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Bull of the Day: Oxford Industries (OXM)

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Oxford Industries, Inc. (OXM - Free Report) is one of the rare retailers bucking the negative sentiment. This Zacks Rank #1 (Strong Buy) has raised guidance three times this year.

Oxford Industries operates several retail and lifestyle brands including Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head. It owns retail stores, sells wholesale and on its own e-commerce sites and operates Tommy Bahama restaurants.

Acquiring Johnny Was and Raising Guidance Again

On Sep 19, Oxford announced it was acquiring California retailer Johnny Was for $270 million. Johnny Was is a boho vintage retailer which has 61 stores in 24 states.

Oxford expects the acquisition to be accretive to earnings this fiscal year. As a result it has raised full year fiscal 2022 guidance for the second time in the month of September and the third time this year.

But it's not just the acquisition that drove the guidance increase. Oxford estimates that about 2/3rds of the EPS guidance increase was driven by the anticipated Johnny Was results. But the remainder 1/3 was due to strong quarter-to-date performance in their full-price direct-to-consumer channels and a successful Lilly Pulitzer e-commerce flash sale.

The company now expects full year earnings in the range of $10.25 to $10.60.

Analysts Raise Earnings Estimates Again

As a result of the higher earnings guidance, the analysts also had to raise estimates.

4 estimates are higher in the last 30 days, pushing up the Fiscal 2022 Zacks Consensus Estimate to $10.50 from $9.87. That is at the high end of the company's new guidance range.

That's earnings growth of 31.4% over last year, when the company made $7.99.

Analysts are bullish on next year too, with another 11.2% earnings growth expected, or $11.68.

All Brands Humming

On Sep 1, 2022, Oxford reported its fiscal second quarter results and saw another earnings beat. Earnings were $3.61 versus the Zacks Consensus of $3.45. It was the fourth earnings beat in a row.

It was also another record quarter, after a record first quarter.

Tommy Bahama, its flagship brand, saw sales up 17% year-over-year. Lilly Pulitzer was up 2%. The Tommy restaurants also had a strong quarter, with sales up 6% to $27 million.

Full-price direct to consumer comp sales were up 14% from the second quarter of last year.

Full-price retail sales were also up 14% to $135 million.

With many retailers having to be promotional to move product, these full-price sales results are impressive.

Shares are Cheap

Oxford Industries shares have fallen in 2022 like most stocks. But they're down just 7.8% for the year.

Over the last 2 years, they've surged 144.8%.

Zacks Investment Research
Image Source: Zacks Investment Research

They're still cheap, with a forward P/E of just 8.6.

And Oxford is shareholder friendly. It pays a dividend, currently yielding 2.4%.

If you are looking for a top retailer which is actually raising guidance in this challenging environment, then Oxford is one you should keep on your short list.


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