Oxford Industries, Inc.

Greetings and welcome to the Oxford Industries and first quarter fiscal 2021 earnings conference call. At this time, all participants are in a listen only mode. The 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 will now turn the conference over to your host and 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 federal securities law. Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statement. Important factors that can 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. Due to the material impact of COVID-19 on our business in fiscal 2020, we will also include comparisons to our fiscal 2019 results. 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 Choe.

Thank you, Anne, and thanks to all of you for joining us this afternoon. We are extremely pleased to be reporting an incredibly strong start to fiscal 2021. We took decisive actions at the start of the pandemic to protect our people, our brands, and our liquidity. This combined with our focus over the past year on delivering happiness to our customers and investing in enhanced digital marketing and store capabilities, as well as in our bars and restaurants, have strengthened our foundation for profitable growth. As consumers have become increasingly more comfortable returning to physical shopping, our overall engagement levels have greatly accelerated. leading to strong momentum across our entire portfolio of brands. Given conditions last year, it is not surprising that we were able to post strong sales gains across all brands and all channels of distribution during the first quarter of fiscal 2021 as compared to the first quarter of fiscal 2020. What's much more impressive about our first quarter 2021 performance is how it compares to the first quarter of 2019. We believe that the comparison to 2019 is much more informative for most purposes than comparing to 2020. Accordingly, during our discussion today, we will focus on the positive traction we have made towards returning to and even exceeding our 2019 levels of performance. First quarter sales came in at $266 million compared to $282 million in fiscal 2019, and versus our guidance range of $220 to $240 million. It is worth noting that 14 of the $16 million sales decrease from the first quarter of fiscal 2019 is due to lower sales in linear apparel, which, as you know, we are in the process of exiting. On an adjusted basis, earnings per share increased to $1.89 compared to earnings of $1.30 in the first quarter of fiscal 2019. Scott will provide more detail in a few minutes, but these results were driven by very strong performance in our e-commerce businesses and outstanding gross margins. Our bar and restaurant business also performed very nicely during the quarter. In our bricks and mortar stores, we generally saw a sequential improvement in traffic and sales in the quarter, with regions in Florida, the southeast, and Texas showing the most strength while the Mid-Atlantic, the Northeast, and the Midwest are recovering at a somewhat slower pace. There is no question that we are benefiting from some pent-up demand so far this spring and summer, and the alignment of our brand's focus on products related to travel, vacation, and social occasions with the consumer's desire to travel and reengage socially. We expect this to continue as more regions of the country begin to normalize. That said, we believe that the results we have seen thus far this year and that we are projecting for the balance of the year also demonstrate the value of staying true to our brands during the challenges that we faced last year. Our commitment to the happy, upbeat, and optimistic messages of our brands and delivering those messages to our consumers through our products and services is paying off handsomely as the world re-engages. In addition, we are seeing positive returns on the investments we have made and continue to make in enhancing our brand's creative content in improving our omnichannel customer service, in continuing to hone our digital marketing capabilities, and in our stores, bars, and restaurants. In our biggest brand, Tommy Bahama, we are anchored in the relaxed island lifestyle. We deliver this lifestyle to our guests through our amazing products, our wonderful stores, and e-commerce website, and very importantly, through our bars and restaurants. By staying true to our live the island life brand message and making the types of investments outlined above, we were able to deliver outstanding first quarter results. Sales overall came close to 2019 levels, driven by healthy gains in e-commerce and restaurants, while stores and the wholesale continue to improve sequentially. Very importantly, increased full price selling and stronger initial IMUs, coupled with excellent expense control, helped contribute to a marked improvement in gross margin, operating margin, and a 36% increase in operating income over first quarter 2019. We are delighted with the margins we achieved for the quarter. Finally, we were pleased to see that while performance in our men's business was strong, our women's business at Tommy Bahama was even stronger. We are honored to have the dedicated cadre of true Tommy Bahama fans that comprise our very loyal customer base. That said, we believe there is room on the island to delight even more customers. Through the investments we are making and the priorities we have established, we are intent on expanding our customer reach while continuing to serve our loyal guests. Staying anchored to its resort chic lifestyle, and as we say, being the sunshine, served Lilly Pulitzer very well during the first quarter. Lilly's product priority for spring 21 was feel good fashion with a focus on happy color and print easy, chic, comfortable pieces, and a resort state of mind. This focus, together with the investments that we have made in enhancing our brand creative and enhancing our store and digital capabilities, paid off in strong first quarter results. We continue to see strong growth from e-commerce while our stores and the wholesale business continue to improve as consumers feel increasingly comfortable engaging in the physical world. In total, first quarter 21 sales exceeded first quarter 2019 sales and operating margin came in at an impressive 27% as compared to 21% in 2019. Our Luxletic and lounge product continued to drive growth, and we saw a healthy rebound in our dress business as her social calendar begins to fill up. At the same time, our golf and tennis collections have also been bright spots, and the consumer is showing strong renewed interest in swim as she thinks about travel and vacation this summer. Our recent results demonstrate that we have the product she wants and our brand message is resonating with her. We look forward to continuing to drive a strong business through the balance of the year. Our smaller brands, Southern Tide, the Beaufort Bonnet Company, and Duckhead also had a great first quarter, all posting meaningful sales gains above first quarter 2019 levels. All three are poised to contribute to our profitability this year. We are very pleased with our first quarter results and are excited about the balance of the year. Scott will provide more details in our guidance momentarily, but I will say that we do expect to have a strong year, particularly in terms of profitability. Our enthusiasm is based on both external factors as well as the internal priorities that we have been focusing on for the last year. I'll start with the external factors. As the summer progresses, we expect some of the regions that have been slower to recover for us, namely the Mid-Atlantic, the Northeast, and the Midwest to pick up momentum. We also believe that consumers will continue to have a high degree of interest in travel, vacation, and social events through the year. Finally, after a long pandemic, Consumers appreciate the highly differentiated, happy, colorful, upbeat nature of our brands and products more than ever. All of these external factors portend a strong 2021. We are also excited about the benefits we are seeing as the result of our internal priorities. There are many, but I will highlight five here. First, in our brand message, we are taking care to ensure that our messages are both true to our core brand values and relevant for today's consumer and marketplace. Second, we have realigned our creative teams and are enhancing our creative content to make sure it is delivering the full impact of our powerful brand messages. Third, as part of our effort to enhance our digital capabilities, We are improving our ability to capture and analyze customer data in a way that respects her privacy, but also puts us in position to serve her in a better and more personalized way. It also helps us identify and reach new audiences of potential customers. Fourth, we are honing our skills in measuring the effectiveness of and optimizing the various channels Many of them digital media that we use to reach both existing and potential new customers. Fifth, we continue to enhance our store order fulfillment capabilities. This allows us to use inventory located anywhere in our footprint to satisfy demand from anywhere. The implications for inventory efficiency, sell-through rates, and ultimately gross margin are huge. We believe the combination of the positive external factors as well as the benefits from our work on our internal priorities gives us ample reason to be bullish on 2021. In closing, please allow me to express my sincere appreciation for our wonderful and loyal customers, and for our world-class employees, an incredible group of women and men who have worked harder than ever over the last year and a half to deliver happiness to those customers. Thank you for all you do. And now I will turn the call over to Scott for additional detail on our results and our outlook for the balance of the year.