Oxford Industries, Inc.

Greetings and welcome to the Oxford Industries Inc. Fourth Quarter Fiscal 2025 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. It is now my pleasure to introduce your host, Brian Smith of Oxford Industries. 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'll be discussing certain non-GAAP financial measures. In the fourth quarter of fiscal 2025, we changed our measure of profitability from segment operating income to segment EBITDA. You can find a reconciliation of non-GAAP to GAAP financial measures, including segment EBITDA, 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 Grasmeier, 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. I'm glad to be here today to discuss our fourth quarter results, the progress we made in fiscal 2025, and our outlook for fiscal 2026. We were pleased that fourth quarter net sales and adjusted earnings per share helped by late January momentum of our largest brand, Tommy Bahama, landed at the midpoint of our guidance ranges, excluding charges associated with the bankruptcy of Sachs Global that were not known when we last updated our outlook. While we operated against an uneven consumer backdrop during the holiday season, With pressured traffic and conversion trends across much of our portfolio and a highly promotional marketplace, the actions we took throughout the year to strengthen our business helped deliver improving trends late in the fourth quarter. The holiday quarter unfolded broadly in line with the pressures we described last quarter, particularly in categories and assortments most affected by tariff-related sourcing decisions and a highly promotional market. Despite the challenges of higher tariff costs in a competitive environment, our efforts to strengthen the supply chain and diversify sourcing helped us protect strong gross margins and maintain healthy inventory levels. Importantly, absent the impact of higher tariff costs, gross margin would have increased versus the prior year. As fiscal 2025 concluded, we were encouraged by the improvement we saw as we exited the holiday season and entered our important resort in early spring periods. Comparable sales led by mid-single-digit positive comps at Tommy Bahama improved and turned positive for the total company in late January. In the first quarter of fiscal 2026 to date, comps at Tommy Bahama have remained mid-single digit positive, while comps for the total company have remained modestly positive. At Lilly Pulitzer, first quarter comps have run below our plan, which we believe is largely attributable to colder weather along the eastern seaboard, including Florida and the southeast, the brand's most important markets. At Johnny Was, while comps remain negative, the business is performing in line with our expectations and improving through the quarter as our marketing and merchandising effectiveness actions begin to take hold. Quarter to date, business in the emerging brands group is quite strong, with comps well into double digits. We are especially encouraged that performance improved as we moved into resort in early spring when our product offerings were better aligned with customer demand compared with our holiday assortments. We view that improvement as particularly meaningful because these are seasons when our brands are especially well positioned given their connection to warm weather lifestyles and the occasions that matter most to our customers. While the environment remains uncertain, these trends reinforce our confidence that the actions we have taken are gaining traction. We also made meaningful progress in fiscal 2025 to strengthen our operational foundation. Shortly after year end, we completed construction of our new state-of-the-art distribution center in Lyons, and began receiving initial inventory shipments. Lions represents the most significant infrastructure investment Oxford has made in many years, and we are proud of the teams who brought it to this point. As we indicated previously, we do not expect meaningful near-term financial benefit during the early stages of the ramp, but reaching this milestone is an important step in strengthening our long-term operating platform. In addition to completing lines, we continue to invest in technology data and analytics and artificial intelligence, while also advancing our strategic sourcing initiatives to further diversify our sourcing profile. Early in fiscal 2025, approximately 40% of our apparel and related products were expected to be sourced from producers located in China. Through the actions we took during the year, that figure declined to slightly less than 30% of our product purchases in fiscal 2025, and our annualized run rate entering fiscal 2026 has been reduced to approximately 15%. Together, these actions have increased our flexibility and better positioned us to navigate continued uncertainty in the marketplace. Turning to fiscal 2026, our outlook assumes that we build on the encouraging momentum we have seen early in the first quarter, particularly at Tommy Bahama. While the tariff situation remains fluid and we face meaningful tariff pressure in Q1 that we did not incur last year, We believe the actions we have taken to diversify sourcing and improve execution across the business will help limit the impact on earnings as we move through fiscal 2026 and allow us to leverage low single-digit sale growth into meaningful earnings improvement. Scott will provide more detail on the factors shaping our outlook, but our priorities are sustain momentum, improve profitability, and continue strengthening our brands for the long term. Stepping back, our operational priorities remain consistent and straightforward regardless of the macro environment, serving our customer, protecting the integrity of our lifestyle brands, and generating cash so we can reinvest thoughtfully in the business, maintain a strong balance sheet, and create long-term shareholder value. In an uncertain consumer environment, success comes from controlling what we can control and staying focused on execution. Each of our brands have specific priorities for fiscal 2026 tailored to its opportunities, but they share a common thread, a focus on what makes each brand special, the product, the storytelling, and the experiences that keep customers engaged. At Tommy Bahama, our top priority in fiscal 2026 is to build on the momentum the brand has generated with comps in the mid single-digit range in the first quarter to date. We believe that momentum reflects the work the team has done to improve assortment balance, strengthen key in-stock programs, and better align product offerings with customer demand. In fiscal 2026, we are focused on sharpening merchandising, elevating brand storytelling, improving hospitality performance, and evolving our marketing approach to build demand, deepen retention, and reach new audiences. We believe that combination positions Tommy Bahama to deliver improved profitable growth while reinforcing its position as a leading premium lifestyle brand. At Lilly Pulitzer, we are focused on a set of strategic levers designed to unlock more sustainable profitability while positioning the brand for long-term growth. We see meaningful opportunities to sharpen our assortment strategy, improve pricing architecture and allocation effectiveness, strengthen our connection with the core customer through more personalized storytelling, and optimize Lilly's distribution and channel mix to in ways that support both growth and brand awareness. At Johnny Was, our priority remains executing the brand revitalization plan we've been building. That begins with product, as we work to bring greater cohesion to the design process, refine assortments, and create a more seamless commercial model across retail, e-commerce, and wholesale. At the same time, we remain focused on the merchandising discipline, go-to-market consistency, and marketing effectiveness needed to improve execution and stabilize performance over time. We believe these actions, along with the leadership changes we announced in the third quarter, will strengthen the foundation of the business and better position the brand for the future and result in a meaningfully improved EBITDA for the year. Within our emerging brands group, our focus in fiscal 2026 is on accelerating brand heat, expanding distribution in a disciplined way, and continuing to leverage our shared operating platform to drive profitable growth. This group continued to provide encouraging growth and energy in fiscal 2025, and we believe there is meaningful opportunity to build on that momentum through stronger storytelling, better merchandising tools, and more effective allocation across channels. Across our portfolio, we are taking a disciplined, phased approach to developing our data and AI capabilities, initially focused on areas where we see the clearest near-term return on investment, including marketing and e-commerce use cases, enterprise productivity tools, and selected IT applications such as developer productivity. We are starting with practical use cases while continuing to strengthen the data foundation needed to support more advanced capabilities over time. As always, I want to express my deep appreciation for our teams across the enterprise. Their resilience, creativity, and focus on our customers are the foundation of everything we do. With that, I'll turn the call over to Scott for more detailed commentary on our financial performance and outlook.