Good day, everyone. Welcome to today’s Oxford Industries Inc., First Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time for opening remarks and introductions, I’d like to turn the floor over to Ms. Anne Shoemaker, please go ahead ma’am.

Thank you, Kellyanne and good afternoon everyone. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. 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 of operations or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K. We undertake no duty to update any forward-looking statements. 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. Please note that all financial results and outlook information discussed on this call, unless otherwise noted, are from continuing operations and all per share amounts are on a diluted basis. Our disclosures about comparable store sales include sales from our full price stores and ecommerce sites and including sales associated with ecommerce/clearance sales. Because fiscal 2017 had 53 weeks, each fiscal week in 2018 starts and ends one calendar week later than in fiscal 2017. To provide a more accurate assessment of our fiscal 2018 comparable store productivity, we are presenting fiscal 2018 comparable store sales on a calendar adjusted basis by comparing the fiscal 2018 period to the comparable calendar period in the preceding year. Thus comparable store sales for the first quarter of fiscal 2018 compared to sales in the 13 weeks period ending May 5, 2018 to the 13 week period ending May 6, 2017. And now I would like to introduce today’s call participants. With me today are Tom Chubb, Chairman and CEO, and Scott Grassmyer, CFO. Thank you for your attention. And I'll now turn the call over to Tom Chubb.

Good afternoon and thank you for joining us. During the first quarter of fiscal 2018 we executed well on our plans and I’m pleased with the results that we achieved. Our sales for the quarter finished at the high end of our range and our EPS exceeded our guidance. At the same time we continue to enhance the ways in which our customers are able to experience our powerful portfolio brands. There is no better way to deliver our unique brand experiences than through our stores, restaurants and websites, along with our select wholesale partner. In the first quarter we saw a solid growth in our direct-to-consumer business highlighted by positive consolidated comparable sales. The strongest part of our direct-to-consumer business was ecommerce where both Tommy Bahama and Lilly Pulitzer generated solid comp gains driven by increased site traffic. With our high average order size and high gross margin in the ecommerce, growth in ecommerce is accretive to our operating margin. While our bricks and mortar stores like much of the industry were impacted by the unseasonable cold and wet weather, in many parts of the country this spring our retail performance in areas where weather was good such as in Florida where we have a significant concentration of stores was strong. Florida which had solidly positive comps accounted for more than a third of our brands bricks and motor comp sales in the quarter. As we moved into the second quarter, the first quarter momentum we saw in our Florida stores spread across the country and quarter-to-date comps at both Tommy and Lilly are strong. Shifting to wholesale, as planned we made select wholesale door count reductions, primarily with department stores. This was done to insure that the customer experience at every point of distribution is consistent with the…

Thanks Tom. On a consolidated basis as Tom mentioned increased sales in our direct-to-consumer businesses, which included a 1% comparable store sales increase, were offset by our by our planned decrease in wholesale sales. Our Southern Tide business which had a very strong first quarter grew their wholesale business with the expansion of the of their signature store base. There are now a dozen Southern Tide signature stores, including four exciting new locations in the North East. In the first quarter of fiscal 2018, SG&A as a percent of net sales increased to 51% compared to 49% last year, approximately $3 million of the increase was marketing. We also had incremental cost associated with the operation of additional retail stores, particularly at Lilly Pulitzer. If you recall, in 2017 Lilly acquired 12 signature stores and opened six new stores. U.S tax reform had a positive effect on our earnings in the first quarter with a tax rate of 25.5% compared to 40.8% last year. Our adjust EPS was $1.28 in the first quarter of ’18 versus the $1.12 last year and above our guidance range of $1.15 to $1.25. Our balance sheet and capital structure remain very strong and support our growth initiatives and investments. We saw inventory balance increase about $5 million or 4% over last year to $132 million. This increase is to support planned sales increases and the operation of 18 additional retail stores of Lilly Pulitzer. We also ended the quart with $211 million of unused available under our revolving credit facility. Turning to our outlook, we initiated our guidance for the second quarter of fiscal 2018. With sales increases in each of our operating groups, we expect net sales between $300 million and $310 million in the second quarter. Adjusted earnings per share are expected to be between $1.75 and $1.85. On a comparable basis, sales were $285 million in the second quarter of fiscal 2017 and adjusted EPS was $1.44 [Technical Difficulty]

[Operator Instructions]. Again everyone, thank you for your patience. We should be connecting to our speakers here momentarily. And you’ve all rejoined the conference.

Okay, this is Scott. I know we dropped sometime during mine, so I am just going to start my section over from the beginning, so I apologize if some of this is a repeat. On a consolidated basis as Tom mentioned, increased sales in our direct-to-consumer business which included a 1% comparable store sales increase were offset by our planned decrease in wholesale sales. Our Southern Tide business which had a very strong first quarter grew their wholesale business with the expansion of their signature store base. There are now a dozen Southern Tide signature stores, including four and citing new locations in the Northeast. In the first quarter of fiscal 2018, SG&A as a percentage of net sales increased to 51% compared to 49% last year. Approximately $3 million of the increase was marketing. We also had incremental costs associated with the operation of additional retail stores, particularly at Lilly Pulitzer. If you will recall, in 2017 Lilly acquired 12 signature stores and opened six new stores. U.S. tax reform had a positive effect on our earnings in the first quarter with a tax rate of 25.5% compared to 40.8% last year. Our adjusted EPS was $1.28 in the first quarter of ’18 versus the $1.12 last year and above our guidance range of $1.15 to $1.25. Our balance sheet and capital structure remain very strong and support initiatives and investments. We saw our inventory balance increase to about $5 million or 4% over last year to $132 million. This increase support planned sales increases and the operation of 18 additional retail stores of Lilly Pulitzer. We also ended the quarter with $211 million of unused availability under our revolving credit facility. Turning to our outlook, we initiated our guidance for the second quarter of fiscal 2018 with sales…

Thank you. [Operator Instructions] We’ll hear first from Edward Yruma with KeyBanc Capital Markets.

Hi, good afternoon. Thanks for taking my question. I guess first, just so I’m crystal clear, the comp trend improvement materially post quarter end and maybe more specifically on Tommy Bahama, you know kind of maybe walk us through some of the puts and takes on comp. I know you talked about whether and then may be how is the promotional efficacy on the Flip Side promo is running versus maybe this time last year.

So I’ll start with Tommy Bahama and just since the end of the quarter and it has been pretty marketed the improvement. I mean we had a very, very good May and that’s continued on into June and up to today with strong comps in both Tommy and Lilly, and I think there are a couple of things that have contributed to that. One is sort of the more normalized weather patterns around the country has helped. Secondly, some of the marketing activities that we’ve done, so we did a big catalogue brand catalogue mailing piece that we sent out this year, that we had a piece last year, but this year is dual gender, last year was men’s only. We sent it to more people. It’s a bigger, more substantial book and we think that’s helped a lot as well. So we’re really pleased with what we’ve seen in the second quarter and in the first quarter as we said, we saw good comps in places like Florida and Hawaii where the weather was good. But as you know, and a lot of the country it really was seasonably cold and wet and that we believe held our comps back.

Got it. And a follow-up on Lilly Pulitzer, I know that it was obviously a different type of promotion or collaboration then with Target, but kind of talk about momentum post that. Did you see a pick-up in business when the Pottery Barn collaboration was running and has it introduced you to a new set of customers? Thanks so much.

Well, it certainly exposed us to a lot of new customers and that was the idea behind it. If you think about it in terms of marketing, this is sort of top of the brand, funnel type activity that’s designed to promote awareness of the brand and it did that in spades. It also drove some business in terms of some events that we did to coincide with the launch of the Pottery Barn initiative. So it drove some business, it increased awareness and if you think about it, this was a marketing event that was huge and that we actually didn’t pay for. We actually get paid for doing this. It’s not a huge amount of money and that’s not the driver for doing it, but it’s certainly a good way to drive brand awareness. And then the last thing I would mention is, I think it demonstrated to us based on the great results that Pottery Barn had, that our costume wants Lilly Pulitzer home décor and furniture. That’s something that she’s clearly given us permission to do. Very receptive to it and I think that means that that’s an opportunity for us going forward.

Okay, thanks so much guys.

Thanks Ed.

We’ll hear next from Pamela Quintiliano with SunTrust.

Great, thanks so much for taking my questions guys.

Hi Pam.

And congratulations on the quarter. So it’s just a quick one, a clarification. The weather impact, was it similar at both Tommy and Lilly and have you seen similar magnitude of improvements quarter-to-date and then with the 1Q weather challenges, was there excess carry over inventory at either division that you needed to clear through and if so, were those markdowns taken in 1Q or is there any lingering impact in 2Q?

So I’ll talk first about the weather impact and then I’ll let Scott talk about the inventory situation, but I think the weather impact – look, Lilly was a little bit stronger across the board than Tommy in the first quarter, but what happens is that Lilly’s concentration is greater in Florida, so they benefited more from the strong Florida business proportionately than Tommy did. And then in terms of you know what’s happening in the second quarter, they are both pretty close in terms of how strong their business is and it’s quite strong. It’s really been good – very good for both of them. We’ve been very happy with what we’ve seen in May and thus far in June, and then Scott maybe can fill you in on the inventory.

Yeah, we’re not too worried about the inventory situation. The second quarter is that bigger direct quarter and as Tom mentioned, we’re off to a very good start. So we’ve got some really good momentum and I think our inventories are in line and we have very brand appropriate ways to clear any goods that are left, which is just a natural part of the business. So I don’t think we have any kind of inventory bubble because of the softness, because I think the strength that we got now is certainly taking care of that.

And keep in mind, I mean we did have positive comps for the quarter. It’s not you know – we were certainly pleased with the quarter given overall circumstances and then again, I couldn’t be more excited about what we’re seeing in the second quarter.

And then, could you also just comment, specifically at Tommy how the women’s is performing and maybe any detail you can give on year-over-year change in penetration there. And then I know you mentioned Hawaii as a positive because they have more seasonal weather, but given what’s going on there? Do you think it could have been better if there weren't issues on the Big Island? Thank you.

So on the women’s business, they had a strong first quarter. I think what we’ve seen is the work that I mentioned that’s more of a second quarter item that we dropped in a May that last year it was men’s only this year has men’s and women’s. It has really stoked up the women’s even further. So it’s – had a good first quarter. Have an even better second quarter so far and then in addition to that, Pam you may have seen this if you’ve been I the Fifth Avenue store lately, but we rearranged the floor a bit and created what we’re calling a dress shop which is a dedicated area where we have dresses hanging and it makes it easier for our customer to shop those dresses and that’s helping the business as well. So a lot of good things happening on the women’s front in Tommy Bahama and then in Hawaii right now the business is really pretty strong. Could it be stronger absent the volcano issues. I guess it might be, but we certainly aren’t complaining about where it is right now.

Okay, thanks so much. Best of luck.

Thank you.

We’ll hear now from Needham & Company’s, Rick Patel.

Thank you and good afternoon everyone. Hey Tom and congrats on the positive momentum as well.

Thank you.

Just a question on your guidance. So it looks like the back of the envelopes math shows that your fourth quarter guidance is you know in the ball park of $1.20 or even higher, which is a pretty massive year-over-year increase, especially considering you are going to be lapping a 53rd week from last year. So hoping you can provide some context on what’s going on there in terms of underlying assumptions for DTC growth and if there are also any timing elements we should be keeping in mind for SG&A or taxes?

Yeah Rick, yeah the tax rate will you know – certainly will be lower than last year. As far as DTC, we will have the additional stores we open during the year and we’re having you know good gross margin expansion with some of the actions that we were sort of taking last year. Additional actions for this year on prices we think will also roll through. We’re seeing good you know outlet margin improvements which we think will continue to roll through the rest of the year. So we’re pretty bullish on the rest of the year and we think the fourth quarter just sets up for a very good direct-to-consumer quarter.

And can you talk a little bit about Lilly? As we think about the re-launch of your swim-line and your collaboration with Pottery Barn, is there any way to give a context on how much your new customer file increased in the first quarter and as we think about the rest of the year, do you have incremental drivers to keep that momentum going or is it more flow through benefits of the initiatives you had in the first quarter?

Yes I would say two things. I think some of the activities that we did in the first quarter like the Pottery Barn thing, probably you had a bit longer fuse on them. The swim you see almost an immediate benefit from and as we mentioned, that has been a good tool for acquiring additional new customers. Pottery Barn drove some great awareness and it drove some great business through some of the events that we did in conjunction with that, but we think it will also continue to have benefits through the year and then the most important things I think is that the way we set up this year. In Lilly Pulitzer there has been a steady flow of events and launches and you know special pop-up prints and all kinds of things that seems like a week or two we got something coming down the pike. So just for example, in the first quarter in addition to the Pottery Barn and the swim we have the Honda Classic down in Florida that we were a sponsor for. That’s a PGA Golf Tournament. We got lots of good buzz and did some good business around that. We had the S'well water bottle collaboration that we had done before. We just recently a couple of weeks ago launched a small Tennis Capsule. So we did some Tennis specific skirts and dresses and tops that I think created some good excitement. We had another delivery of Swim. We were basically sold out of the early deliveries. We had another one that delivered for summer and so we got a whole flow of these things. We are driving a lot of exciting by using influencers, which is something that we sort of dabbled with in the past, but I think we’ve stepped on the gas and that’s a very I think modern and brand appropriate way for us to reach our consumers. So the short answer Rick is that I think some of the activities that we did earlier in the year will continue to benefit us throughout the year and beyond, but then in addition to that we’ve got a lot of additional things coming and some of them we are not quite ready to talk about because we do like to surprise our customers and have something new and fresh and exciting for, but there is definitely a steady flow lined up.

Just the last one for me on Tommy. Tom you talked about omnichannel and planned to offer an enhanced brand experience later this year. Just curious if you can go into some more details. If you were a Tommy customer, what’s going to change experience wise versus what he or she would have experienced last year?

So as you know Rick, we’ve had this IT omnichannel infrastructure project going on for a couple of years and its one of those things where you are doing a lot of foundational work that’s really, really hard work and it’s a big investment of both time and money and effort. But you don’t really see a lot of results from that. We are getting into the phase now, we are going live with some things that have really helped us a lot. So as I mentioned on the script, I think two of the things we are excited about that are coming sort of in the back half of this year are enhanced analytics and planning and allocation that will help us have, do a better job of matching up inventory with what customers in specific locations want and then some functionality that will help streamline the omnichannel process. So basically when you go in a store and you are looking for particular shirt in a size medium, and maybe they don’t have in stock, it moves and facilitates that process of getting that shirt for you and then next year we’ve got what I think of is even more exciting stuff that gets in to some of the buy online, pick-up in store, buy in one store maybe have it, so you can pick it up in another store. All these different permutations of things that people want to be able to do now that will be coming a little bit later. So we are sort of getting into the fun phase of the whole omnichannel IT project.

That’s great. Thank you guys! All the best!

Thanks a lot Rick.

We’ll hear next from Michael Kawamoto with D.A. Davidson.

Hey guys, thanks for talking my question. How’s it going?

Hey Michael, good. Thanks for your call.

Yeah. So just on the Lilly flash sale in August last year I think you put a little more on sales due to some – taking some discounted merchandise out of stores earlier in the year. What are your expunctions for the flash sale this year given you had a pretty big sale last year?

It will probably be a little bit larger, similar size, maybe a little bit larger. We do in the spring summer season. We are able to buy a little more inventory, do a little more chasing, knowing that we have that big August opportunity where we have a very profitable exit. So right now we are planning to flash show up slightly from last year in August and we did $24 million last year in August flash.

And Michael as you know, that is our primarily liquidation vehicle in Lilly Pulitzer. Our website is 100% full priced product for 360 or 361 days a year. We do limited in store markdowns, we don’t have outlet stores. So the customer doesn’t have many chances to buy Lilly Pulitzer at a reduced price and there is a lot of pin-up demand out there when that flash sale rolls round in August.

Got it, thanks. And then on Tommy you’ve made some substance improvements in recent quarters. Can we get an update on the Tommy outlet operations, how those are going?

We are very pleased with the progress there, especially with our gross margin expansion and outlets. That’s been a very strong, I think our outlooks better and we would rather have higher gross margin, less highly promotional outlets and we are able to achieve that now.

Awesome! Thanks guys and best of the luck for the rest of the year.

Thank you, Michael.

[Operator Instructions] We’ll hear now from Susan Anderson with B. Riley FBR.

Good afternoon, this is Luke Hatton for Susan.

Hi Luke.

Hi, how are you? So just generally, how does your – you know the stronger sales momentum you are seeing and sort of the improved consumer confidence across the retail space. How is that affecting how you are thinking about store openings going forward?

Well, I think there are a couple things that impact store openings. So you know obviously, the improved consumer confidence helps. Actually the changes in the tax law helps a lot, because that’s just right out of the box improving your after tax sort of cash return on your investment that makes the math work a little easier and a little better. At the same time we are in an emerging omnichannel world where there is more and more business is being done online. For us that’s a good thing, as we mentioned in our prepared remarks ecommerce business because of our high average order size and our high gross margins ecommerce business is actually accretive to our operating margins. So we don’t mind growth in ecommerce and the trick going forward is to keep ecommerce and physical stores in the appropriate balance. But there are lots of good opportunities out there for us, we highlighted a couple again on the prepared remarks like couldn’t be more excited about the Tommy Bahama Marlin Bar and Store in Palm Springs, California that just opened and then in Lilly, we mentioned we got Whaler’s Village on Maui and Hawaii opening in a couple of weeks. We think that’s going to be a terrific store for us. Its been a terrific Tommy Bahama location for many years and then we’ve got Fashion Island in New Port Beach California going. So we are starting to you know stake our claim to the western part of the United States of Lilly Pulitzer and then we’ve got a terrific store coming on Wirth Avenue in Palm Beach. which is the home of Lilly Pulitzer going back almost 60 years ago. So there will be new stores but at the same time we are seeing a lot of growth opportunity in ecommerce and we are excited about that as well.

Got it, thank you. And then just switching gears. So where are you sort of in the process of transitioning Southern Tide over to the overall sourcing and distribution platform? And then also for that website is that still tracking to roll out in the first half of this year?

Yes, so Southern Tide I would say is pretty much fully integrated at this point. We are very, very pleased with the way that has all gone and the team is totally bought into being a part of Oxford Industries and we’ve totally bought in to having Southern Tide as part of the company. It’s a great brand with lots of great opportunity. They did transition to a new ecommerce platform during the first quarter and ecommerce continues to be a great growth opportunity for them. They saw a growth during the first quarter and their wholesale is growing too. So I think for the year that will end up being about 20% of the business on ecommerce with good growth in both wholesale and ecom.

Okay thank you. Good luck next quarter.

Thanks a lot.

We’ll hear now from Dana Telsey with Telsey Advisory Group.

Hi, good afternoon everyone, and nice to see the progress. As you think about the wholesale channel, any more color on the whole sale channel by brand, ordering patterns and just what you are seeing there even in terms of promotion. And then the accelerated pace of business you’ve seen so far in the second quarter to date, is that more traffic, more conversion? Where do you see that evolving? And then just lastly on the Lilly Pulitzer Swim how is that contribution in margin and where do you see it getting towards the percentage of the Lilly business. Thank you.

Okay, so the wholesale sales, I would say that most of our wholesale partners, their businesses are actually performing pretty nicely right now for the most part. And even though we are planning wholesale down for the year, we actually have in some cases more than a few where people are actually chasing goods right now, which is a positive to see. You know overall for the long term Dana as you know we value wholesale, we are in the in the wholesale business and we plan to be in it. We do see more growth over time in direct-to-consumer, but whole sale market seems to be doing pretty well right now. Your second quarter was..

Second quarter is the…

Second quarter momentum, yeah its traffic has improved a good bit. I think we were happy with conversion rates in the first quarter in several cases they picked up and – but I think the bigger driver so far in the second quarter has been traffic that’s improved and on Swim that’s going to be a relatively small category for us. But its, you know to us it demonstrates that we can provide more of her needs for a day at a resort. So we can dress her not only in the morning at breakfast, for exercise, for dinner and cocktails and they in the evening, in the afternoon, but we can also dress her literally for the beach and the pool with swim and so it rounds out our offering there. I think the second thing that it demonstrates is how we can look at an opportunity, be innovative in the product that we are offering and then take an innovative approach to marketing, which we did primarily through influencers this time and really make it work for our customer, really make her happy, delight her and in the process of doing that do some good business. On the margin structure, I don’t know Scott if you want to comment on that.

It’s close to our apparel margins and I think they will keep getting better as the category does grow, but its good margin business.

Thank you very much.

Okay thank you Dana.

And with no other questions, I would like to turn the program back to Mr. Chubb for any closing remarks.

Thank you very much Kellyanne. We have a terrific portfolio of brands and an incredible team of people that bring these brands to light. By staying focused on providing a great brand experience to our customers, I am confident we are well positioned to deliver consistent earnings growth and increase shareholder value over the long term. Thank you again for your time this afternoon. We appreciate your interest. Look forward to speaking to you again after Labor Day and hope you have a wonderful summer.

That will conclude today’s conference. Again thank you all for joining us.