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KeyBanc Remains Bullish On Oxford Industries Despite Comp Slowdown

Jayson Derrick

Oxford Industries Inc (NYSE: OXM), parent company of multiple brand including Tommy Bahama, reported third-quarter results which fell short of management's own guidance, but KeyBanc sees the quarter as a "squall, not a storm."

What Happened

Oxford Industries said it earned 14 cents per share in the third quarter on revenue of $233.662 million, which fell short of the Street's estimate of 17 cents per share and $242.45 million.

The company also "moderated" its fourth-quarter comparable sales guidance from a high-single digit increase to a low-single digit increase due to demand from the direct to consumer business coming in weaker than expected.

Why It's Important

Despite a third-quarter miss and downward revision in fourth-quarter comp assumptions, there's no visible brand or product issue impacting sales, KeyBanc Capital Markets' Edward Yruma said in a note. The weakness could be attributed to a "confluence of small issues," including website issues, poorer than expected gift promotions in November and December.

The Lanier brand was impacted by a pullback in department store orders despite seeing strong sell-through.

What's Next

So far in the fourth quarter, Oxford Industries indicated weaker-than-expected sales trends which prompted the analyst to revise his estimates lower. Specifically, Yruma's 2018 estimated EPS moves lower from $4.64 to $4.34 and 2019 estimates move lower from $5.17 to $4.70.

KeyBanc maintains an Overweight rating on Oxford Industries' stock with a price target lowered from $104 to $90.

View more earnings on OXM

The stock traded down 8 percent to $68.90 at time of publication.

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Photo credit: Phillip Pessar, Flickr

Latest Ratings for OXM

Date Firm Action From To
Sep 2018 Citigroup Maintains Buy Buy
Sep 2018 KeyBanc Maintains Overweight Overweight
Aug 2018 KeyBanc Maintains Overweight Overweight

View More Analyst Ratings for OXM
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