Tommy Bahama Parent Sees Wholesale Retrench
The CEO of Tommy Bahama’s parent company thinks the business will be able to navigate current economic challenges, and its core consumer base “will hold up pretty well” this year.
The comments from Chair and CEO Tom Chubb were made during Atlanta-based Oxford Industries Inc.’s fourth-quarter call with analysts on Thursday, after the company reported growth of its largest brand, Tommy Bahama, and the company-wide business.
Oxford’s portfolio also includes Lilly Pulitzer, Johnny Was, Southern Tide, The Beaufort Bonnet Company, and Duck Head.
Tommy Bahama‘s net sales in the fiscal quarter ended Jan. 28 totaled $229.6 million, up 9% from the year-ago period. The brand’s sales for the fiscal year, also ended Jan. 28, jumped 22% to $880.2 million.
“I think in Tommy Bahama, in the women’s dress category, we’ve got a lot of room to run. Our dress business has been very strong there, but I think we continue to build that,” Chubb said of future opportunities for the brand. “That is a very large category within the total apparel market.”
Oxford company-wide net sales totaled $382.5 million in its fiscal fourth quarter, up 28% from a year ago. Net sales for the full fiscal year rose 24% to $1.41 billion.
Inventory and Wholesale Caution
Oxford management addressed inventory on Thursday’s call and offered insights in line with many of its industry peers.
Oxford’s inventory level rose 58% in its recently ended quarter, compared to the prior-year period. The increase was partially attributed to Johnny Was, which Oxford announced it was acquiring in September, in addition to the early receipt of certain product to hedge against possible supply chain issues.
“Most of the major retailers are being very, very careful and cautious about their forward inventory buys,” Chubb said. “Most of them are actually buying down on a year-over-year basis. So, in our view, flat is actually an outperform in wholesale this year. So, we’re really pretty happy with that. And, while we’d love to see growth, we also like to see the big retailers being prudent about their inventory buy.”
Economy and Banking
Chubb acknowledged macroeconomic challenges for consumers, but said the Tommy Bahama and general Oxford Industries brand portfolio’s shopper base will get through those headwinds.
The company is projecting net sales of $1.62 billion to $1.66 billion for the current fiscal year, which ends Feb. 3, 2024. That equates to an increase of between 14.9% to 17.7% from the prior year.
The outlook is based on the company’s expectations that trends around the continued demand for “elegant casualwear,” moves to warmer climates, and travel will continue to benefit its brand portfolio, according to Chubb.
The one “uncontrollable factor” currently, the CEO said, is the general stability within the banking system since the collapse of Silicon Valley Bank earlier this month.
“For the consumers that we service, I think the health of the consumer has been good,” Chubb said. “We expect it to continue to be good. We’re not looking for a major macro rebound in the economy, but we think our consumer will hold up pretty well through the year.”