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Bear of the Day: Oxford Industries (OXM)

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Oxford Industries, Inc. (OXM - Free Report) is still paying its dividend despite seeing its stores shut during the coronavirus crisis. This Zacks Rank #5 (Strong Sell) had its earnings estimates slashed after not providing 2020 guidance.

Oxford Industries is a specialty retailer which operates the Tommy Bahama, Lily Pulitzer and Southern Tide retail stores and e-commerce web sites.

A Miss on Earnings in the Fiscal Fourth Quarter 2019

On Mar 26, Oxford Industries reported its fourth quarter and full year fiscal 2019 results. It missed on the Zacks Consensus Estimate by $0.02, reporting $1.09 versus the consensus of $1.11.

Fourth quarter comparable sales, a key retail metric, rose 4%, as both Tommy Bahama and Lily Pulitzer had positive comps in the holiday quarter.

For the full year, comparable sales also rose 4% as online sales rose 10% and now make up 23% of total revenue.

Oxford also reduced the amount of wholesale business it does with the struggling department stores, which helped.

No Guidance Due to the Coronavirus Crisis

Oxford declined to provide fiscal 2020 guidance in the earnings update, which isn't a surprise as few companies are doing so at this time.

It has temporarily closed all of its North American retail stores and restaurants and has furloughed employees.

Additionally, to enhance its cash position, it drew down $200 million of its $325 million asset-based revolving credit facility.

The company also had $52.5 million in cash as of the end of the fourth quarter, which was Feb 1, 2020.

Cutting the Dividend

Oxford also announced it was cutting its dividend to $0.25 per quarter from the previous level of $0.37.

It has been paying a dividend every quarter since 1960.

This dividend, with the shares having tumbled, is still yielding 2.7%.

Earnings Estimates Slashed

Not surprising, given the state of the global economy during the crisis, the analysts moved to cut their fiscal 2020 Zacks Consensus Estimates.

3 analysts cut in the last week, pushing the Zacks Consensus down to $2.57 from $4.53.

That's a decline of 40.5% from fiscal 2019 when the company made $4.32.

Analysts do see a rebound once we're on the other side of the virus and stores are able to open again.

Fiscal 2021 earnings are expected to rise 54.3% to $3.97.

Other retailers which reported earnings in March, and didn't provide guidance, also saw their earnings estimates cut including G-III Apparel Group (GIII - Free Report) .

G-III Apparel is also a Zacks Rank #5 (Strong Sell).

Shares Plunge in Coronavirus Bear Market

Like many other small cap stocks, Oxford Industries' shares have plunged in 2020, falling 56% year-to-date.

That's worse than the S&P 500, which is down 23.5%.

But Oxford has the strong Lily Pulitzer brand that will still be strong when the pandemic ends.

Investors interested in the retailers in 2020 should stick with those with the strongest brands and balance sheets.

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