Oxford Industries, Inc.

Greetings. Welcome to the Oxford Industries Inc. First Quarter Fiscal 2023 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 and telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jevin Strasser of Investor Relations. 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 financial condition to differ are discussed in our press release issued earlier today and in documents filed by us at 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 OxfordDean.com. Now I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO, and Scott Grassmeyer, CFO and COO. 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. We appreciate your interest in our company. We are pleased to be reporting a solid first quarter of fiscal 2023, which happens to be our eighth consecutive record quarter. Sales of $420 million were up 19% over the prior year, with 14% of the growth coming from the addition of Johnny Wise, which we acquired last year, and 5% organic growth in our other five brands. Our adjusted EPS was $3.78 for the quarter compared to $3.50 for the first quarter of last year. Our trailing 12-month active customer count at quarter end was 2.6 million, which increased 9% compared to the end of the first quarter last year, while our new customer ad rate on a trailing 12-month basis was 6% higher than it was at the end of the first quarter in fiscal 2022. And the average annual spend with our consumers is more than $400. We believe these results are directly attributable to our North Star pillars, our objective, our strategy, our purpose, and our focus. Our formula for delivering on these pillars and our execution of that formula. As always, our objective is to maximize long-term shareholder value. Our strategy is to own a portfolio of lifestyle brands that can deliver sustained profitable growth. Our purpose is to evoke happiness, and our focus is to generate cash to fund organic growth in our brands, acquisition opportunities, and the return of capital to our shareholders, all while maintaining our rock-solid balance sheet. Within each of our aspirational happy lifestyle brands, the formula for delivering the sustained profitable growth that drives long-term shareholder value is first to focus and be crystal clear on what the brand stands for, and then deliver on that brand promise through terrific products, a balanced mix of retail, e-commerce, and the wholesale, designed to serve the customer where and how she wants to be served, and effective and efficient in attaining, retaining, and developing customers through a variety of communication channels. Nowhere did we execute on this formula better than in our Tommy Bahama brand, where growth in all channels of distribution delivered top-line growth of 5%. A highlight of growth was that while both men's and women's grew, our women's business and our direct-to-consumer channels grew at a faster rate than our men's business, and for the quarter, comprised 42% of the total as compared to 40% of the total in the first quarter of fiscal 2022. Developing our women's business in Tommy Bahama remains both a priority and a huge opportunity for us, given that the women's market is roughly double the size of the men's market. A clear indication of the strength of our Tommy Bahama brand is that we were able to expand gross margin during the quarter to 66.1%, from 64.6% last year. We continue to invest in the business in people, marketing, IT, stores and restaurants, and as a result, experience some modest SG&AD leveraging. Nonetheless, our strong gross margin performance and sales growth allowed us to expand operating margin to 23.2% for the quarter compared to 23.1% last year. All in all, it was a very good quarter for Tommy Bahama, especially given the unseasonably cold, wet weather on the West Coast, which includes some of the brand's largest markets and the numerous macro headwinds pressuring consumer spending. We could not be more bullish about the long-term prospects for the brand and continue to invest in its future, including plans to open three Marlin bars, one of which is in Palm Beach Gardens, scheduled to open later this month, and our first Tommy Bahama Resort during late 2023. And our second largest brand, Lilly Pulitzer, we also had a good quarter. with sales growing 6% from $92 million last year to $97 million this year. Our direct-to-consumer channels delivered the growth while we had a modest decline in the wholesale channel, owing, we believe, to the cautiousness of many retailers in the marketplace. We experienced some SG&A deleveraging in Lilly Pulitzer as we continue to invest in the brand, but we were able to expand gross margin during the quarter to 70.1% from 69% last year. The sales growth combined with the expanded gross margin allowed us to deliver a very strong 25.2% operating margin for the quarter. One of the keys to our success in Willie Pulitzer during the quarter was a change in our customer call-to-action strategy as compared to the first quarter of last year. In April 2022, we had one of our well-known Lilly-Pellitzer flash sales comprised of Resort 2021 merchandise marked down in the 60 to 70% off range. This year, we did not hold a flash event and replaced that instead with a 30% off current merchandise sale online and in-store in April. The results were spectacular as we recorded sales of about $25 million in a three-day period at a very attractive gross margin. As we move forward through the year, we will continue to evaluate the most effective ways to call our customer to action and drive continued top-line growth in a brand-appropriate manner, all while generating very healthy margins at both the gross margin and operating margin level. Johnny Woz is our newest brand, having been added to the portfolio during the third quarter of 2022, and we are delighted to have it as part of our company. Our focus this year The first full year that Johnny was as part of the Oxford portfolio is on completing its integration onto our powerful platform and enhancing the foundation for sustained profitable growth in the brand. We have completed most of the earlier stage parts of this project and are now focused primarily on leveraging our best-in-class existing Lilly Pelletser e-commerce platform to improve the already robust Johnny Was eCommerce business, which generates about 40% of the brand sales. To be clear, Johnny Was will continue to maintain its own website with its distinctive look and feel while utilizing the technical functionality and features we have developed in the Lilly Pulitzer eCom platform. Our three smaller brands, Southern Tide, the Beaufort Bonnet Company, and Duckhead, comprise our emerging brands group. We were pleased to post 7% year-over-year sales growth in the emerging brands group. Profitability during the quarter was suppressed by our continued investment in people, marketing, IT, and stores, and by the financial impact of the over-inventory position that we discussed on last quarter's conference call. We have our arms completely around the inventory situation and are working through it methodically, but it will be a drag on the margin of the emerging brands group during this year. The first quarter of fiscal 2023 was a very good quarter, but it is worth noting that it started in February stronger than it finished in April. Starting in late March, the consumer became noticeably more cautious in her spending. Our traffic trends remain positive, signifying increasing affinity for and interest in our brands, but conversion rates have been lower than they were last year. We believe this is the result of consumers being more cautious in how they spend their discretionary dollars, which in turn has led to a much more promotional marketplace than it has been in recent years at this time of year. While we are encouraged that our May sales trend was sequentially better than April, and early June business appears to be incrementally stronger, our performance second quarter to date is tracking below where we thought it would be, when we provided our initial full year outlook in March. Based on this, along with what we now expect to be a highly promotional environment for the next few quarters, we believe it is appropriate to moderate our forecast for the year, which Scott will detail in just a moment. While we are moderating our forecast for the year, we remain extremely bullish on our six powerful aspirational happy brands and on our ability to capitalize on the strength of our brands to deliver the sustained profitable growth that drives long-term shareholder value. While year-over-year growth will be a bit lower than previously expected, it will still be a solid year in absolute terms and cash flow, as Scott will discuss, should be exceptionally strong. Accordingly, we will continue to invest in people, marketing, IT, fulfillment capabilities, stores, and food and beverage locations to set ourselves up for continued future growth in 2024 and beyond. We believe our North Shore pillars, our formula for delivering on those pillars, our execution of that formula, and our brand leaders, an incredible team of people, will allow us in future years to grow total portfolio sales mid to upper single digits annually while maintaining a 15% or greater operating margin. I will now turn the call over to Scott for more details on the quarter and the forecast for the balance of the year. Scott?