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–Strength in E-commerce in all Brands–
— Excellent Liquidity with Strong Positive Cash Flow–
–Declares Dividend of $0.25 per share–
ATLANTA, Sept. 03, 2020 (GLOBE NEWSWIRE) — Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its second quarter of fiscal 2020, ended August 1, 2020.  As the effects of the COVID-19 pandemic continued to impact business in the second quarter, the Company remained focused on protecting the health and well-being of its employees and customers, the integrity of its brands, and preserving its liquidity.Consolidated net sales were $192 million compared to $302 million in the second quarter of fiscal 2019. For the second quarter of fiscal 2020, the Company reported a loss of $0.37 per share on a GAAP basis and an adjusted loss per share of $0.38.  This compares with earnings per share of $1.76 on a GAAP basis and $1.84 on an adjusted basis in the second quarter of fiscal 2019.In the second quarter of fiscal 2020, the Company incurred $9 million of charges on a GAAP basis related to credit losses, inventory markdowns and fixed asset and operating lease impairment.
               
Thomas C. Chubb III, Chairman and CEO, commented, “As the effects of the COVID-19 pandemic continue to impact our business, we remain focused on our top priorities – protecting our people and customers, supporting our brands, and preserving liquidity, while never losing sight of our goal of delivering long-term value to our shareholders. With this as a backdrop, we are encouraged by our overall second quarter performance, which reflects the strength of our brands and the resilience of our people in these unprecedented times.”
“During the second quarter we leaned heavily into our advanced digital capabilities to capitalize on the accelerated shift to online spending,” continued Mr. Chubb. “All of our brands positively contributed to the 52% year-over-year increase in e-commerce sales, with Lilly Pulitzer as the standout, up an extraordinary 142%. The Lilly Pulitzer product collection this summer was very strong, and in many ways offered exactly what the customer was looking for – fun, happy, easy to wear apparel.  The collection was highlighted by very effective digital marketing, to which we shifted more resources in the quarter.  A non-comp flash sale in June also added to the success of Lilly’s second quarter results. Historically, the Lilly website only offers sale items five days a year. To ensure excellent inventory control, an additional two day flash sale was held in the second quarter which generated $15 million of sales at a solid 40% margin.”Mr. Chubb continued, “In contrast, consumer traffic in brick and mortar locations remained very challenging in the quarter, driving meaningful revenue decreases in our stores and restaurants.  In addition to operating under restricted hours and limited capacity, important markets which rely heavily on fly-in tourists, such as Hawaii, Las Vegas and New York City, were pressured even further.  Not surprisingly, our wholesale channel of distribution was also challenged, and wholesale sales in the quarter were less than half of what they were a year ago.”“Given the conditions we’ve been operating under, I am very pleased with our ability to keep our inventory levels in check and reduce expenses for the quarter by $28 million compared to last year.  These actions helped fuel strong cash flow from operations and ensure we ended the second quarter in an excellent liquidity position.”Mr. Chubb concluded, “As we move into the back half of the year, we will continue to face the challenges and uncertainties created by the pandemic. In the third quarter, which is typically our smallest quarter each year, we are expecting the year-over-year decline in bricks and mortar traffic to be slightly less pronounced than it was in the second quarter.  In addition, our Lilly Pulitzer flash sale, which has been a bright spot in the third quarter, is expected to be significantly smaller as some of the inventory that would have been available for the September event was pulled forward into the non-comp event in June. As a result of the reduced traffic, a smaller flash sale and continued softness at wholesale, we expect revenue to decline year over year at a rate similar to the second quarter. For the fourth quarter, while we don’t anticipate a significant rebound in brick and mortar traffic, we believe we will move closer to break-even and expect to return to profitability in fiscal 2021. I am confident that our amazing and talented people, our brands that speak to the happy times consumers long for, and the strength of our balance sheet will ensure our long-term success.”Liquidity and Balance SheetCash flow from operations for the second quarter of fiscal 2020 was $70 million compared to $73 million in the prior year period.As of August 1, 2020, the Company had $97 million of cash and cash equivalents, $257 million of unused availability, and $65 million of borrowings outstanding under its revolving credit agreement.  In the prior year, the Company had $31 million of cash and cash equivalents and no borrowings outstanding.The Company believes it has ample liquidity to satisfy its ongoing cash requirements in fiscal 2020 and for the foreseeable future.  These cash requirements generally consist of working capital and other operating activity needs, capital expenditures, which are expected to be approximately $30 million in fiscal 2020, interest payments on debt and dividends.Inventory decreased 3% to $149 million at the end of the second quarter compared to $153 million in the prior year.Second Quarter Fiscal 2020 SummaryConsolidated net sales decreased 36% in the second quarter compared to the second quarter last year.  E-commerce grew 52% in the second quarter with growth in all of the Company’s branded businesses. The growth in e-commerce was offset by decreases in the retail, restaurant and wholesale channels of distribution.
— The Company, which temporarily closed its retail stores and restaurants in March, began a gradual reopening of locations in the second quarter.  At the time of this release, most stores and restaurants were open, but operating under restricted conditions for the safety of employees and customers. 
— Retail and restaurant sales were 69% and 59% lower, respectively, and the wholesale channel decreased 55% year over year.
Gross margin was 54.6% compared to 59.5%.  Gross margin decreased primarily due to an increase in promotional activity, including a non-comp flash sale at Lilly Pulitzer, and inventory markdowns.SG&A decreased 19% or $28 million to $116 million as cost savings measures were taken, primarily related to employment costs and occupancy costs partially offset by provisions for credit losses and asset impairments. The effective tax rate was a benefit of 30% compared to a charge of 25% in the second quarter of fiscal 2019.The Company reported a loss per share of $0.37 and, on an adjusted basis, a loss per share of $0.38.DividendThe Board of Directors declared a quarterly cash dividend of $0.25 per share, payable on October 30, 2020 to shareholders of record as of the close of business on October 16, 2020.  The Company has paid dividends every quarter since it became publicly owned in 1960.Fiscal 2020 OutlookDue to the significant uncertainty created by the COVID-19 pandemic, the Company is not providing a financial outlook for fiscal 2020.Conference CallThe Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live webcast of the conference call will be available on the Company’s website at www.oxfordinc.com. A replay of the call will be available through September 17, 2020 by dialing (412) 317-6671 access code 13708106. About OxfordOxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama®, Lilly Pulitzer® and Southern Tide® lifestyle brands, as well as other owned brands.  Oxford also produces certain licensed and private label apparel products. Oxford’s stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford’s website at www.oxfordinc.com.Basis of PresentationAll per share information is presented on a diluted basis.Non-GAAP Financial InformationThe Company reports its consolidated financial statements in accordance with generally accepted accounting principles (GAAP).  To supplement these consolidated financial results, management believes that a presentation and discussion of certain financial measures on an adjusted basis, which exclude certain non-operating or discrete gains, charges or other items, may provide a more meaningful basis on which investors may compare the Company’s ongoing results of operations between periods.  These measures include adjusted earnings, adjusted earnings per share, adjusted gross profit, adjusted gross margin, adjusted SG&A, and adjusted operating income, among others.Management uses these non-GAAP financial measures in making financial, operational and planning decisions to evaluate the Company’s ongoing performance. Management also uses these adjusted financial measures to discuss its business with investment and other financial institutions, its board of directors and others.  Reconciliations of these adjusted measures to the most directly comparable financial measures calculated in accordance with GAAP are presented in tables included at the end of this release.Safe HarborThis press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which typically are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, the impact of the current coronavirus (COVID-19) pandemic (which among other things, may affect many of the following risks); demand for our products, which may be impacted by competitive conditions and/or evolving consumer shopping patterns; macroeconomic factors that may impact consumer discretionary spending for apparel and related products; costs of products as well as the raw materials used in those products; expected pricing levels; costs of labor; the timing of shipments requested by our wholesale customers; changes in international, federal or state tax, trade and other laws and regulations, including the potential imposition of additional duties; weather; fluctuations and volatility in global financial markets; retention of and disciplined execution by key management; the timing and cost of store and restaurant openings and remodels as well as other capital expenditures; acquisition and disposition activities, including our ability to timely recognize expected synergies from acquisitions; expected outcomes of pending or potential litigation and regulatory actions; the impact of any restructuring initiatives we may undertake in one or more of our business lines; access to capital and/or credit markets; the impact of the CARES Act and other legislation; changes in accounting standards and related guidance; and factors that could affect our consolidated effective tax rate, including estimated Fiscal 2020 taxable losses eligible for carry back to pre-U.S. Tax Reform periods. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. contained in our Annual Report on Form 10-K for the period ended February 1, 2020 under the heading “Risk Factors” and those described from time to time in our future reports filed with the SEC, including our Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2020. You should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made.  We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.