Oxford Industries (NYSE: OXM) reported Q2 EPS of ($0.38), $0.23 better than the analyst estimate of ($0.61). Revenue for the quarter came in at $192 million versus the consensus estimate of $170.57 million.

Thomas C. Chubb III, Chairman and CEO, commented, “As the effects of the COVID-19 pandemic continue to impact our business, we remain focused on our top priorities – protecting our people and customers, supporting our brands, and preserving liquidity, while never losing sight of our goal of delivering long-term value to our shareholders. With this as a backdrop, we are encouraged by our overall second quarter performance, which reflects the strength of our brands and the resilience of our people in these unprecedented times.”

“During the second quarter we leaned heavily into our advanced digital capabilities to capitalize on the accelerated shift to online spending,” continued Mr. Chubb. “All of our brands positively contributed to the 52% year-over-year increase in e-commerce sales, with Lilly Pulitzer as the standout, up an extraordinary 142%. The Lilly Pulitzer product collection this summer was very strong, and in many ways offered exactly what the customer was looking for – fun, happy, easy to wear apparel. The collection was highlighted by very effective digital marketing, to which we shifted more resources in the quarter. A non-comp flash sale in June also added to the success of Lilly’s second quarter results. Historically, the Lilly website only offers sale items five days a year. To ensure excellent inventory control, an additional two day flash sale was held in the second quarter which generated $15 million of sales at a solid 40% margin.”

Mr. Chubb continued, “In contrast, consumer traffic in brick and mortar locations remained very challenging in the quarter, driving meaningful revenue decreases in our stores and restaurants. In addition to operating under restricted hours and limited capacity, important markets which rely heavily on fly-in tourists, such as Hawaii, Las Vegas and New York City, were pressured even further. Not surprisingly, our wholesale channel of distribution was also challenged, and wholesale sales in the quarter were less than half of what they were a year ago.”

“Given the conditions we’ve been operating under, I am very pleased with our ability to keep our inventory levels in check and reduce expenses for the quarter by $28 million compared to last year. These actions helped fuel strong cash flow from operations and ensure we ended the second quarter in an excellent liquidity position.”

Mr. Chubb concluded, “As we move into the back half of the year, we will continue to face the challenges and uncertainties created by the pandemic. In the third quarter, which is typically our smallest quarter each year, we are expecting the year-over-year decline in bricks and mortar traffic to be slightly less pronounced than it was in the second quarter. In addition, our Lilly Pulitzer flash sale, which has been a bright spot in the third quarter, is expected to be significantly smaller as some of the inventory that would have been available for the September event was pulled forward into the non-comp event in June. As a result of the reduced traffic, a smaller flash sale and continued softness at wholesale, we expect revenue to decline year over year at a rate similar to the second quarter. For the fourth quarter, while we don’t anticipate a significant rebound in brick and mortar traffic, we believe we will move closer to break-even and expect to return to profitability in fiscal 2021. I am confident that our amazing and talented people, our brands that speak to the happy times consumers long for, and the strength of our balance sheet will ensure our long-term success.”

Fiscal 2020 Outlook

Due to the significant uncertainty created by the COVID-19 pandemic, the Company is not providing a financial outlook for fiscal 2020.

For earnings history and earnings-related data on Oxford Industries (OXM) click here.