Oxford Industries price target lowered to $44 by Citi on tariff impact

Citi lowered its price target on Oxford Industries (NYSE:OXM) stock to $44.00 from $47.00 on Thursday, while maintaining a Sell rating on the apparel company’s shares. The stock, currently trading at a P/E ratio of 9.08x, is showing signs of being undervalued according to InvestingPro’s Fair Value analysis.

The price target reduction follows Oxford Industries’ first-quarter earnings report, which showed comparable sales declining 5% and earnings per share dropping 31% year-over-year, though results were in line with consensus estimates and company guidance. Despite the challenges, the company maintains impressive gross profit margins of 62.94% and has consistently paid dividends for 55 consecutive years.

Oxford Industries significantly reduced its fiscal 2025 earnings guidance from $4.60-5.00 to $2.80-3.20 per share, primarily due to higher assumed tariffs since its previous financial report on March 25, when only 20% China tariffs were in place.

The company faces particular vulnerability to tariff increases given its relatively high exposure to China, which accounts for approximately 40% of its sourcing as of the end of fiscal 2024, according to Citi’s analysis.

Citi noted that Oxford Industries remains in a challenging position as it navigates a difficult macroeconomic environment while fiscal 2025 represents an investment year with elevated capital expenditures and expenses, creating heightened risk if sales continue to slow. The company maintains a solid current ratio of 1.18 and sufficient cash flows to cover interest payments.

In other recent news, Oxford Industries reported its first-quarter fiscal 2025 earnings, showing a decline in earnings per share (EPS) compared to forecasts. The company posted an EPS of $1.82, falling short of the expected $1.98. However, revenue exceeded expectations, reaching $393 million against a forecast of $383.54 million. Despite the revenue beat, the stock experienced a notable drop during regular trading hours. Oxford Industries is also facing challenges due to tariff costs, which are expected to impact gross margins significantly. The company has projected full-year net sales between $1,475 million and $1,515 million, with an adjusted EPS guidance of $2.80 to $3.20, a significant decrease from the previous year’s $6.68. Analysts from firms like KeyBanc Capital Markets and Truist Securities have been closely monitoring the company’s performance, with discussions focusing on consumer sentiment and the impact of tariffs. Oxford Industries continues to navigate a challenging retail environment, with efforts to diversify its supply chain and mitigate the impact of tariffs on its operations.

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