Good day, everyone. Welcome to today's Oxford Industries fourth quarter earnings 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.

Thank you, John, 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 statement. 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 statement. 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 e-commerce site and excludes sales associated with outlet stores and e-commerce/clearance sales. Because fiscal 2017 has 53 weeks, each fiscal week in fiscal 2018 starts 1 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 fourth quarter of fiscal 2018 compare sales in the 13-week period ended February 2, 2019 to the 13-week period ended February 3, 2018. Now I'd 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 now I'd like to turn the call over to Tom Chubb.

Good afternoon, and thank you for joining us. I want to begin my comments today by briefly recapping our 2018 consolidated results and then spend some time on each of our brands: Tommy Bahama, Lilly Pulitzer and Southern Tide as well as Lanier Apparel. Fiscal 2018 was a solid year, and I am very pleased with our overall results. Net sales increased 2% to $1.107 billion in a year with 1 less week than the prior year. More important than the total figure was the composition of our growth. Our comparable sales grew by 4%, fueled by strong gains in our e-commerce business and positive overall bricks-and-mortar comps. E-commerce remains our fastest-growing channel of distribution, increasing to 21% of total revenue this year. At the same time, we continued to strategically prune our wholesale distribution, which was $25 million lower than last year. And our adjusted earnings grew significantly, up 18% to $4.32 per share. We are proud of our accomplishments in 2018, and our results included important contributions from each of our brands. Here's a bit more about our lifestyle brands. I'll start with Tommy Bahama. At $675 million in revenue, Tommy Bahama is an authentic brand that differentiates itself in the retail sector through its compelling casual product assortments and fun, relaxed experience for our guests in our stores, restaurants and online. In 2018, with a laser-focus on improving key operational areas of the business, we achieved gross margin expansion and growth in Tommy's adjusted operating margin. Tommy Bahama's position in the marketplace is enhanced by its stores with food and beverage adjacencies. We've been in the restaurant business for over 20 years, and we see our expertise in running integrated F&B retail locations as a true competitive advantage that allows us to deliver a one-of-a-kind experience. Locations…

Thanks, Tom. I'm going to spend some time on a few additional 2018 items and some details on our 2019 outlook. Our plans turned out as expected for our fourth quarter, which had 1 less week than in 2017. In the fourth quarter, our results included year-over-year improvements in sales, adjusted operating margin and adjusted EPS. And our fourth quarter consolidated comp was a low single-digit increase. For the full year, our strong 4% comp increase and expansion gross margin generated an improvement in operating income in fiscal 2018 despite a $25 million wholesale sales reduction, $9 million of additional marketing spend and approximately $2 million operating income impact from 1 less week than in 2017. Our balance sheet remained strong, and we have a capital structure wealth addition to support plan growth. Our inventory balance at year-end was $161 million, up approximately $34 million compared to the same point last year. About half of the increase was due to a shift in the timing of Chinese New Year, resulting in approximately $16 million more inventory on the water and at this time last year. The other half of the increase is primarily to support planned increases in sales at Lanier Apparel and a deeper positioning core products at Tommy Bahama. Cash flows from operations continued to be strong at $96 million, and free cash flow was $59 million. We returned $23 million to our shareholders through dividends in 2018, and we continue to pay down debt. As of February 2, 2019, we had $13 million of borrowings outstanding. I'd now like to walk you through our projections for 2019. For the full 2019 fiscal year, adjusted earnings per share is expected to grow to be between $4.45 and $4.65 on sales in a range of $1.135 billion to $1.155…

[Operator Instructions]. We will take our first question from Edward Yruma of KeyBanc Capital Markets.

This is Matt on for Ed. So you all have a pretty significant step-up in marketing during the past year, and it seems like you won't do as much in 2019. We were wondering if you could talk through your reasoning a bit and maybe how this will flow through the business for the year for both revenue and SG&A.

Yes. So last year, if you remember, at the beginning of the year this time, we talked about the additional marketing spend that we were going to do, and I think it was the $9 million year-over-year increase. And we also talked about the fact that we were going to try a lot of different things. So we did a lot on the digital front. We did a lot on the catalogs that have always been important to us in all our brands. And we actually did some sort of more traditional media, including radio, TV, some print, some outdoor and really just tried a lot of different things. We've learned an awful lot from that. And as a result of those learnings, I think we'll be able to be more efficient in our marketing spend this year, actually spend a little bit less in dollars and still drive good business results. So I think we're going to see some of the benefit of what we did last year. And the focus this year will be more on digital and catalogs, I think, would be the two primary buckets with some other stuff mixed in, but it will be a lot of that.

Got it. And one quick additional question. Can you talk to the performance of tourist and non-tourist locations?

Well, I think that Florida year-to-date has been really, really good for us, really, across the board, I would say, and that's certainly a tourist location. Out West, where there are also tourist locations, we were not as strong quarter to date, but we think that's mostly attributable to weather. If you paid attention to what's happening out there, they've had a very, very rough winter, including even in places like Southern California and even in Hawaii. So as the weather started to turn, as we've said in the prepared remarks, our business has turned, too. And really, what we've seen over the last couple of weeks has been very, very positive. And looking at our business today, we feel quite good about it. We feel very good about the prospects for April with Easter falling 3 weeks later than it did last year. Last year, it was on April 1. This year, it's on April 21. So everything is setting up well for us to have a great April, and we think we can finish the quarter strong. But we did have a tough February that's going to weigh down the results a little bit.

We will now take our next question from Susan Anderson of B. Riley FBR.

I guess just to follow on the last comment, nice to hear that the better-weather states are doing well. I guess my question is how should we think about the comp cadence throughout kind of the year? Should we think about first quarter being a little bit lower with that slow start and then the rest of the 3 quarters picking up a little bit for the brands?

Yes, yes. We expected Q2, 3 and 4 to be stronger comp quarters than Q1.

Great. And then I guess just in terms of the gross margin opportunity left with Lilly and then if you could maybe just kind of go over also the opportunity with Tommy and the gross margin opportunity for the year, that would be great.

Yes, at Tommy, I think we still have room for some minor expansion there. We've had -- we made some good progress on that over the last couple of years in both gross margin, operating income expansion. And obviously, at Tommy, goal is to continue to expand that operating margin. And Lilly, we expect their gross margins to be kind of flattish. And I think we had a reduction of wholesale last year that should stabilize. And we think they've got really good gross margins, and we think that can maintain.

Great. And then I guess one last one, if I could fit it in. I think I heard you talk about some product expansions within Lilly, few bigger sizes. Maybe if you could just expand on any other category expansions. And then also for Tommy, what you're thinking about for the year.

Okay. So with Lilly, we added golf this year. Back in February, we launched our new golf collection and have been very pleased with what we saw there. We're in our second year of swim and tennis, and we're building on those categories. And then as we talked about the dresses, which is sort of our biggest overall category and really the core of Lilly Pulitzer, we are expanding the size range a bit. And that's something that we're always looking at. Obviously, you don't want to build inventory and sizes that you can't sell, but you do want to serve as many guests as you can. And we think we've got a bit of an opportunity there well. And then in our core, where we're so strong in things like dresses and rompers, we think through innovation and just adding newness in innovation in those categories, we can continue to grow there as well. Shifting gears over to Tommy Bahama, we've really invested heavily in our core in men's, and we've been really pleased actually with what we're seeing in that. So things like the Boracay pant, Susan, that you've heard us talk about a lot, we all love wearing that. We're really building on that franchise. And we've now got a Boracay 5-Pocket. We've got a Boracay jean coming. We've got Boracay just in different fabrications coming, all very exciting and good group growth channels for us. And we've invested in the inventory to support growth there, and that would appear to be paying dividends for us. Things like the Emfielder is another one of those core styles that we think we just can continue to build on that franchise, and then we've introduced a couple of new items this year that we're very excited about that we…

Great. Very helpful. Sounds like a great offering for the year. So that's the one...

Yes. We've got a lot of great innovation happening.

We'll take our next question from Steve Marotta, CL King & Associates. [Operator Instructions].

If you could you talk a little bit about gross margin expectations for the year and most specifically for the first quarter and maybe overlay that commentary with what is going on quarter to date as well.

Yes. For the year, we should -- we're probably kind of flattish for the year with Lanier. We're expecting Lanier to make up a tiny bit more of the mix. So we're getting some expansion and Tommy kind of flattish in our other branded businesses, and Lanier will make up a bigger piece of the mix. And Lanier will make up a bigger piece of the mix in the first quarter. You have some things in the fourth quarter that kind of slid forward, so they should have a bigger first quarter year-over-year. So it should -- it might pull our year-over-year gross margins down slightly on a consolidated basis, but we're expecting a little bit of gross margin expansion at Tommy in Q1 also.

Okay. So even with that slower start, that hasn't materially affected your gross margins?

No. It's been more of a top line issue.

Yes. That's right.

And again, with the weather breaking a couple of weeks ago, we certainly are seeing a nice pickup. But we had February and then to early March, where it was softer than we would have liked.

I know you don't guide specifically from a comp standpoint on a quarterly basis, but is it possible that the first quarter comp would be negative?

It's possible that it could be. But I think with what we've seen recently and with the Easter shift and the weather improving, I think we -- I don't think we're going to have a particularly strong comp in the first quarter, but I think we're fairly optimistic that we can be at least slightly positive in the quarter. And again, we're -- if it were just about what we're seeing now, we'd be very ecstatic. It's the February overhang that has caused us to moderate our guidance a little bit.

We'll now take our next question from Rick Patel.

I had a question about e-commerce penetration going forward. And correct me if I'm wrong, but I think your penetration is in the high teens at Tommy and mid 30% range for Lilly already. As digital continues to outperform, what do you see is the right penetration across your various brands? And can you also -- as a follow-up, can you touch on the levers that you can pull to use your digital platforms to drive customers into the stores? Just curious if there's anything to call out in terms of loyalty or rewards programs for the new year.

Yes. So I think that the two channels clearly work in combination, and we're seeing that in spades right now in Tommy Bahama where we're actually seeing more than ever customers coming into their stores that have bought something online, and for whatever reason, size, color, whatever, they want to exchange it. They're coming to stores, and we're actually able to not only fulfill their needs, but actually, in a lot of cases, sell them something else while we're at it. So there's a great sort of symbiotic relationship between the two. We do expect e-commerce, as we mentioned in the prepared remarks, to continue to grow as a percentage of total revenue and to grow at a faster rate than the other channels of distribution. Lilly's penetration is higher already because they've got all the off-price business that they do through e-commerce. Tommy, a lot of that's happening in their outlet stores, but they were at 36% in '18, up from 34% in '17. And then Tommy was at 18%, up from 16% the previous year. And I've got -- both got good growth plans for this year, too, in e-commerce.

And so on the -- on Lilly e-commerce, I think you're planning it to grow high single digits for the year. Is it safe to assume that the website issues you had, are they behind you at this point? Or do they still remain a work in progress with good visibility?

No. They -- some of them are behind us. Not a lot of them are behind us. I don't think we'll be full -- have them all behind us until the end of the year. So going into 2020, we would expect and hope that we would have the website exactly where we'd like it to be, but we're continuing to chip away. And obviously, we're prioritizing things based on how difficult they are to implement and what the payoff is in trying to maximize the return on our work there and get the most bang as soon as we can. But to be very transparent about it, it will be the full year, I think, before we've got it all worked out. And that's why the growth rate for Lilly e-commerce we've said is in the high singles. I think if the website was everything that we wanted it to be right now, I'm sure we'd be in double-digit growth forecast for Lilly e-com as we are in Tommy.

And just the last one on the partnership with Pottery Barn with Lilly Pulitzer, it remains a focus for the spring. So just curious, is this going to be a longer-term partnership? And can you remind us of the economics of this?

So it's basically a licensing deal, so we had a royalty on what Pottery Barn sells. So it's a very capital efficient sort of arrangement for us. We like it a lot. Our customer loves having the furniture available to her and the home goods available to her. And Pottery Barn is a great partner to be able to do that with, and it certainly has opened our eyes to the reality that, that category exists as a business opportunity for us. I don't want to comment at this point exactly what the future might look like on that beyond this year, but we do believe there's -- it's something that our customer wants to be able to buy. And it's been great to have a partner like Pottery Barn to help fulfill that need.

We'll take our next question from Ross Licero, Telsey Advisory Group.

Just had a question -- I think you mentioned going deeper in some key inventory items. Just wanted to see what your rationale was behind that, if it was getting better pricing. Or were you running out of popular product? Just a little more color there.

Yes. I think certainly we wouldn't do it just to get better pricing. We wouldn't buy more inventory, but that is certainly a side effect that's a pleasant one is that when we do have that greater volume in key items, we can help drive prices down, which has happened in Tommy Bahama. And that's part of where the gross margin expansion is coming from. But it was really just to make sure that we weren't missing demand. So there are 2 parts of making sure that we don't miss demand, and one of it is just owning more inventory and having more of it out in the stores so that when a guy goes in to buy a pair of Boracay pants, we've got his size in stock. And then the other piece of it, which we're working on, we expect to have implemented by the end of the year is as a systems fix, and it's the implementation of an enterprise order management system, which basically, to paraphrase it, allows us to fulfill demand wherever it's occurring, from inventory, wherever it may reside. So it will give us full ability to both see and access inventory anywhere in the system when a guest walks in the store. And the way that we've been thinking about this internally is that when a guest walks into the store and he's got a picture of a shirt, and he says, "Do you have this in a size large, color maybe blue?" We want to be able to say, yes, we have that because we know somewhere in the system, we've got it, and we can get it to him within a day. That's the objective. So buying a little more inventory and addressing the system so that we don't miss sales last year. We definitely miss some demand in some of these key items.

Okay, great. And then just on the Marlin Bar. To clarify, are you guys opening one net new Marlin Bar this year?

No. Two of those are -- there are three opening. 1 is entirely new. Two of them were just standalone retail stores that will be moving within their centers, and then -- or one of them is actually a street location. One is in the center. So they'll be moving and reopening as Marlin Bar, so with a store and the bar with some food offering all in one location.

Okay. Got it. And then given the success that the Marlin Bar has been having, why not accelerate those openings?

It's really just the challenge of finding the right real estate. It's a very different kind of concept that doesn't necessarily fit easily into every retail venue, and it's working on getting the landlords to understand what the requirements are and what we need for it to make a good Marlin Bar location and then finding those. But the pipeline is building. We've got several in the queue already for 2020, and we're looking at more opportunities. So I think we'll be able to -- provided we continue to see positive results and are pleased with what we're seeing, I think, as we get into the 2020 and beyond, there will be an opportunity to pick up the pace a little bit.

There are no further questions. I would now like to turn the call back over to Tom Chubb for any additional or closing remarks.

Thank you very much for being with us today. We appreciate your attention and your support, and we look forward to talking to you again this summer.

This concludes today's call. Thank you for your participation. You may now disconnect.