Oxford Industries (OXM -0.83%) reported second quarter fiscal 2025 earnings on September 10, 2025, posting consolidated net sales of $403 million, a 4% year-over-year decline, and adjusted EPS of $1.26, above guidance despite ongoing margin pressures from elevated U.S. tariffs. Management affirmed full-year guidance, including net sales of $1.475 billion to $1.515 billion and adjusted EPS of $2.80 to $3.20, reflecting disciplined cost controls, targeted price increases, and investments in supply chain and store expansion.
Lilly Pulitzer drives resilience through DTC strength
Lilly Pulitzer posted positive direct-to-consumer total comparable sales, offsetting wholesale declines and outperforming the Tommy Bahama and Johnny Was segments, which posted high single-digit and low double-digit negative comps, respectively. The brand’s recent product innovation and limited-edition capsules strengthened engagement, with robust early demand for heritage-inspired collections supporting optimism for second-half performance.
“Looking at our recent performance by brand, Lilly Pulitzer continued its deep connection with its core consumer in the second quarter and posted positive direct-to-consumer total comparable sales, building on the strong engagement we saw in the first quarter. A key contributor to this momentum in the second quarter was delivering exciting innovation in our casual product, including the linen sea spray jacket that sold out in all colors and extending our offering of elevated everyday products, including polished shorts, silk tops, and new stretch twill pants that all performed extremely well.”
— Tom Chubb, Chairman and CEO
Lilly Pulitzer’s outperformance highlights the importance of brand-specific product innovation and direct channel engagement as critical drivers of comparative sales growth and portfolio stability despite wholesale softness.
Tariff mitigation enables OXM to maintain guidance
Oxford Industries faced approximately $80 million in incremental U.S. tariff exposure, but through proactive supply chain shifts, accelerated inventory receipts, vendor concessions, and select price increases, management mitigated roughly half this impact, resulting in a net tariff drag of $25 million to $35 million. These actions enabled the company to maintain guidance ranges for both net sales and adjusted EPS, despite 160 basis points of gross margin contraction compared to the prior year period and the expectation of a full-year 200 basis point margin decrease.
“Based on current tariff policies and our historical 2024 sourcing patterns, we estimated a potential incremental tariff exposure of approximately $80 million in fiscal 2025 prior to any mitigation actions such as accelerated receipts, sourcing shifts, vendor concessions, or price increases. Accelerating receipts and sourcing shifts, we were able to mitigate roughly half of this exposure. Through additional vendor concessions and select second-half price increases, our current annual guidance reflects a net tariff impact of approximately $25 million to $35 million or approximately $1.25 to $1.75 per share after tax.”
— Scott Grassmeyer, CFO and COO
Effective tariff mitigation illustrates operational adaptability, but with tariff policies likely to persist, ongoing vigilance and dynamic sourcing strategies will remain central to long-term margin protection.
CapEx and store growth recalibrated for future flexibility
The company continued to invest heavily in infrastructure, with capital expenditures projected at $121 million (primarily for the Lyons, Georgia distribution center and new store openings), but signaled a reduction to a $75 million CapEx run-rate from FY2026 onward, and a planned annual pace of approximately 15 net new stores, while Johnny Was store growth is paused amid ongoing brand repositioning.
“Yeah. We expect the Lyons project to be substantially complete. There could be a tiny bit that trails over to next year. But once that’s behind us, I think an ongoing rate is gonna kinda be in that $75 million pace. It really depends on the number of stores, and the number of store pace has slowed down a little bit than what it was. But I would say somewhere in that $75 million neighborhood.”
— Scott Grassmeyer, CFO and COO
Scaling back capital expenditures after large logistics projects and moderating store expansion reflect a shift toward improved capital efficiency and risk management, structurally enhancing cash flow potential in a volatile macro environment.
Looking Ahead
Management reaffirmed full-year guidance of $1.475 billion to $1.515 billion in net sales and adjusted EPS of $2.80 to $3.20, with expectations for flat to modestly positive comparable sales through the fourth quarter, and a net decrease in inventory levels is expected during the remainder of the year after frontloading for tariffs earlier. Capital expenditures are projected to moderate to $75 million annually beginning in FY2026, with annual new store growth targeted at about 15 locations, down from the prior year’s 30. Guidance assumes current tariff regimes persist, and profitability faces continued headwinds from elevated tariffs and promotional intensity.
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