Analyst Lowers Expectations For Oxford Industries Amid Softening Trends And Increased Competition

Telsey Advisory Group analyst Dana Telsey reduced the price target at Oxford Industries Inc OXM to $115 from $125, maintaining the Market Perform rating. 

The analyst is bearish on the company's below-consensus Q2 outlook and FY23 guidance cut.

Yesterday, the company reported Q1 2023 net sales growth of 19% Y/Y to $420.1 million, beating the consensus of $419.1 million.

Adjusted EPS of $3.78 exceeded the consensus of $3.74. 

Adjusted gross margin expanded 130 basis points Y/Y to 65.8%. 

Adjusted operating margin contracted to 19.8% from 21.8% a year ago, in line with the consensus estimate.

The company reduced its FY23 sales outlook to $1.59 billion-$1.63 billion (from $1.62 billion-$1.66 billion), below the consensus estimate of $1.64 billion and adjusted EPS to $10.80-$11.20 (from $11.50-$11.90) below the consensus of $11.76. 

Also, the Q2 outlook was below consensus, with sales of $415 million - $435 million (vs. the consensus of $440.59 million) and adjusted EPS of $3.30-$3.50 (vs. consensus of $4.11).

The analyst believes the guidance moderation weighed down the first quarter beat, given management's cautious view amid softening current trends and the possibility of a competitive promotional environment.

Consequently, Telsey decreased the estimate for FY23 sales growth to 14.2% Y/Y to $1.612 billion, from the prior expectations of growth of 16.2% Y/Y to $1.640 billion and EPS to $11.00 (from $11.80 earlier).

Also, Citigroup lowered the price target for OXM to $101 from $110 with a Neutral rating.

Price Action: OXM shares are trading lower by 9.49% at $97.03 on the last check Thursday.