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Oxford Industries (OXM -5%) is trading lower following disappointing Q4 (Jan) earnings results/guidance last night. This apparel company, which owns Tommy Bahama, Lilly Pulitzer, Johnny Was and some emerging brands, focuses on the laid-back vacation vibe. Let's start with some positives. After four consecutive EPS misses, OXM reported solid EPS upside for Q4. Revenue fell 3.4% yr/yr to $390.5 mln, but that was better than analyst expectations.

• OXM had a successful holiday season as its customer showed up to buy gifts for loved ones. OXM was particularly pleased in the weeks leading up to Christmas by the performance of some of its newer, and higher price point, products. Unfortunately, OXM's guidance for both Q1 (Apr) and the full year were well below analyst expectations.
• The company said challenging trends in January accelerated into February and are likely an indicator of what to expect in the first half of FY25. However, OXM does expect strong selling for big events such as Easter, Mother's Day, Father's Day, Memorial Day, and the 4th of July. It's the in-between times that are more of a concern as the consumer will likely be more hesitant to spend.
• OXM expects a total comp decline of between -4% and -2% in FY25, with growth in its Lilly Pulitzer and Emerging Brands, partially offset by decreases in Tommy Bahama and Johnny Was. By distribution channel, OXM expects relatively flat sales in both the brick-and-mortar and wholesale channels and it expects e-commerce sales to decrease in the low-single-digit range.
• Something that stood out to us on the call was OXM saying, despite difficult times, it plans to protect the integrity of its brands for the long term. With OXM's brands being priced on the higher end of the apparel spectrum, we read this as OXM deciding it will not lower prices to boost near term results. This could be a risky strategy given the state of the consumer, but it sounds like OXM is focusing on the long term.

Oxford has now posted back-to-back rough earnings/guidance results. While the holiday results were good, OXM's guidance was quite disappointing. We think investors were bracing for some tough guidance given OXM's status of being a higher price point apparel retailer. However, this guidance was surprisingly weak and is resetting investor expectations for this year.

Our first thought was whether OXM's dividend might be at risk given its troubles and given its lofty 4.6% yield. However, OXM just increased it on Monday, knowing full well what its guidance was going to be. So it looks safe for now, but we think it could be at risk. OXM has been in a downtrend for the past year, but we would be hesitant about buying down here given the risk for more downside guidance.