Oxford Industries, Inc.

Greetings, and welcome to Oxford Industries' first quarter fiscal 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I would now like to turn the conference over to your hosts, Ann Shoemaker, Treasurer. Thank you. You may begin.

Thank you, and good afternoon. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K. We undertake no duty to update any forward-looking statements. During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of non-GAAP to GAAP financial measures in our press release issued earlier today which is posted under the Investor Relations tab of our website at OxfordInc.com. And now I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO, and Scott Grassmeyer, CFO. Thank you for your attention, and now I'd like to turn the call over to Tom Chubb.

Good afternoon, and thank you for joining us. Before providing you with an update on our response to COVID-19 and our first quarter financial and operating results, I'm going to spend a few minutes on recent events. What has happened across the country over the last few weeks has brought into sharp focus that we, as a country, are still falling well short of our national aspiration of racial equality and equal economic opportunity for all. It is time for us all to listen, learn, and act. We can feel heartbroken, fearful, or uncomfortable, but we must get busy and take action to change things for the future. With this in mind, Oxford is making a $1 million commitment of additional support over the next four years to help our local communities address economic and racial inequality through education. Every child, regardless of race or economic circumstance, deserves the chance to learn and be successful. The likelihood of success increases exponentially when a child has access to a quality education. All too frequently, particularly in economically disadvantaged communities and communities of color, that access does not exist. Our commitment builds on Oxford's long history of supporting education programs that improve access to quality education for economically disadvantaged youth in predominantly African American communities. Now let's talk about what's going on in our business. It goes without saying that this year is a very unusual year. In any other year, our key objective is always delivering the sustained profitable growth that drives long-term shareholder value. With the shutdown of the economy in response to the COVID pandemic, this is a year that, given the nature of our business, makes it almost impossible for us to achieve this objective. That said, We believe this situation is temporary and that by focusing on our people, our brands, and our liquidity, we will emerge from this year positioned well to thrive in the new and very different post-COVID marketplace. With respect to these three objectives, people, brands, and liquidity, I am very pleased with what we have accomplished since March and the track we are on for the rest of the year. With respect to people, the COVID pandemic and the resulting shutdown have been incredibly disruptive for people at both a personal and professional level. To navigate through this difficult situation, we have had to take a number of painful but necessary actions that have added to the disruption in people's lives. These have included layoffs, furloughs, pay reductions, and other actions, including work from home, that have added to the challenges that people face. We do not take these actions lightly at all, and I am deeply appreciative of how our teams have rallied. Their commitment, resourcefulness, and focus has far exceeded what I could have possibly hoped for. As we are beginning to emerge from the shutdown or in the early stages of recovery, I believe our team is stronger than ever and better suited to take on the new challenges facing our industry. Secondly, with our bricks and mortar operations substantially shut down for several months, and only now slowly beginning to reopen, we have done a terrific job of protecting and preserving the integrity of our brands and our relationship with our customers to ensure we remain in a strong position for the post-COVID consumer marketplace. We took actions to help us mitigate an over-inventory position, which would undoubtedly require us to engage in heavy discounting and promotional activity that could damage the integrity of our brands. We reduced and canceled existing orders, we reduced the amount of our previously planned forward orders, and we delayed and re-merchandised inventory that was already in the pipeline. Through our digital marketing and e-commerce capabilities, we have also done a great job of keeping our customers engaged with our brands in ways that are relevant during this unusual time. The key takeaway is that some of the most effective messages were those where we really leaned into our brands and their messages of optimism and happiness. Customers really look to our brands as an escape from some of the realities of living in a quarantined, work-from-home, homeschooled world. Re-emergence from the shutdown has also accelerated our efforts to become truly omnichannel. We believe that all of these actions put our brands in great shape for the future that lies ahead. Finally, and very importantly, we have managed our cash outflows very carefully and, as a result, have preserved the strong liquidity we had going into the shutdown. We are confident that we will finish the year with more than adequate liquidity to grow and thrive going forward. Some of the key steps that we've taken have included painful but necessary reductions in employment expense, including the elimination of cash bonuses and reductions in executive and other employee salaries, reducing the forward inventory commitments, slowing down capital expenditures, negotiating equitable rent arrangements with our landlords, and a reduction to our dividend and the Board of Directors' cash compensation. Many of these actions are ongoing, including our discussions with landlords as we work to resolve the current situation. To reiterate, our key focus this year is making sure our people, brands, and liquidity are in an excellent position for the post-shutdown consumer marketplace. I'm very proud of what we've accomplished and believe we are on the right track towards achieving these critical objectives over the remainder of the year. I'll now turn the call over to Scott for more details.