Greetings, and welcome to the Oxford Industries, Inc. first Quarter Fiscal 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Smith. Please go ahead. Thank you, and good afternoon.

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; 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 financial condition to differ are discussed in our press release issued earlier today. Documents filed by us with the SEC, including the risk factors contained in our Form 10-Ks. 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. I'd now like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO, and Scott Grassmeyer, CFO and COO. 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. We are pleased to be reporting results for the first quarter of fiscal 2025 that were solidly within our forecast range in the midst of very challenging and unpredictable market conditions. The so-called hard data indicates that the consumer still has the ability to spend money. However, the soft data, particularly consumer sentiment surveys, as well as reports on discretionary spending, indicate a consumer that is much more cautious when it comes to spending on discretionary items, which includes fundamentally everything we sell. Our own experience during the quarter was similar to what we've seen over the last several quarters, and that is that the consumer responds most strongly to new, innovative, and differentiated products and to promotions where the perceived value is high. Complicating this situation is the rapidly evolving US international trade policy, particularly with regard to tariffs. Tariff policy is challenging us in several ways. Consumer concern about the impact of tariffs on prices and the economy is exacerbating weak consumer sentiment. The rapid evolution of the tariff policy is making it exceptionally difficult to plan and forecast the business. And finally, the tariff policy is requiring us to significantly realign our supply chain, which could prove to be the catalyst for implementing some changes in our sourcing strategies that ultimately benefit our company and shareholders but certainly present short-term challenges and financial ramifications. During challenging market conditions, like those that we are currently encountering, it is imperative that we not lose sight of the fact that our reason for being is to evoke happiness in our customers. All seven of the brands in our portfolio are what we call happy brands, and our customers look to them for the spirit of optimism and possibility that they exude. We…

Thank you, Tom. As Tom mentioned, our teams face unprecedented uncertainty and challenges related to the rapidly developing tariff and trade environment during the first quarter. Despite these substantial challenges, our team focused on what they could control and delivered top and bottom line results within our previously issued guidance ranges. The first quarter of fiscal 2025, consolidated net sales were $393 million compared to sales of $398 million in the first quarter of 2024 and towards the high end of our guidance range of $375 million to $395 million. Sales in our brick and mortar locations were down 1% driven by a negative comp of 5%, partially offset by the addition of new store locations. Ecommerce sales decreased 5%. Sales in our food and beverage locations were down 3%, while sales in our outlet locations were comparable year over year. Sales in our wholesale channel increased 4% compared to the first quarter of 2024, with increased sales to major department stores and off-price retailers. By segment, lower sales at Tommy Bahama and Johnny Was were partially offset by a low double-digit sales increase at Lilly Pulitzer. At Salsa Cef, with its strategy to focus on product that resonates strongly with its core customer, and an increase in emerging brands driven by promising rollout of new retail locations. Adjusted gross margin contracted 110 basis points to 64.3%, driven primarily by increased freight expenses to e-commerce customers at Tommy Bahama, increased markdowns during clearance events at Lilly Pulitzer and Johnny Was, and a change in sales mix with wholesale sales, including all price wholesale sales, representing a higher proportion of net sales. We also incurred a million dollars of additional charges or an approximate 20 basis point negative impact to consolidate gross margin or $0.04 per share in cost of goods…

Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. Participants using speaker equipment, and our question comes from the line of Ashley Owens with KeyBanc Capital Markets. Please proceed.

Hi. Good afternoon. Thanks for taking our questions. So to see the strong response in Lilly in the quarter. Know you elaborated on some of the strengths you saw there. What learnings have emerged from the strengths? Is the key there to drive a broad range of colorways in the newness that you're offering and just any levers you could talk to that are in place to sustain that momentum through the balance of Bigger? Thank you.

I think the key, Ashley, really, and thank you for the question, is focusing on those most committed customers, which is sort of the top 20% of the customer base, they account for more than 60% of the sales and even more of that when you look at profitability. And really focusing in on what they love about Lilly and delivering it to them in a way that's both consistent with the DNA of the brand, which we're, in my opinion, very much doing right now, while at the same time being relevant to the current customer and marketplace. And I just think the Lilly team's done an extraordinary job of it. Ashley, you know this because you pay a lot of attention, and that really started at the beginning of last year as we celebrated the sixty-fifth anniversary, and we did some special capsules and a lot of marketing things in it. It kinda built up through the year, and it really paying off for us now. So I would say going forward, that really is the key is you know, focusing on that core customer staying true to our DNA, but at the same time staying relevant to what's going on today.

Okay. Great. And then just a follow-up. I know you discussed some of the puts and takes around margin and pricing increases at Tommy Bahama going into spring 2026. Just could you elaborate on some of your pricing plans for the other brands that you have identified? If any. Just curious as you navigate some of these margin headwinds with promotional spending and then additionally now with the tariffs, how you're balancing the potential need to stay promotional with some potential price increases to offset some of these higher costs.

Yeah. Well, a great question. And I think we threw the Tommy Bahama example out there where our plan for spring 2026 has our AUR going up by less than 3%. And then at that level, we get back all the gross profit dollars, the gross margin, the initial margin, will go down by less than 50 basis points. Now the other part of your question is you know, are we gonna experience margin dilution because of promotional activity? And I'd you know, for 2026, it's just way too early for us to you know, to really predict that. I think. Because Scott pointed out for the balance of this year, we have baked in some additional promotion. Not really more promotions, just the expectation that more business will be done during those promotional times. But for '26, all we're really all we as far as we've gotten really is the initial margins. Scott, I know if have anything. Yeah. And for, you know, for '25, you know, spring, summer, our biggest seasons and there's really you know, there's not much adjustment we could do there. And, you know, so we are starting to see some modest price increases for fall and then spring is where we really, fully mitigate.

Okay. That's super helpful color. Thank you, and I'll pass it along. But best of luck.

Thank you, Ashley.

The next question comes from the line of Joseph Civello with Truist Securities. Please proceed.

Guys. Thanks so much for taking my question. I wanted to check-in and see about the wholesale I think you said 4% growth. Just talk about how that compared to your expectations and, you know, conversations with retailers as we get to the back half of the year.

Well, I'll let Scott comment a little bit further on our expectations, but we were pleased to see that growth in the wholesale, and I would say that our performance at wholesale has been quite good, which we always like to see that. So I think we've talked about that in the past, but you know, on the on the floor of one of our big department store customers, we're going head to head with some other great brands. In a tough environment like we've got right now to see that we're actually performing quite well in that head to head competition is pretty reassuring. To see that. It shows the strength of our brands and our products. And then in terms of how you would evaluate that relative our expectations. I think wholesale is pretty much tracking to to our expectations. We are you know, we we knew we had a little bit of spring order book, and we're expecting the half of year to be down a little bit as a lot accounts have gotten, more conservative. So so now for the full year, slightly down, but, you know, slightly up from Q1. And, you know, the specialty stores have certainly been weaker than the department store. So that specialty store channel is still pretty challenged.

Got it. Thanks so much.

Thank you, Joe.

The next question comes from the line of Janine Stitcher with BTIG. Please proceed.

Hey. You've got, Ethan on for Janine. Thanks for taking my questions. So to start, great to hear that the newness is really resonating at Lilly. Just wondering if you could give some color on the newness in the assortment at Tommy and how that's resonating. And then my question, just digging in on Johnny Was kinda what drove that, mid-teens decline in Q1 and just what gives you confidence in the guide, for the brand for the rest of the year? Thanks.

Okay. So with regard to Lilly, you know, the newness, as I've commented on, has certainly been a big part of the success and our sort of newness quotient was higher this year. We were a little over 50% this year versus I think, about 40 last year. So we were pleased to see that. A lot of it was in sportswear items like the top that I highlighted. And that's great to see. We've traditionally been very, very strong in dresses, but good to see the strength in sportswear as well. And then as I mentioned, we think a lot of it we thought our print assortment this spring was really quite strong and very well balanced and gave a lot of customers great options in terms of whether they wanted to you know, go multicolor, more tone on tone, or bright or soft. They just had good options. And then in Tommy, I would say newness is working also. I mean, we're seeing that everywhere. It's, you know, it's sort of as I said, it's you know, it's things that are new and exciting and different. Or other than that, they're sort of looking for what they perceive as being high-value situations. And as Scott talked about, that means we end up doing a little bit more business proportionately during our promotional periods. And then in terms of Johnny Was guide, going forward, I think we're not projecting a big rebound there from what their current performance is. While we would love to see that, we're doing a lot of things to try to make that happen. As I talked about, the plan that we're working on is Johnny Was, for the most part, that would probably impact '26 and beyond more than it would '25. So what we've got in the guidance model does not really assume a big rebound in Johnny Was in the next quarter or two. Scott, don't know if you'd have. Yeah. No. That's accurate. Yep.

Great. Thanks. I'll pass it on.

Thank you, Ethan.

The next question comes from the line of Mauricio Serna with UBS. Please proceed.

Great. Good afternoon. Thanks for taking my question. Just wanted to dig in into the tariff impact that you provided in your outlook. It seems you know, it's much higher than what you talked about before, but even I guess as I look at the current tariffs, you know, it still seems high. Maybe could you talk about what is the gross impact that you're considering? You know, like, I guess I because I suppose the $40 million is, like, the net impact. And if you all have been facing any like, how are you thinking about the mitigation strategies beginning to, you know, materialize in your operations over the next couple of quarters? Thank you.

Yes. Mauricio, the $40 million is the gross. Before, we were at nine to 10 gross. You know, so the increase. And before, just as a reminder, the only enacted tariff at the time was the China 20%. There were no additional tariffs on the other countries at the time of that gun. So now we've gone from 10% everywhere and China going from 20 to 30, is the change. So that's what caused the nine to 10 to go up to 40. We are working on mitigation actions. But again, as I mentioned earlier, spring, summer are our biggest seasons. There's really nothing we could do about that. Some of the later fall deliveries, there is some you know, select increases. And then when we get into spring, again, we should we expect to be fully mitigated. So, you know, it'll hit us hard in '25. But, as a reminder, you know, we left last year 40% China, this year, we will average 30%, but we'll leave the year lower. And then next year, we expect to be below 10% China. So our China percentage is continuing to come down. But we obviously couldn't affect spring summer and really couldn't affect early fall or really fall much on shifts, but for resort and some spring of next year, we have some major moves coming.

Understood. Thank you.

Mhmm. Thank you, Mauricio.

Ladies and gentlemen, again, if you would like to ask a question, please press 1 or your telephone keypad. And the next question comes from the line of Paul Lejuez with Citi. Please proceed.

Thank you. It's Tracy Kogan filling in for Paul. I had a couple questions. I was wondering I know you said comps were down about 5% for the quarter as a whole. I was wondering how that trended in February versus March and April combined. And then I was curious what you're seeing in the restaurant business in terms of traffic and ticket. I saw that business was down, but just wondering what the drivers were there. Thanks.

So in response to the part of your question, Tracy, April was definitely the strongest month for us, and that was true, I believe, in both retail and e-com. Part of that, undoubtedly, was the Easter shift, so we would have expected and did expect to have a pretty good performance in April, and that turned out to be accurate. And then in terms of restaurants, the overall was down 3%, but comp was actually only down 1%. So pretty close to flat last year. I don't know if we've got the traffic numbers for restaurants or well, they've got that our kids right now. Yeah. I think in general, Tracy, the ticket sizes have been ticking up a little bit. And that's due to some of the item prices going up. And, Tracy, this year, you remember our Sarasota restaurant is still not open. We're moving locations, so that's where we had it last year during busy season. We did not have year, but it should open, I believe, late this summer. And that's why the comp Yeah. Because connects. Exactly. So the comp was really, you know, we were close to flat, which you know, was certainly better than what we saw in our retail stores.

Got it. Thank you. And just back to the question. What was do you look at Marpril, March, and April combined? I'm just wondering how that period compared to February. Like, did your business pick up?

Yes. It did. It definitely did. I mean, basically, the improvement was sequential through the quarter. And, you know, April was the best. March was better. February was the worst.

Got it. Thanks very much, guys.

Yeah. Thank you.

Thank you. There are no further questions at this time. I'd like to turn the call back to Tom Chubb for closing remarks.

Okay. Thank you, Joe, and thanks to all of you for your interest. We look forward to talking to you again in September. And hope all of you have a great summer.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.