TLDR
- Oxford beats EPS, stock jumps 17% despite sales slump and margin pressure
- Oxford surges as Q2 EPS tops outlook; sales slip, margins stay resilient
- Strong EPS lifts Oxford stock 17% after Q2 revenue dips and SG&A rise
- Oxford Q2: profit margins shine, EPS beats, stock rallies on resilience
- EPS beat fuels Oxford rally; sales fall but margins and sourcing support
Oxford Industries closed at $40.41 on September 10, 2026, before jumping 17.05% to $47.30 in after-hours trading.
The stock reacted strongly to the company’s second-quarter fiscal 2025 earnings report, which beat adjusted EPS guidance. Although revenue declined year-over-year, stronger-than-expected gross margins supported earnings.
The company posted $403 million in consolidated net sales, down from $420 million in the prior year’s second quarter. However, adjusted earnings per share came in at $1.26, outperforming its guidance range. Improved product margins and effective mitigation of tariff impacts drove this performance.
The management attributed the earnings strength to strategic sourcing shifts and controlled pricing measures. Gross margin held at 61.7% on an adjusted basis, down slightly from 63.3% last year. Still, better-than-expected profitability during promotional events at core brands offset tariff pressures.
Revenue Declines Across Segments While Margins Hold Firm
Oxford’s direct-to-consumer sales declined 4% to $292 million, with both retail and e-commerce segments posting year-over-year drops. Wholesale and outlet sales fell by 6% and 4% respectively, while food and beverage revenue remained flat. Despite softer sales, the company maintained robust margins through selective promotions and favorable mix shifts.
SG&A expenses rose to $226 million, primarily due to new store openings and increased employee-related costs. On an adjusted basis, these expenses reached $224 million versus $213 million in the same period last year. The company opened 26 net new brick-and-mortar stores since Q2 2024, contributing to higher occupancy and depreciation expenses.
Operating income dropped to $28 million on an adjusted basis, reflecting margin compression and lower sales volumes. The adjusted operating margin declined to 7.0%, compared to 13.5% last year. Interest expenses rose to $2 million due to increased borrowing.
Tariff Mitigation and Inventory Strategy Support Long-Term Outlook
Oxford Industries maintained its full-year sales and earnings outlook despite macroeconomic uncertainty and tariff headwinds. The company projects fiscal 2025 net sales between $1.475 billion and $1.515 billion, in line with prior guidance. Adjusted EPS is expected to range from $2.80 to $3.20, down from $6.68 in fiscal 2024.
Management reported inventory levels increased 13% on a FIFO basis due to advanced purchases in anticipation of tariff hikes. They successfully mitigated about half of the expected $80 million tariff exposure through sourcing shifts and vendor concessions. The net tariff impact now stands at $25 million to $35 million, reducing EPS by $1.25 to $1.75.
Oxford ended the quarter with $81 million in outstanding borrowings and $7 million in cash, reflecting elevated capital spending. The company repurchased $55 million in stock and invested in a new distribution center and 11 new stores. Capital expenditures are expected to reach $120 million by year-end, with three new Tommy Bahama Marlin Bars on the way.
