Oxford Industries, Inc.

Greetings and welcome to the Oxford Industry's third quarter fiscal 2024 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Smith. 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 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 statement. Important factors that could cause actual results of operations or a 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 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 I'd like to turn the call over to Tom Chubb.

Good afternoon, and thank you for joining us. We are excited to be in the midst of a holiday season where the consumer appears to be regaining confidence and is more willing to make discretionary purchases. I'm going to start with a summary of the third quarter then move to our expectations and plans for the fourth quarter, and finally give you a bit of a sneak preview on our plans for 2025. But before jumping into the results of the third quarter, I want to acknowledge the multiple headwinds faced by our brands in the third quarter, including the conclusion of the most intense election cycle in recent memory and the impact of two major hurricanes that devastated parts of the southeastern United States. You will recall that during last quarter's call, we anticipated a relatively soft third quarter, primarily due to macro factors and set our guidance accordingly. We were on track to finish within the forecast, but then the impact of the two hurricanes pushed us below the bottom of the range for both sales and earnings per share. The election, among other noteworthy world events, was a major distraction for our more mature headline-sensitive consumer over the last several months, culminating with the election early in the fourth quarter. Also during the third quarter, Hurricanes Helene and Milton impacted the southeastern United States within only a few weeks of each other. The southeastern United States is our most important and significant region, with Florida alone representing approximately one-third of our direct-to-consumer business. All of these factors impacted our business during the quarter and were exacerbated by a consumer that already felt pinched by the cumulative effects of several years of high inflation. We should also point out that we own a portfolio of premium brands that sell primarily at full price with very limited exposure to the off-price and outlet channels. These value-oriented channels have been thriving as costless consumers seek special offers and clearance pricing. We believe our full-price premium strategy has been and will be a long-term competitive strength, but in the current environment, it is a headwind to our top line while acting as a tailwind for others in our states. Scott will provide more details in his section, but we ended the quarter with sales of $308 million and adjusted net loss per share of 11 cents for the quarter, coming in below our guidance range. We estimate that as a result of the hurricanes, we lost at least $4 million of sales. We also incurred significant incremental expenses for cleanup efforts and assistance to our employees in need, resulting in a cumulative 14-cent negative per share impact from the hurricanes. I am so proud and grateful for the generosity of our associates across the enterprise who pitched in in so many ways to help the people in the communities that we serve and operate to recover from the devastation. This includes not only donations of money, but of time and effort to collect and provide the goods and relief that was needed most. The resiliency of our people in Florida, Georgia, and the Carolinas and the generosity of our people throughout the country are among the characteristics that make Oxford such a great company. Moving to our results, the decline in sales reflects the continuation of the negative comp store sales trends that we experienced in the first half of the year, continuing throughout most of the third quarter. While there was some choppiness, the third quarter looked slightly worse than the first half of this year. Continuing the trend from the first half of this year, our results in the third quarter were driven by reduced conversions while traffic has remained healthy, indicating that our consumer is interested in our brands but continues to be cautious when making purchase decisions. Consumers also continued to react strongly to fashion and new and differentiated products, while interest in core styles is more muted. We believe that we have corrected some of the missteps that we have previously discussed and are prepared well with fresh and new products for the holiday and upcoming resort travel season. Our consumer also responded to our value offering in the quarter with a higher proportion of sales during the quarter occurring during promotional events and at our outlet stores than in last year's third quarter. Despite short-term headwinds affecting our results, we have not backed off on investing in the business with new stores, Marlin bars, our new distribution center and technology, among other strategic investments, all of which are adding expense at a time when top line is weak hurting bottom line in the near term, but continuing to strengthen us for the long term. During the quarter, we opened 12 net new retail locations. That brings our total store count to 342, compared to 309 at the end of the third quarter fiscal 2023. Our balance sheet and liquidity have remained strong allowing us to continue investing in the future of our business, including our store pipeline and Lions Georgia Distribution Center project, which Scott will detail shortly, and cash returned directly to shareholders through our quarterly dividend. Moving on to the fourth quarter, November started on a similar trajectory to the third quarter, but once we got past the election, business began to improve and we had a strong finish to November with a very solid Thanksgiving weekend. As you're aware, this year's calendar provides the shortest possible selling period between Thanksgiving and Christmas compared to the longest possible period in the prior year. This obviously means that we have to get our holiday business done in a more compressed time period. Accordingly, we are delighted that we have what we believe are outstanding products and marketing plans for holiday and are encouraged by the results we are seeing. We have been thrilled by the performance of Tommy Bahama's Indigo Palms Denim Collection, particularly on the men's side, the new men's Luxe Sweater Offering, and the new Tommy Bahama Palm Voyage Women's Collection. Indigo Palms was a bright spot even during the tough third quarter and performed extremely well during November. Denim is a category that works in all geographies year-round, but is especially important in cooler geographies and during the cooler times of year. We are excited about the impact Indigo Palms is currently having and the potential it has to help us grow our business in the years to come. We are equally excited about our new Luxe sweater offering this holiday season. Giftable sweaters are always a big business driver during the fourth quarter. For the last several years, our go-to sweater has been the Tobago Half Zip Pullover at $118. This year, we are also having tremendous success with the new Marlin Luxe Cotton Silk Cashmere Blend Half Zip at $178 and the Sunbreak Half Zip at $158. The Luxe sweaters are not only selling very well, but they are also helping push gross margins and average order value higher. On the women's side, Convoyage, which are elevated travel-ready separates, has performed very well in our own channels and also in our key wholesale accounts. We love to see this because on the wholesale floor, we are going head-to-head with our competitors, and we are winning. We have also seen great success in Lilly with whimsical new products like the Ellery sweater and seemingly anything with bows or sequins on it. The takeaway from all of this is that when we deliver innovation, newness and excitement, our customers respond favorably. The reaction to our products and an apparent change in the trajectory of consumer sentiment is driving improving comp store sales post-election that have begun to reverse the disappointing trends experienced the last several quarters. Looking ahead to fiscal 2025, our number one priority is stabilizing and expanding our operating margins. As we plan for the year, we are encouraged by recent sales trends in our business. We are also encouraged by our forward wholesale bookings. While there's plenty of reason to be optimistic, we're going to be cautious about getting overly exuberant with our comp assumptions for the year and will be focused on improving operating margin through better expense control and leverage. We look forward to outlining our fiscal 25 plans for you in more detail in March. While we are disappointed in our third quarter results, we are confident in the product our teams have developed and our business to date in the fourth quarter and plans for the remainder of the holiday and resort season. We are very grateful to our team and wish all of them and all of you a very happy holiday season. I'll now hand the call over to Scott who will provide more details on the quarter and our outlook for the balance of the year.