Southern Tide acquisition, Tommy Bahama sales drive Oxford Q1 performance
Consolidated net sales increased 6% to $272.4 million. Lilly Pulitzer net sales fell 2.1% to $63.3 million and Tommy Bahama net sales increased 6.0% to $172.5 million. Also Southern Tide, which was acquired by Oxford in April 2016, contributed $12.6 million in net sales compared to $1.4 million in sales in the first quarter of 2016.
In addition to the contribution from Southern Tide, the net sales increased due to sales associated with full-price retail stores, increased sales in the company’s restaurants and a 2% increase in comparable store sales, but they were offset by a decrease in wholesale sales.
"We are particularly encouraged by the progress made at Tommy Bahama in the first quarter,” said Chairman and CEO Thomas C. Chubb. Tommy Bahama negatively impacted the company’s full year and fourth quarter sales performances due to store closures and severance charges. The brand seems to have bounced in the first quarter.
Chubb added, “Driven by positive comp store sales, we were pleased to see Tommy Bahama's operating margin expand over a hundred basis points in the quarter. During the first quarter, Lilly delivered a modest expansion in gross margin and an impressive 28% operating margin even with a slight decline in sales compared to last year's first quarter. The first quarter of 2017 also included a very solid performance from Southern Tide. This spring, Southern Tide saw strength in their e-commerce and at-once wholesale businesses and delivered a 17% operating margin."
Oxford also met its first quarter GAAP earnings guidance range of $0.98 to $1.08 with $1.03 per share on a GAAP basis and adjusted earnings per share of $1.12.
Gross profit increased to $159.4 million from $151.5 million in the prior year, SG&A expenses as a percentage of net sales were 48.9% or $133.2 million compared to 48.2% or $123.5 million in the previous year, and operating income was $30.0 million versus $32.0 million in the prior year.
Oxford initiated its second quarter guidance and expects net sales to be in range of $285 million to $295 million and earnings per share on a GAAP basis to be in range of $1.33 to $1.43. The company also updated its full year guidance and now expects net sales to grow between $1.09 billion and $1.11 billion and its earnings on a GAAP basis to be between $3.33 and $3.53.
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