Bull of the day: Oxford Industries (OXM)

Oxford Industries, Inc. OXM posted record sales in its fiscal third quarter as shoppers rushed to shop for clothing. This Zacks Rank # 1 (Strong Buy) also increased the forecast for fiscal 2021.

Oxford Industries is a retailer that includes the brands Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head.

It also owns e-commerce sites and operates restaurants.

Record third quarter sales and net profits

On December 8, Oxford Industries released its third quarter 2021 tax results and crushed Zacks’ consensus estimate of $ 0.90. Profits hit a record high of $ 1.19 in the third quarter against a consensus of just $ 0.29.

It was the third consecutive win for Oxford Industries.

Net sales jumped 41% to a record $ 248 million, from $ 175 million a year ago and $ 241 million in fiscal 2019, which was before the pandemic.

Full-price direct-to-consumer sales jumped 40% to $ 143 million, with growth for each of its brands from the third quarter of fiscal 2019, which is before the pandemic.

Full-price retail sales increased 13% and full-price e-commerce sales increased 100% from the third quarter of fiscal 2019.

Tommy Bahama’s revenue was $ 148.5 million, compared to $ 127 million in the third quarter of fiscal 2019.

Lilly Pulitzer’s revenue was $ 72.2 million from $ 71.7 million and Southern Tide reached $ 13.2 million, up from $ 9.1 million 2 years ago.

Lilly Pulitzer is one of the hottest brands in the clothing industry and was also in fashion before the pandemic.

Even restaurant sales increased from the third quarter before the 2019 pandemic, with sales jumping 14% to $ 20 million due to big increases in existing locations and the addition of 5 Marlin locations. Bar.

Gross margin increased 62% from 55% in the third quarter of fiscal 2019 as Oxford saw strong full-price sales, a shift in the mix of sales to direct-to-consumer channels at full price and a higher initial gross margin, partially offset by higher transportation costs.

Oxford exited its Lanier Apparel business in the fourth quarter of 2021.

Oxford Industries has raised its forecast for the full year

Given the strength in the third quarter and continued strong demand at full price, Oxford raised its profit outlook for the full year despite continuing supply chain challenges.

It now forecasts net sales of between $ 1.127 billion and $ 1.137 billion, up from $ 1.123 billion in fiscal 2019.

Fiscal 2019 also included a full year of Lanier Apparel sales, which stood at $ 95 million, and are expected to be just $ 25 million in fiscal 2021, as the company has now exited that. activity.

The earnings are now expected to be between $ 7.52 and $ 7.67.

As a result, analysts have been busy raising their earnings estimates for the entire year.

4 estimates were revised upwards last month, bringing fiscal year 2021 to $ 7.63 from $ 6.68. That’s a 521% profit growth as Oxford lost $ 1.81 in fiscal 2020 during the pandemic.

4 estimates were also revised upwards for FY 2022, bringing Zacks’ consensus estimate to $ 7.76 from $ 6.95 during this period. However, this is only 1.6% profit growth.

Oxford stocks are cheap

Over the past year, Oxford shares have risen 51%, well outpacing the S&P 500 which is up 27.5% in the same time frame.

But stocks have gone nowhere in the past 6 months, adding just 2.6% during that time, even though earnings estimates have been upped.

Image source: Zacks Investment Research

Oxford stocks are still cheap, with a forward P / E of just 13.

He is also shareholder friendly and is back to paying a dividend, which is currently earning 1.7%. It also has a share buyback plan, which the board of directors has just increased to $ 150 million.

For those looking for a clothing retailer with hot brands, Oxford is to keep on your shortlist.

Zacks’ top picks for leveraging artificial intelligence

This world-changing technology is expected to generate 100 billion dollars by 2025. From self-driving cars to analyzing consumer data, people are relying on machines more than ever. Now is the time to capitalize on the 4th industrial revolution. Zacks’ Urgent Special Report Reveals 6 AI Picks Investors Need To Know Today.

See 6 artificial intelligence stocks with extreme upside potential >>

Click to get this free report

Oxford Industries, Inc. (OXM): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks investment research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.