Oxford Swings To Loss, Details Weak Outlook; Shares Down 5%

(RTTNews) - Apparel maker Oxford Industries Inc. (OXM), Wednesday reported a swing to loss in the third quarter, hurt by lower gross margins and amortization expenses. Revenues for the quarter came in short of expectations, while adjusted earnings missed Wall Street estimates by a penny.

Oxford detailed a weak earnings outlook for the fourth quarter and lowered its guidance for the full year. Shares of Oxford slipped about five percent in the after-hours trade on the New York Stock Exchange.

Atlanta, Georgia-based Oxford Industries reported a third-quarter loss of $74 thousand or $0.00 per share compared to a profit of $0.9 million or $0.05 per share last year.

Earnings for the quarter included a charge of $0.03 per share related to amortization of Canadian intangible assets.

Excluding items, adjusted earnings for the quarter were $0.01 per share compared to $0.10 per share a year ago. Analysts polled by Thomson Reuters estimated earnings of $0.02 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter grew 11 percent to at $219.5 million from $197.5 million last year. Analysts polled by Thomson Reuters estimated revenues of $222.85 million for the quarter.

Sales at the company's Tommy Bahama segment increased 10 percent to $125.4 million with same-store sales up 2 percent. Sales at Lilly Pulitzer jumped 18 percent to $36.0 million, while Lanier Clothes increased to $35.9 million from $30.1 million last year. Ben Sherman sales dropped marginally to $18.3 million from $18.6 million last year.

Gross margin dropped to 51.5 percent from 53.1 percent primarily due to a change in sales mix. Selling, general and administrative costs, as a percent of sales, dropped to 52.4 percent from 52.9 percent last year.

"We are pleased to have delivered a solid increase to our top line and to have met our earnings expectations in the difficult environment we faced in the third quarter. Looking forward, although the retail environment has continued to be heavily promotional and traffic remains soft, we believe we are successfully navigating the holiday season and expect to report solid results," said CEO Thomas Chubb.

Looking forward to the fourth quarter, the company expects adjusted earnings of $0.96 to $1.06 per share. Analysts currently expect earnings of $1.18 per share for the quarter.

For the full year 2014, the company now expects adjusted earnings of $2.85 to $2.95 per share on sales of $990 million to $1 billion. Analysts currently expect earnings of $3.09 per share on revenues of $1 billion for the year. Earlier, the company expected earnings of $3.00 to $3.15 per share on sales of about $1 billion.

The company also declared a dividend of $0.21 per share, payable on January 30 to shareholders as of January 16.

OXM closed Wednesday's trading at $61.27, down $1.31 or 2.09%, on the NYSE. The stock further dropped $2.77 or 4.52% in after-hours trade.