NEW YORK – Weakness in private label programs and tailored clothing helped lower Oxford Industries’ first-quarter net earnings by more than 20%.
Net income for the three months ended Sept. 1 declined to $11 million, or 62 cents a diluted share, from $13.9 million, or 79 cents, in the year-earlier period, a 21.1% drop. Excluding results from its discontinued women’s apparel operations, EPS declined to 63 cents from 67 cents.
Led by strong increases at its Tommy Bahama Group, revenues rose 5.8% to $284.1 million from the 2005 figure of $268.5 million. Sales at Tommy Bahama moved ahead 13.8% to $104.1 million, while those for the Menswear Group managed a 1% advance to $178.8 million.
Operating income rose 17.3% at Tommy Bahama, to $16.8 million, but fell 29.3%, to $10.6 million, at the Menswear Group. Overall operating income declined 5.4% to $23 million.
The company attributed the decline in income in the Menswear Group to a planned sales decline at Ben Sherman and “some gross margin deterioration in certain of the the Menswear Group’s private label businesses.” It also made reference to “some recent softness in tailored clothing.”
J. Hicks Lanier, chairman and chief executive officer of the Atlanta-based firm, said in a statement, “Once again, Tommy Bahama exceeded our expectations, generating accelerated sales growth and expanded profitability. In our Menswear Group, while our results were somewhat soft as expected, we have positioned the business for significant improvement in profitability for the balance of the fiscal year.”
In fact, the company said it expects year-over-year comparisons in operating income for its Menswear Group to be “favorable” for the three remaining quarters of its fiscal year.
Lanier said that the Ben Sherman business is “focused and generating strong sell-throughs at retail.”