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Oxford Industries (OXM) 3Q Misses View, 4Q EPS Guidance Downbeat; Shares Drop

 December 04, 2012 04:34 PM

(By Balaseshan) Oxford Industries Inc. (NYSE: OXM) reported a 85.3% jump in quarterly earnings on continued strong sales performance from Tommy Bahama and Lilly Pulitzer. Results missed consensus, and the apparel company guided fourth quarter below Street's view, sending its shares down 12.28% in aftermarket.

Earnings from continuing operations for the third quarter were $3.01 million or $0.18 per share, up from $1.61 million or $0.10 per share last year. Adjusted earnings per share (EPS) from continuing operations rose to $0.19 from $0.16.

Sales increased 7% to $181.41 million.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.21 per share on revenue of $182.78 million for the third quarter.

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Tommy Bahama sales grew 12%, while Lilly Pulitzer's sales jumped 62%. Lanier Clothes sales declined 17.8% due to a slow-down in the intake rate on replenishment programs by a key customer. Ben Sherman sales dropped 21.4% due to missteps in its merchandise mix, which resulted in too much of the product offering in styles at the high end of the price range.

"Despite the good performances of these businesses, our overall results for the third quarter were negatively impacted by Ben Sherman's disappointing performance, which has continued into the fourth quarter," said Hicks Lanier, Chief Executive of Oxford Industries.

Gross margins rose to 53.4% from 52.1%, primarily on the sales mix continuing to shift towards higher gross margin Tommy Bahama and Lilly Pulitzer businesses, the increased percentage of direct to consumer sales and the net favorable impact of LIFO accounting adjustments.

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Looking ahead into the fourth quarter, the company expects adjusted EPS of $0.64 to $0.74 and sales of $225 million to $235 million, while Street predicts EPS of $0.93 on revenue of $234.29 million.

For the fiscal 2012, the company lowered its adjusted EPS guidance to range of $2.60 to $2.70 from previous forecast of $2.85 to $2.95. OXM also cut sales outlook to range of $845 million to $855 million from previous estimate of $850 million to $865 million. Street analysts predict EPS of $2.92 on revenue of $854.79 million.

The company has moderated its earnings guidance predominantly as a result of the ongoing challenges at Ben Sherman as the factors that impacted the third quarter continue, and to a lesser extent due to store opening delays at Tommy Bahama and the impact of Hurricane Sandy.

The company also said its Board of Directors has approved a cash dividend of $0.15 per share, payable on February 1, 2013 to shareholders of record as of the close of business on January 18, 2013.

OXM closed Tuesday's regular session down 4.76% at $52.78. The stock has been trading between $36.68 and $59.36 for the past 52 weeks.



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