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On Monday, Citi analyst Paul Lejuez adjusted the price target on Oxford Industries shares (NYSE: NYSE:OXM), bringing it down to $52.00 from the previous $65.00, while keeping a Sell rating on the stock. The revision followed the company’s fourth-quarter earnings report, which, despite surpassing consensus estimates and aligning with the upper end of guidance, was considered weak on an absolute basis. According to InvestingPro data, the stock has declined over 42% in the past year, currently trading at $62.54 with a market capitalization of approximately $982 million.
Oxford Industries, known for its clothing brands, reported a slowdown in quarter-to-date trends after a relatively strong holiday season. The deceleration is attributed to broader economic factors and growing consumer uncertainty. Despite maintaining impressive gross profit margins of 62.6%, the impact of tariffs, with approximately 40% of goods sourced from China last year, has contributed to the company’s cautious earnings per share (EPS) guidance for fiscal year 2025. Management has set the EPS forecast at $4.60 to $5.00, significantly below the consensus estimate of $6.81 and under Citi’s prior estimate of $6.06. For deeper insights into Oxford Industries’ financial health and valuation metrics, check out the comprehensive Pro Research Report available on InvestingPro.
Lejuez noted that Oxford Industries is navigating a difficult landscape due to these macroeconomic challenges. Despite these hurdles, sales forecasts remain high; based on the current fiscal year 2025 guidance, sales for the Tommy Bahama and Lilly Pulitzer brands are projected to be roughly 35% higher than in fiscal year 2019. However, the upcoming fiscal year is also marked as a period of investment for the company, with both capital expenditures and expenses expected to rise. This scenario presents additional risks, particularly if sales begin to falter.
The company’s stock price adjustment reflects the cautious outlook provided by management, as well as the potential headwinds from tariffs and increased spending in the coming year. Despite these challenges, Oxford Industries maintains a remarkable 55-year streak of consecutive dividend payments, demonstrating long-term financial stability. The company’s current position highlights the challenges faced by retailers in balancing growth and investment amid an uncertain economic climate. InvestingPro analysis reveals several additional key metrics and insights that could help investors better understand the company’s position in this challenging environment.
In other recent news, Oxford Industries reported its earnings for the first fiscal quarter of 2025, revealing a shortfall in earnings per share (EPS) compared to analyst expectations. The company posted an EPS of $1.13, below the forecasted $1.26, and reported revenue of $390.51 million, slightly above the anticipated $383.94 million. Oxford Industries also released guidance for fiscal 2025, projecting net sales between $1,490 million and $1,530 million, with an expected adjusted EPS range of $4.60 to $5.00. Despite these projections, KeyBanc Capital Markets downgraded Oxford Industries’ stock rating from Overweight to Sector Weight due to concerns about the company’s 2025 outlook. KeyBanc analyst Ashley Owens cited potential challenges, including market softness and margin compression, as factors influencing the downgrade. The company plans to open 20 new stores, including four Marlin bars, and expects to mitigate a $9-$10 million tariff impact by spring 2026. These developments come amid broader economic uncertainties affecting consumer spending and market conditions.
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