 40%.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

We are working on mitigation actions. But again, as I mentioned earlier, springsummer are our biggest seasons. There's really nothing we could do about that. Some of the later fall deliveries, there is some select increases. And then when we get into spring, again, we should we expect to be fully mitigated.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

So it will hit us hard in 2025. But as a reminder, we left last year 40% China. This year, we will average 30%, but we'll leave the year lower. And then next year, we expect to be below 10% China. So our China percentage is continuing to come down, but we obviously couldn't affect springsummer and really couldn't affect early fall or really fall much shifts.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

But for, resorting spring of next year, we, have some major moves coming.

Mauricio Serna
Mauricio Serna
Executive Director at UBS Group

Understood. Thank you.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Thank you, Mauricio.

Operator

And the next question comes from the line of Paul Lejuez with Citi. Please proceed.

Tracy Kogan
Tracy Kogan
Analyst at Citigroup

Thank you. It's Tracy Kogan filling in for Paul. I had a couple of questions. I was wondering, I know you said comps were down about 5% for the quarter as a whole. I was wondering how that trended in February versus March and April combined.

Tracy Kogan
Tracy Kogan
Analyst at Citigroup

And then I was curious what you're seeing in the restaurant business in terms of traffic and ticket. I saw that business was down, but just wondering what the drivers were there. Thanks.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

So the in response to the part of your question, Tracy, April was definitely the strongest month for us and that was true, I believe, in both retail and e com. Part of that undoubtedly was the Easter shift, so we would have expected and did expect to have a pretty good performance in April and that turned out to be accurate. And then in terms of restaurant, the overall was down 3%, but the comp was actually only down 1%. So pretty close to flat last year. I don't know if we've got the traffic numbers for restaurants or I think in general, Tracy, the ticket sizes have been ticking up a little bit.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

And that's due to some of the item prices going up.

Scott Grassmyer
EVP, CFO & COO at Oxford Industries

And Tracy, this year, you remember our Sarasota restaurant is still not open. We're moving locations. So that's where we had it last year during busy season. We did not have it this year, but it should open, I believe, late this summer.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

And that's why the comp Yes, exactly. The comp was really we were close to flat, which was certainly better than what we saw in our retail stores.

Tracy Kogan
Tracy Kogan
Analyst at Citigroup

Got it. Thank you. And just back to the question. What was do you look at Marpril March and April combined? I'm just wondering how that period compared to February. Like did your business pick up?

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Yes, it did. It definitely did. I mean, basically, the improvement was sequential through the quarter. And April was the best, March was better. February was the worst.

Tracy Kogan
Tracy Kogan
Analyst at Citigroup

Got it. Thanks very much, guys.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Yeah. Thank you.

Operator

Thank you. There are no further questions at this time. I'd like to turn the call back to Tom Chop for closing remarks.

Tom Chubb
Tom Chubb
Chairman, CEO & President at Oxford Industries

Okay. Thank you, Joe, and thanks to all of you for your interest. We look forward to talking to you again in September and hope all of you have a great summer.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Executives
    • Brian Smith
      Brian Smith
      Head of Corporate Controls and Financial Reporting
    • Tom Chubb
      Tom Chubb
      Chairman, CEO & President
Analysts
    • Scott Grassmyer
      EVP, CFO & COO at Oxford Industries
    • Ashley Owens
      Vice President & Senior Equity Research Analyst at KeyBanc Capital Markets
    • Joseph Civello
      Equity Research Analyst at Truist Securities
    • Ethan Saghi
      Equity Research Associate at BTIG
    • Mauricio Serna
      Executive Director at UBS Group
    • Tracy Kogan
      Analyst at Citigroup
Powered by Quartr