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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended February 3, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File Number: 1-4365
OXFORD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Georgia
(State or other jurisdiction of incorporation or organization)
58-0831862
(I.R.S. Employer Identification No.)
999 Peachtree Street, N.E., Suite 688, Atlanta, Georgia 30309
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
(404) 659-2424
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1 par value
Trading Symbol
OXM
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-
T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ☒
Smaller reporting company ☐
Non-accelerated filer ☐
Accelerated filer ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of
the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of July 28, 2023, which is the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting stock
held by non-affiliates of the registrant (based upon the closing price for the common stock on the New York Stock Exchange on that date) was $1,132,153,021. For purposes of
this calculation only, shares of voting stock directly and indirectly attributable to executive officers, directors and holders of 10% or more of the registrant’s voting stock (based
on Schedule 13G filings made as of or prior to July 28, 2023) are excluded. This determination of affiliate status and the calculation of the shares held by any such person are not
necessarily conclusive determinations for other purposes.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Title of Each Class
Common Stock, $1 par value
Number of Shares Outstanding
as of March 29, 2024
15,629,222
Portions of our proxy statement for our Annual Meeting of Shareholders to be held on June 25, 2024 are incorporated by reference into Part III of this Form 10-K.
Documents Incorporated by Reference
Table of Contents
Table of Contents
PART I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Item 3.
Item 4. Mine Safety Disclosures
Properties
Legal Proceedings
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Financial Statements and Supplementary Data
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
PART IV
Item 15. Exhibits and Financial Statement Schedules
Item 16. Form 10-K Summary
Signatures
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Our SEC filings and public announcements may include forward-looking statements about future events.
Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions
identify forward-looking statements, which generally are not historical in nature. We intend for all forward-looking
statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were
adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks,
uncertainties and assumptions including, without limitation, demand for our products, which may be impacted by
macroeconomic factors that may impact consumer discretionary spending and pricing levels for apparel and related
products, many of which may be impacted by inflationary pressures, elevated interest rates, concerns about the stability of
the banking industry or general economic uncertainty, and the effectiveness of measures to mitigate the impact of these
factors; competitive conditions and/or evolving consumer shopping patterns; acquisition activities (such as the acquisition
of Johnny Was), including our ability to integrate key functions, recognize anticipated synergies and minimize related
disruptions or distractions to our business as a result of these activities; supply chain disruptions; costs and availability of
labor and freight deliveries, including our ability to appropriately staff our retail stores and food and beverage locations;
costs of products as well as the raw materials used in those products, as well as our ability to pass along price increases to
consumers; energy costs; our ability to respond to rapidly changing consumer expectations; unseasonal or extreme weather
conditions or natural disasters, including the ultimate impact of the recent wildfires on the island of Maui; the ability of
business partners, including suppliers, vendors, wholesale customers, licensees, logistics providers and landlords, to meet
their obligations to us and/or continue our business relationship to the same degree as they have historically; retention of
and disciplined execution by key management and other critical personnel; cybersecurity breaches and ransomware attacks,
as well as our and our third party vendors’ ability to properly collect, use, manage and secure business, consumer and
employee data and maintain continuity of our information technology systems; the effectiveness of our advertising
initiatives in defining, launching and communicating brand-relevant customer experiences; the level of our indebtedness,
including the risks associated with heightened interest rates on the debt and the potential impact on our ability to operate
and expand our business; changes in international, federal or state tax, trade and other laws and regulations, including the
potential imposition of additional duties; the timing of shipments requested by our wholesale customers; fluctuations and
volatility in global financial and/or real estate markets; the timing and cost of retail store and food and beverage location
openings and remodels, technology implementations and other capital expenditures; the timing, cost and successful
implementation of changes to our distribution network; pandemics or other public health crises; expected outcomes of
pending or potential litigation and regulatory actions; the increased consumer, employee and regulatory focus on corporate
responsibility issues; the regulation or prohibition of goods sourced, or containing raw materials or components, from
certain regions and our ability to evidence compliance; access to capital and/or credit markets; factors that could affect our
consolidated effective tax rate; the risk of impairment to goodwill and other intangible assets; risks related to a shutdown of
the US government; and geopolitical risks, including ongoing challenges between the United States and China and those
related to the ongoing war in Ukraine, the Israel-Hamas war and the conflict in the Red Sea region. Forward-looking
statements reflect our expectations at the time such forward-looking statements are made, based on information available at
such time, and are not guarantees of performance.
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SUMMARY OF RISKS AFFECTING OUR BUSINESS
Our business is subject to numerous risks. The following summary highlights some of the risks you should
consider with respect to our business and prospects. This summary is not complete and the risks summarized below are not
the only risks we face. You should review and carefully consider the risks and uncertainties described in more detail in Part
I, Item 1A. Risk Factors, which includes a more complete discussion of the risks summarized below:
Risks Related to our Industry and Macroeconomic Conditions
●
●
●
●
Our business and financial condition are heavily influenced by general economic and market conditions
which are outside of our control.
We operate in a highly competitive industry with significant pricing pressures and heightened customer
expectations.
Failure to anticipate and adapt to changing fashion trends and consumer preferences could harm our
reputation and financial performance.
Our operations and those of our suppliers, vendors and wholesale customers may be affected by changes
in weather patterns, natural or man-made disasters, public health crises, war, terrorism or other
catastrophes.
Risks Related to our Business Strategy and Operations
●
●
●
●
●
●
●
●
●
Failure to maintain the reputation or value of our brands could harm our business operations and
financial condition.
Our inability to execute our direct to consumer and portfolio-level strategies in response to shifts in
consumer shopping behavior could adversely affect our financial results and operations.
We may be unable to grow our business through organic growth, which could have a material adverse
effect on our business, financial condition, liquidity and results of operations.
The acquisition of new businesses is inherently risky, and we cannot be certain that we will realize the
anticipated benefits of any acquisition.
The divestiture or discontinuation of businesses and product lines could result in unexpected liabilities and
adversely affect our financial condition, cash flows and results of operations.
Our business could be harmed if we fail to maintain proper inventory levels.
We are subject to risks associated with leasing real estate for our retail stores and restaurants.
We make use of debt to finance our operations, which could expose us to risks that adversely affect our
business, financial position and operating results.
The loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s
financial position, could negatively impact our net sales and profitability.
Risks Related to Cybersecurity and Information Technology
●
●
●
Cybersecurity attacks and/or breaches of information security or privacy could disrupt our operations,
cause us to incur additional expenses, expose us to litigation and/or cause us financial harm.
Our operations are reliant on information technology, and any interruption or other failure could have an
adverse effect on our business or results of operations.
Reliance on outdated technology or failure to upgrade our information technology systems and
capabilities could impair the efficient operation of our business and our ability to compete.
Risks Related to our Sourcing and Distribution Strategies
●
Our reliance on third party producers in foreign countries to meet our production demands exposes us to
risks that could disrupt our supply chain, increase our costs and negatively impact our operations.
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●
●
●
●
●
●
Our operations are dependent on the global supply chain, and the impact of supply chain constraints may
adversely impact our business and operating results.
Any disruption or failure in our primary distribution facilities may materially adversely affect our business
or operations.
Fluctuations and volatility in the cost and availability of raw materials, labor and freight may materially
increase our costs.
Labor-related matters, including labor disputes, may adversely affect our operations.
Our geographic concentration exposes us to certain regional risks.
Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign
currency exchange rates.
Risks Related to Regulatory, Tax and Financial Reporting Matters
●
●
●
●
●
●
Our business is subject to various federal, foreign, state and local laws and regulations, and the costs of
compliance with, or the violation of, such laws and regulations could have an adverse effect on our costs
or operations.
Changes in international trade regulation could increase our costs and/or disrupt our supply chain.
Any violation or perceived violation of our Supplier Code of Conduct or environmental and social
compliance programs, including by our manufacturers or vendors, could have a material adverse effect on
our brands.
As a multi-national apparel company, we may experience fluctuations in our tax liabilities and effective
tax rate.
Impairment charges for goodwill or intangible assets could have a material adverse impact on our
financial results.
Any failure to maintain liquor licenses or comply with applicable regulations could adversely affect the
profitability of our restaurant operations.
General Risks
●
●
●
●
●
Our business depends on our senior management and other key personnel, and failure to successfully
attract, retain and implement succession of our senior management and key personnel or to attract,
develop and retain personnel to fulfill other critical functions may have an adverse effect on our
operations and ability to execute our strategies.
We may be unable to protect our trademarks and other intellectual property.
We are subject to periodic litigation, which may cause us to incur substantial expenses or unexpected
liabilities.
Our common stock price may be highly volatile, and we may be unable to meet investor and analyst
expectations.
Other factors may have an adverse effect on our business, results of operations and financial condition.
DEFINITIONS
As used in this report, unless the context requires otherwise, "our," "us" or "we" means Oxford Industries, Inc. and
its consolidated subsidiaries; "SG&A" means selling, general and administrative expenses; "SEC" means the United States
Securities and Exchange Commission; "FASB" means the Financial Accounting Standards Board; "ASC" means the FASB
Accounting Standards Codification; "GAAP" means generally accepted accounting principles in the United
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States; and "TBBC" means The Beaufort Bonnet Company. Additionally, the terms listed below reflect the respective
period noted:
Fiscal 2025
Fiscal 2024
Fiscal 2023
Fiscal 2022
Fiscal 2021
Fiscal 2020
Fourth quarter Fiscal 2023
Third quarter Fiscal 2023
Second quarter Fiscal 2023
First quarter Fiscal 2023
Fourth quarter Fiscal 2022
Third quarter Fiscal 2022
Second quarter Fiscal 2022
First quarter Fiscal 2022
52 weeks ending January 31, 2026
52 weeks ending February 1, 2025
53 weeks ended February 3, 2024
52 weeks ended January 28, 2023
52 weeks ended January 29, 2022
52 weeks ended January 30, 2021
14 weeks ended February 3, 2024
13 weeks ended October 28, 2023
13 weeks ended July 29, 2023
13 weeks ended April 29, 2023
13 weeks ended January 28, 2023
13 weeks ended October 29, 2022
13 weeks ended July 30, 2022
13 weeks ended April 30, 2022
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Table of Contents
Item 1. Business
Overview
PART I
BUSINESS AND PRODUCTS
We are a leading branded apparel company that designs, sources, markets and distributes products bearing the
trademarks of our portfolio of lifestyle brands: Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck
Head and Jack Rogers.
Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong
emotional response from our target consumers. We consider lifestyle brands to be those brands that have a clearly defined
and targeted point of view inspired by an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create
an emotional connection can command greater loyalty and higher price points and create licensing opportunities. We
believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective
lifestyle brand message and distributing products to consumers where and when they want them. We believe the principal
competitive factors in the apparel industry are the reputation, value, and image of brand names; design of differentiated,
innovative or otherwise compelling product; consumer preference; price; quality; marketing (including through rapidly
shifting digital and social media vehicles); product fulfillment capabilities; and customer service. Our ability to compete
successfully in the apparel industry is dependent on our proficiency in foreseeing changes and trends in fashion and
consumer preference and presenting appealing products for consumers. Our design-led, commercially informed lifestyle
brand operations strive to provide exciting, differentiated fashion products each season as well as certain core products that
consumers expect from us.
To further strengthen each lifestyle brand’s connections with consumers, we directly communicate through digital
and print media on a regular basis with our loyal consumers, including the approximately 2.7 million who have transacted
with us in the last year. We believe our ability to effectively communicate the images, lifestyle and products of our brands
and create an emotional connection with consumers is critical to the success of our brands, as evidenced by our advertising
which engages our consumers by conveying the lifestyle of the brand.
We believe the attraction of each of our lifestyle brands is a direct result of years of maintaining appropriate
quality and design, and appropriately restricting the distribution of our products. We believe this approach to quality,
design, distribution and communication has been critical in allowing us to achieve the current retail price points, high gross
margins and success for our brands.
During Fiscal 2023, 80% of our consolidated net sales were through our direct to consumer channels of
distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our
Tommy Bahama food and beverage operations. During Fiscal 2023, the breakdown of our consolidated net sales by direct
to consumer channel was as follows: e-commerce of $538 million, or 34%; full-price retail of $533 million, or 34%; food
and beverage of $116 million, or 7%; and outlet operations of $73 million, or 5%. Our direct to consumer operations
provide us with the opportunity to interact directly with our customers, present to them a broad assortment of our current
season products and immerse them in the theme of the lifestyle brand. We believe that presenting our products in a digital
or physical setting specifically designed to showcase the lifestyle on which the brands are based enhances the image of our
brands.
Our brand-specific e-commerce business continues to grow. Our e-commerce business is very profitable as we
have a high gross margin on e-commerce sales that allow us to absorb any incremental picking, packing and freight
expense associated with operating an e-commerce business and still maintain a high profit margin on e-commerce sales.
Our 278 full-price retail stores allow us the opportunity to carry a full line of current season merchandise,
including apparel, accessories and other products, all presented in an aspirational brand-specific atmosphere. We believe
that our full-price retail stores provide high visibility for our brands and products and allow us to stay close to the
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preferences of our consumers. Further, we believe that our presentation of products and our strategy to operate the full-
price retail stores with limited in-store promotional activities enhance the value and reputation of our lifestyle brands and,
in turn, strengthen our business and relationships with key wholesale customers. Approximately one-half of our full-price
retail stores are located in warm weather resort or travel-to destinations and states. We believe there are still opportunities
for new stores in both warmer and colder climates as we believe the more important consideration is whether the location
attracts the affluent consumer that we are targeting.
Additionally, our Tommy Bahama brand operates 22 food and beverage locations, including Marlin Bars and full-
service restaurants, generally adjacent to a Tommy Bahama full-price retail store. These food and beverage locations
provide us with the opportunity to immerse customers in the ultimate Tommy Bahama experience as well as attract new
customers to the Tommy Bahama brand. Both Tommy Bahama and Johnny Was operate brand-specific outlet stores, which
are typically utilized for end of season inventory clearance.
The remaining 20% of our net sales were generated through our wholesale distribution channels, which
complement our direct to consumer operations, provide access to a larger base of consumers and generate high operating
margins given the lower fixed costs associated with these operations. Our wholesale operations consist of sales of products
bearing the trademarks of our lifestyle brands to various specialty stores, better department stores, multi-branded e-
commerce retailers and other retailers.
At the same time, as we seek to maintain the integrity and continued success of our lifestyle brands by limiting
promotional activity in our full-price retail stores and e-commerce websites, we intend to maintain controlled distribution
with careful selection of the retailers through which we sell our products and generally target wholesale customers that
follow a limited promotions approach. We continue to value our long-standing relationships with our wholesale customers
and are committed to working with them to enhance the success of our lifestyle brands within their stores.
Competitive Environment
We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application
of technology to fashion retail. The application of technology, including the internet and mobile devices, to fashion retail
provides consumers increasing access to multiple, responsive distribution platforms and an unprecedented ability to
communicate directly with brands and retailers and capabilities by some competitors to offer same-day or next-day
delivery of products to online consumers. As a result, consumers have more information and greater control over
information they receive as well as broader, faster and cheaper access to goods than ever before. This is revolutionizing the
way that consumers shop for fashion and other goods, which continues to be evidenced by weakness and store closures for
certain department stores and mall-based retailers, uncertain consumer retail traffic patterns, a more promotional retail
environment, expansion of off-price and discount retailers, and a shift from bricks and mortar to internet purchasing.
This competitive and evolving environment requires that brands and retailers approach their operations, including
marketing and advertising, very differently than they have historically and may result in increased operating costs and
investments to generate growth or even maintain existing sales levels. While the competition and evolution present
significant risks, especially for traditional retailers who fail or are unable to adapt, we believe it also presents a tremendous
opportunity for brands and retailers to capitalize on the changing consumer environment.
No single apparel firm or small group of apparel firms dominates the apparel industry, and our competitors vary
by operating group and distribution channel. The apparel industry is cyclical and very dependent on the overall level and
focus of discretionary consumer spending, which changes as consumer preferences and regional, domestic and
international economic conditions change. Also, in recent years consumers have chosen to spend less of their discretionary
spending on certain product categories, including apparel, while spending more on services and other product categories.
Further, negative economic conditions often have a longer and more severe impact on the apparel industry than on
other industries due, in part, to apparel purchases often being more of a discretionary purchase. The current
macroenvironment, with heightened concerns about continued inflation, a global economic recession, geopolitical issues,
the availability and cost of credit and elevated interest rates for prolonged periods, is creating a complex and challenging
retail environment, which may impact our businesses and exacerbate some of the inherent challenges to our operations.
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There remains significant uncertainty in the macroeconomic environment, and the impact of these and other factors could
have a major effect on our businesses.
Investments and Opportunities
The evolution in the fashion retail industry presents significant risks, especially for traditional retailers and others
who fail or are unable to adapt, but we believe it also presents a tremendous opportunity for brands and retailers to
capitalize on the changing consumer environment. We believe our lifestyle brands have true competitive advantages in this
new retailing paradigm, and we continue to invest in and leverage technology to serve our consumers when and where they
want to be served. We continue to believe that our lifestyle brands, with their strong emotional connections with
consumers, are well suited to succeed and thrive in the long term while managing the various challenges facing our
industry. Further, each of our brands aims to further enhance its customer-focused, dynamic, thriving, digitally-driven,
mobile-centered, cross-channel personalized and seamless shopping experience that recognizes and serves customers in
their brand discovery and purchasing habits of the future.
We believe there are ample opportunities to expand the reach of each of our lifestyle brands in the future,
including the opening of new direct to consumer locations, e-commerce growth and wholesale operations expansion. In
order to expand the reach and maximize the success of each of our brands, we believe we must continue to invest in the
lifestyle brands to take advantage of their long-term growth opportunities. We expect Fiscal 2024 will be a particularly
heavy year for investment in capital expenditures and expect such investments to primarily be associated with a multi-year
project to build a new distribution center in the Southeastern United States to ensure best-in-class direct-to-consumer
throughput capabilities for our brands, direct to consumer location build-outs for new, relocated or remodeled locations,
technology and related enhancements to support our direct to consumer operations and administrative office expenditures.
In addition to our capital investments, we will continue to invest in our SG&A expense infrastructure, including people,
technology, advertising and other resources. While we believe that our investments will generate long-term benefits, the
investments are likely to have a short-term negative impact on our operating margin as it will take some time for the
anticipated sales growth to absorb the incremental costs of these expenditures.
While we believe we have significant opportunities to appropriately deploy our capital and resources in our
existing lifestyle brands, we will continue to evaluate opportunities to add additional lifestyle brands, both large and small,
to our portfolio if we identify appropriate targets that meet our investment criteria and/or take strategic measures to return
capital to our shareholders as and when circumstances merit.
Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could
impact our business are described in Part I, Item 1A. Risk Factors of this report.
Operating Groups
We identify our operating groups based on the way our management organizes the components of our business for
purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused
management approach, emphasizing operational coordination and resource allocation across each brand’s direct to
consumer, wholesale and licensing operations, as applicable. Subsequent to our acquisition of Johnny Was, our business is
organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups. Operating results for
periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021. For
additional information about each of our reportable operating groups as well as Corporate and Other, see Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Note 2 of our consolidated
financial statements, each included in this report. The table below presents certain financial information about each of our
operating groups, as well as Corporate and Other (in thousands).
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Net Sales
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands
Lanier Apparel (2)
Corporate and Other
Consolidated net sales
Operating Income (Loss)
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands (3)
Lanier Apparel (2)
Corporate and Other (4)
Consolidated Operating Income
Fiscal 2023 Fiscal 2022 Fiscal 2021
$ 898,807
343,499
202,859
126,825
$ 880,233
339,266
72,591
116,484
—
—
(515)
$ 1,571,475
2,954
$ 1,411,528
$ 160,543
56,110
(104,776)
6,714
$ 172,761
67,098
(1,544)
15,602
—
—
(37,609)
80,982
(35,143)
$ 218,774
$
$ 724,305
298,995
—
90,053
24,858
3,868
1,142,079
$ 111,733
63,601
—
16,649
4,888
(31,368)
165,503
(1) The Johnny Was business was acquired on September 19, 2022. Activities for Fiscal 2022 consist of 19 weeks of
activity from the acquisition date through January 28, 2023. The operating loss for Johnny Was in Fiscal 2023 resulted
from a $111 million impairment charge for goodwill and intangible assets.
(2)
In Fiscal 2021, we exited our Lanier Apparel business, which had been focused on moderately priced tailored clothing
and related products. The Lanier Apparel exit is discussed in more detail in Note 12 of our consolidated financial
statements included in this report.
(3) The operating income for Emerging Brands in Fiscal 2023 included a $2 million impairment charge related to an
unconsolidated entity.
(4) The operating loss for Corporate and Other includes a last-in, first-out (“LIFO”) accounting charge of $10 million, $3
million and $16 million in Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively. The operating loss for Corporate and
Other in Fiscal 2022 also included $3 million of transaction expenses and integration costs associated with the Johnny
Was acquisition. Fiscal 2021 also included a gain on sale of an unconsolidated entity of $12 million.
Tommy Bahama
Tommy Bahama designs, sources, markets and distributes men’s and women’s sportswear and related products.
Tommy Bahama’s typical consumer is older than 45 years old, has a household annual income in excess of $100,000, lives
in or travels to warm weather and resort locations and embraces a relaxed and casual approach to daily living. Tommy
Bahama products can be found in our Tommy Bahama stores and on our Tommy Bahama e-commerce website,
tommybahama.com, as well as at better department stores, independent specialty stores and multi-branded e-commerce
retailers. We also operate Tommy Bahama food and beverage locations and license the Tommy Bahama name for various
product categories. During Fiscal 2023, 96% of Tommy Bahama’s sales were in the United States, with the remaining sales
in Australia and Canada.
In Fiscal 2023, we increased Tommy Bahama’s sales by 2% to $899 million from $880 million in Fiscal 2022.
Operating income decreased by 7% to $161 million, or 17.9% of sales, compared to $173 million, or 19.6% of sales, in
Fiscal 2022, resulting primarily from our SG&A investments during Fiscal 2023. The operating income achieved in Fiscal
2023 and Fiscal 2022 is considerably higher than the 7.9% operating margin on $677 million of net sales generated in the
last pre-pandemic year of Fiscal 2019. The significant improvement in operating margin reflects the results of important
initiatives for us in recent years to increase the profitability of the Tommy Bahama operating group. Maintaining the
significantly higher post-pandemic operating margin levels continues to be a focus area for the long-term prospects of the
Tommy Bahama business.
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Direct to Consumer Operations
A key component of our Tommy Bahama strategy is to operate retail stores, e-commerce websites and food and
beverage concepts, which we believe permits us to develop and build brand awareness by presenting our products in a
setting specifically designed to showcase the aspirational lifestyle on which the products are based. Our Tommy Bahama
direct to consumer channels, which consist of full-price retail store, e-commerce, food and beverage and outlet store
operations, in the aggregate, represented 83% of Tommy Bahama’s net sales in Fiscal 2023. Full-price retail store, e-
commerce, food and beverage and outlet store net sales accounted for 37%, 25%, 13% and 8%, respectively, of Tommy
Bahama’s net sales in Fiscal 2023.
Our Tommy Bahama e-commerce business, which generated $224 million of net sales in Fiscal 2023, has grown
significantly over the last few years, including a 5% increase in net sales compared to Fiscal 2022. Our Tommy Bahama
websites, including the tommybahama.com website, allow consumers to buy Tommy Bahama products directly from us via
the internet. These websites also enable us to increase our database of consumer contacts, which allows us to communicate
directly and frequently with consenting consumers. As we reach more customers in the future, we anticipate that our e-
commerce distribution channel for Tommy Bahama will continue to grow at a faster pace than our retail store or wholesale
operations.
Our direct to consumer strategy for the Tommy Bahama brand also includes locating and operating full-price retail
stores in lifestyle shopping centers, resort destinations, brand-appropriate street locations and upscale malls. Generally, we
seek to locate our full-price retail stores in shopping areas and malls that have high-profile or upscale consumer brand
adjacencies. As of February 3, 2024, the majority of our Tommy Bahama full-price retail stores were in street-front
locations or lifestyle centers with the remainder primarily in regional indoor malls, with a number of those regional indoor
locations in resort travel destinations. We believe that we have opportunities for continued sales growth for Tommy
Bahama, particularly in our women’s business, which represented 36% and 34% of sales in our direct to consumer
operations in Fiscal 2023 and Fiscal 2022, respectively, with women’s swim representing about one-third of the women’s
business. For Tommy Bahama’s domestic full-price retail stores and retail-food and beverage locations operating for the
full Fiscal 2023 year, sales per gross square foot, excluding food and beverage sales and food and beverage space, were
approximately $815, compared to approximately $790 in Fiscal 2022.
As of February 3, 2024, we operated 22 Tommy Bahama food and beverage locations including 13 restaurants and
nine Marlin Bar locations, generally adjacent to a Tommy Bahama full-price retail store location. These retail-food and
beverage locations, which generated over 25% of Tommy Bahama’s net sales in Fiscal 2023, provide us with the
opportunity to immerse customers in the ultimate Tommy Bahama experience. We do not anticipate that the majority of our
full-price retail locations will have an adjacent food and beverage location; however, we have determined that an adjacent
food and beverage location can further enhance the image or exposure of the brand in select, high-profile, brand
appropriate locations. The net sales per square foot in our domestic full-price retail stores that are adjacent to a food and
beverage location have historically been approximately twice the sales per square foot of our other domestic full-price
retail stores. We believe that the customer immersing themselves into the Tommy Bahama lifestyle by having a meal or a
drink at the Tommy Bahama food and beverage location and visiting the adjacent full-price retail store may entice the
customer to purchase additional Tommy Bahama merchandise and potentially provide a memorable consumer experience
that further enhances the relationship between Tommy Bahama and the consumer. The Marlin Bar concept, like our
traditional restaurant locations, is adjacent to one of our full-price retail store locations and serves food and beverages, but
in a smaller space and with food options more focused on fast, yet upscale, casual dining, with small plate offerings rather
than entrees. We believe that the smaller footprint, reduced labor requirements and lower required capital expenditure of
the Marlin Bar concept provides us with the long-term potential for opening additional retail-food and beverage locations
that are more in line with evolving customer trends toward fast casual dining, particularly with younger consumers.
Typically, at the end of the summer and holiday season, Tommy Bahama will conduct sales both in-store and
online to move end of season product. Utilizing Tommy Bahama’s Enterprise Order Management (EOM) system, many
online orders will be fulfilled from retail stores, greatly reducing the amount of goods that ultimately get transferred from
full-price retail stores to outlet stores. Tommy Bahama utilizes its outlet stores, which generated 8% of total Tommy
Bahama sales in Fiscal 2023, and sales to off-price retailers to sell the remaining end of season or excess inventory. Our
Tommy Bahama outlet stores are generally located in outlet shopping centers that include other upscale retailers and serve
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an important role in overall inventory management by often allowing us to sell discontinued and out-of-season products at
better prices than are otherwise available from outside parties. We believe that this approach has helped us protect the
integrity of the Tommy Bahama brand by allowing our full-price retail stores to limit promotional activity while controlling
the distribution of discontinued and out-of-season product. To supplement the clearance items sold in Tommy Bahama
outlets and offer a more comprehensive selection of products and sizes, we merchandise our Tommy Bahama outlets with
certain made-for products. Currently, we operate one outlet store for approximately every four full-price retail stores.
The table below provides certain information regarding Tommy Bahama direct to consumer locations as of
February 3, 2024.
Florida
California
Texas
Hawaii
Other states
Total domestic
Canada
Total North America
Australia
Total
Average square feet per store (2)
Total square feet at year end (2)
Full-Price
Retail Stores
Retail‑Food & Beverage
Locations (1)
Outlet Stores
Total
16
15
6
5
41
83
6
89
13
102
3,300
340,000
10
4
2
3
3
22
—
22
—
22
4,300
94,000
5
4
4
1
14
28
2
30
4
34
4,400
149,000
31
23
12
9
58
133
8
141
17
158
(1) Consists of 13 traditional format retail-restaurant locations and nine Marlin Bar locations.
(2) Square feet for retail-food and beverage locations consists of retail square footage and excludes square feet used in the
associated food and beverage operations.
During Fiscal 2023, Florida, California, Hawaii and Texas represented 34%, 16%, 12% and 8%, respectively, of
our Tommy Bahama direct to consumer retail and retail-food and beverage location sales. Including e-commerce sales,
during Fiscal 2023, Florida, California, Hawaii and Texas represented 28%, 15%, 9% and 8%, respectively, of total Tommy
Bahama direct to consumer sales.
The table below reflects the changes in store count for Tommy Bahama locations during Fiscal 2023.
Full-Price
Retail Stores
Retail‑Food & Beverage
Locations
Outlet Stores
Open as of beginning of fiscal year
Opened
Closed
Open as of end of fiscal year
103
7
(8)
102
21
2
(1)
22
33
3
(2)
34
Total
157
12
(11)
158
In future periods, we anticipate that many of our new Tommy Bahama store openings will be Marlin Bar locations
that are either new locations or conversions of existing full-price retail stores. Currently, we have five Marlin Bar openings
scheduled for Fiscal 2024, including the conversion of Tommy Bahama full-price retail locations in San Antonio, Texas,
Charlotte, North Carolina and King of Prussia, Pennsylvania as well as new locations in Sarasota, Florida and Oklahoma
City, Oklahoma. We also have other locations in the pipeline for openings in Fiscal 2025 and beyond and anticipate
opening at least three Marlin Bar locations in Fiscal 2025, subject to lease negotiation, construction timing and other
factors. We continue to look for other appropriate locations for full-price retail stores and Marlin Bars. In addition to the
planned Marlin Bars in Fiscal 2024, we are also targeting three new full-price locations and three full-price retail store
relocations. We believe that in Fiscal 2024, we may close a limited number of locations, including certain outlets and full-
price retail locations.
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The construction and/or relocation of retail stores requires a greater amount of initial capital investment than
wholesale operations, as well as greater operating costs. In addition to new store openings, we also incur capital
expenditure costs related to remodels or expansions of existing stores, particularly when we renew or extend a lease
beyond the original lease term, or otherwise determine that a remodel of a store is appropriate. The cost of a Tommy
Bahama Marlin Bar is significantly more than the cost of a full-price retail store and can vary significantly depending on a
variety of factors. The cost to build out a Marlin Bar location averages $4 million and future locations may be more or less
expensive than that amount. For most of our full-price retail stores and our Marlin Bar locations, the landlord often
provides certain incentives to fund a portion of our capital expenditures.
Wholesale Operations
To complement our direct to consumer operations and have access to a larger group of consumers, we maintain a
wholesale business for Tommy Bahama. Tommy Bahama’s wholesale customers include better department stores, specialty
stores and multi-brand e-commerce retailers that generally follow a retail model approach with limited discounting. We
value our long-standing relationships with our wholesale customers and are committed to working with them to enhance
the success of the Tommy Bahama brand within their stores.
With its wide distribution currently, we believe that domestic sales growth in our men’s apparel wholesale
business may be somewhat limited in the long term. However, we believe that we may have opportunities for wholesale
sales increases for our Tommy Bahama women’s business in the future, with its appeal evidenced by its performance in our
full-price retail stores and e-commerce websites. Wholesale sales for Tommy Bahama accounted for 17% of Tommy
Bahama’s net sales in Fiscal 2023. Approximately 10% of Tommy Bahama’s net sales reflects sales to major department
stores with our remaining wholesale sales primarily to specialty stores. During Fiscal 2023, 12% of Tommy Bahama’s net
sales were to Tommy Bahama’s 10 largest wholesale customers, with its largest customer representing less than 5% of
Tommy Bahama’s net sales.
Tommy Bahama Resort
In Fiscal 2022, Tommy Bahama entered into a licensing arrangement for the first Tommy Bahama resort. Pursuant
to the licensing agreement, the Miramonte Resort & Spa in Indian Wells, California was converted into the Tommy
Bahama Miramonte Resort & Spa with a successful relaunch in the Third Quarter of Fiscal 2023. Tommy Bahama will
earn royalty income calculated as a percentage of revenues associated with the resort. The property is managed and
operated by a national commercial and hospitality real estate company with considerable experience in premier resort
development and operations.
Lilly Pulitzer
Lilly Pulitzer designs, sources, markets and distributes upscale collections of women’s and girl’s dresses,
sportswear and related products. The Lilly Pulitzer brand was originally created in the late 1950s by Lilly Pulitzer and is an
affluent brand with a heritage and aesthetic based on the Palm Beach resort lifestyle. The brand is somewhat unique among
women’s brands in that it has demonstrated multi-generational appeal, including among young women in college or
recently graduated from college; young mothers with their daughters; and women who are not tied to the academic
calendar. The brand’s 65th anniversary in Fiscal 2024 sets the stage for continued investment in brand enhancement that is
the culmination of a multi-year initiative of modernizing the brand. Enhancements in Fiscal 2024 will include a visual
refresh of the brand across retail store locations, marketing, packaging, and merchandising.
Lilly Pulitzer products can be found on our Lilly Pulitzer website, lillypulitzer.com, in our owned Lilly Pulitzer
stores, and in Lilly Pulitzer Signature Stores, which are described below, as well as in independent specialty stores and
better department stores. During Fiscal 2023, 38%, 35% and 14% of Lilly Pulitzer’s net sales were for women’s dresses,
sportswear, and Luxletic athleisure products, respectively, with the remaining sales consisting of Lilly Pulitzer accessories,
including scarves, bags, jewelry and belts, children’s apparel, swim, footwear and licensed products.
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Direct to Consumer Operations
Lilly Pulitzer’s direct to consumer distribution channel, which consists of e-commerce operations and full-price
retail stores, represented 84% of Lilly Pulitzer’s net sales in Fiscal 2023. A key element of our Lilly Pulitzer strategy is the
lillypulitzer.com website, which generated $175 million, or 51%, of Lilly Pulitzer’s net sales in Fiscal 2023. Another key
component of our Lilly Pulitzer direct to consumer strategy is to operate our own Lilly Pulitzer stores, which represented
33% of Lilly Pulitzer’s net sales in Fiscal 2023.
The Lilly Pulitzer e-commerce business has experienced double-digit percentage growth for many years, and we
anticipate that the net sales growth of the e-commerce business will remain strong in the future. We utilize the Lilly
Pulitzer website as an effective means of liquidating discontinued or out-of-season inventory in a brand appropriate manner
and at gross margins in excess of 40% via e-commerce flash clearance sales. These sales create a significant amount of
excitement with loyal Lilly Pulitzer consumers, who are looking for an opportunity to purchase Lilly Pulitzer products at a
discounted price and are also important in attracting new consumers to the Lilly Pulitzer brand. These e-commerce flash
clearance sales typically run for two to three days during end of season clearance periods allowing the Lilly Pulitzer
website to generally remain full price for the remainder of the year. During Fiscal 2023, 35% of Lilly Pulitzer’s e-
commerce sales, or 18% of Lilly Pulitzer’s net sales, were e-commerce flash clearance sales.
Our full-price retail store strategy for the Lilly Pulitzer brand includes operating full-price retail stores in higher-
end lifestyle shopping centers and malls, resort destinations and brand-appropriate street locations. As of February 3, 2024,
about 40% of our Lilly Pulitzer full-price stores were located in outdoor regional lifestyle centers and approximately one-
quarter of our Lilly Pulitzer stores were located in indoor regional malls, with the remaining locations in resort or street
locations. In certain seasonal locations such as Nantucket, Massachusetts and Watch Hill, Rhode Island, our stores are only
open during the resort season. Additionally, we may open temporary pop-up stores in certain locations.
Lilly Pulitzer’s full-price retail store sales per gross square foot for Fiscal 2023 were approximately $737 for the
full-price retail stores which were open the full Fiscal 2023 year, as compared to $765 in Fiscal 2022. The table below
provides certain information regarding Lilly Pulitzer direct to consumer locations as of February 3, 2024.
Florida
Massachusetts
Virginia
North Carolina
Other
Total
Average square feet per store
Total square feet at year-end
14
Full-Price
Retail Stores
21
6
5
5
23
60
2,500
152,000
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During Fiscal 2023, 51% of Lilly Pulitzer’s full-price retail store sales were in stores located in Florida with no
other state generating more than 10% of full-price retail store sales. Including e-commerce sales, during Fiscal 2023,
Florida represented 34% of total Lilly Pulitzer direct to consumer sales.
The table below reflects the changes in direct to consumer location count for Lilly Pulitzer stores during Fiscal
2023.
Open as of beginning of fiscal year
Opened
Closed
Open as of end of fiscal year
Full-Price
Retail Stores
59
4
(3)
60
Currently, we expect to open at least five new full-price retail stores in Fiscal 2024, with the anticipated new
stores in Florida, Rhode Island, Massachusetts, Georgia and Arizona. We are in the process of identifying sites or
negotiating leases for additional locations. We continue to look for other appropriate locations and anticipate returning to a
pace of opening as many as five to six locations per year in the future. At the same time, we may relocate or close a limited
number of locations at lease expiration, or sooner based on store performance. The construction or relocation of retail
stores requires a greater amount of initial capital investment than wholesale operations, as well as greater operating costs.
In addition to new store openings, we also incur capital expenditure costs related to remodels or expansions of existing
stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel
of a store is appropriate.
Wholesale Operations
To complement our direct to consumer operations and have access to a larger group of consumers, we maintain
wholesale operations for Lilly Pulitzer. These wholesale operations, which represented 16% of Lilly Pulitzer’s net sales in
Fiscal 2023, are primarily with Signature Stores, independent specialty stores, better department stores and multi-branded
e-commerce retailers that generally follow a retail model approach with limited discounting. During Fiscal 2023,
approximately one-quarter of Lilly Pulitzer’s wholesale sales were to Lilly Pulitzer’s Signature Stores, approximately one-
fifth of Lilly Pulitzer’s wholesale sales were to specialty stores and less than one-fifth of Lilly Pulitzer’s wholesale sales, or
less than 5% of Lilly Pulitzer’s net sales, were to department stores. The remaining wholesale sales were primarily to off-
price retailers and national accounts, including on-line retailers. Lilly Pulitzer’s net sales to its 10 largest wholesale
customers represented 9% of Lilly Pulitzer’s net sales in Fiscal 2023 with its largest customer representing less than 5% of
Lilly Pulitzer’s net sales.
An important part of Lilly Pulitzer’s wholesale distribution is sales to Signature Stores. For these stores, we enter
into agreements whereby we grant the other party the right to independently operate one or more stores as a Lilly Pulitzer
Signature Store, subject to certain conditions, including designating substantially all floor space specifically for Lilly
Pulitzer products and adhering to certain trademark usage requirements. We sell products to these Lilly Pulitzer Signature
Stores on a wholesale basis and do not receive royalty income associated with these sales. As of February 3, 2024, there
were 46 Lilly Pulitzer Signature Stores.
Johnny Was
In the Third Quarter of Fiscal 2022, we acquired the Johnny Was California lifestyle brand and related operations,
which includes the design, sourcing, marketing and distribution of collections of affordable luxury, artisan-inspired
bohemian apparel, accessories and home goods. The Johnny Was brand was founded in 1987 and continues to transcend
fashion trends with its beautifully crafted, globally inspired products and demonstrates a unique ability to combine and mix
elevated fabrics, patterns, bespoke prints and artisanal embroidery that distinguishes its product in the marketplace. Johnny
Was products can be found on the Johnny Was website, johnnywas.com, and in our full-price retail stores as well as select
department stores and specialty stores. During Fiscal 2023, approximately 90% of the net sales of Johnny Was were for
women’s apparel, with the remaining sales consisting of Johnny Was accessories, including home products, shoes, scarves,
handbags, and jewelry.
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Direct to Consumer Operations
The Johnny Was direct to consumer distribution channel, which consists of e-commerce operations and the
Johnny Was retail stores, represented 79% of the Johnny Was net sales in Fiscal 2023. A key element of the Johnny Was
strategy is the johnnywas.com website, which generated $84 million of net sales, or 41% of the net sales of Johnny Was, in
Fiscal 2023. Another key component of our Johnny Was direct to consumer strategy is to operate our own Johnny Was
stores, which represented 38% of the net sales of Johnny Was in Fiscal 2023.
Our full-price retail store strategy for the Johnny Was brand includes operating full-price retail stores in higher-
end lifestyle shopping centers and malls, resort destinations and brand-appropriate street locations. As of February 3, 2024,
about 75% of the Johnny Was full-price stores were located in lifestyle centers, open air shopping environments or street
front locations with the remaining 25% of locations in indoor regional malls. Full-price retail store sales per gross square
foot for Johnny Was for Fiscal 2023 were approximately $664. Full-price retail store sales per gross square foot for Johnny
Was were approximately $740 for the full-price retail stores which were open the full 12 months ended January 28, 2023.
Our Johnny Was outlet stores are generally located in outlet shopping centers that include other upscale retailers
and serve an important role in overall inventory management by often allowing us to sell discontinued and out-of-season
products at better prices than are otherwise available from outside parties.
The table below provides certain information regarding Johnny Was direct to consumer locations as of February 3,
2024.
California
Florida
Texas
New York
Other states
Total
Average square feet per store
Total square feet at year end
Full-Price
Retail Stores
Outlet Stores
Total
17
8
8
4
35
72
1,600
117,000
2
1
—
—
—
3
1,400
4,200
19
9
8
4
35
75
During Fiscal 2023, 28%, 14% and 13% of the retail store sales of Johnny Was were in stores located in
California, Texas and Florida, respectively. During Fiscal 2023, including e-commerce sales, California, Texas, and Florida
represented 23%, 14% and 11%, respectively, of our total Johnny Was direct to consumer sales.
The table below reflects the changes in store count for Johnny Was during Fiscal 2023.
Open as of beginning of fiscal year
Opened
Closed
Open as of end of fiscal year
Full-Price
Retail Stores
Outlet Stores
Total
65
10
(3)
72
2
1
—
3
67
11
(3)
75
Currently, we expect to open approximately 10 new full-price retail stores in Fiscal 2024. During Fiscal 2024, we
anticipate opening full-price retail stores across the country including stores in California, Florida, Idaho, Missouri,
Massachusetts and New York. We believe that in Fiscal 2024, we may relocate or close a limited number of locations at
lease expiration, or sooner based on store performance. The construction or relocation of retail stores requires a greater
amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs. The cost to build
out a Johnny Was retail store is typically less than $0.5 million. In addition to new store openings, we also incur capital
expenditure costs related to remodels or expansions of existing stores, particularly when we renew or extend a lease
beyond the original lease term, or otherwise determine that a remodel of a store is appropriate.
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Wholesale Operations
To complement our direct to consumer operations and have access to a larger group of consumers, we maintain
wholesale operations for Johnny Was. These wholesale operations are primarily with better independent specialty and
department stores and multi-branded e-commerce retailers that generally follow a retail model approach with limited
discounting. During Fiscal 2023, 21% of the net sales of Johnny Was were sales to wholesale customers and approximately
40% and 35% of the wholesale sales of Johnny Was were to specialty stores and department stores, respectively. The
remaining wholesale sales were primarily to off-price retailers and retailers in countries outside of the United States. Net
sales to the 10 largest wholesale customers of Johnny Was represented 10% of the net sales of Johnny Was during Fiscal
2023 with its largest customer representing less than 5% of Johnny Was’ net sales.
Emerging Brands
Emerging Brands, which was organized in Fiscal 2022, consists of the operations of our smaller, earlier stage
Southern Tide, TBBC, Duck Head and Jack Rogers brands. Investments in smaller lifestyle brands that are unconsolidated
entities are included within Emerging Brands. Each of the brands included in Emerging Brands designs, sources, markets
and distributes apparel and related products bearing its respective trademarks and is supported by Oxford’s emerging
brands team that provides certain support functions to the smaller brands, including marketing and advertising execution,
analysis and other functions. The shared resources provide for operating efficiencies and enhanced knowledge sharing
across the brands. We acquired Southern Tide in 2016, Duck Head in 2016, TBBC in 2017 and Jack Rogers, a footwear
brand, in 2023.
The table below reflects the net sales (in thousands) for Fiscal 2023 by brand for each brand included in Emerging
Brands.
Southern Tide
TBBC
Duck Head
Jack Rogers (1)
Total Emerging Brands net sales
$
$
Fiscal 2023
69,017
43,524
12,780
1,504
126,825
(1) The Jack Rogers business was acquired during the Fourth Quarter of Fiscal 2023 and reflects activity from the
acquisition date through February 3, 2024.
their products on
The brands distribute
their brand-specific e-commerce websites, southerntide.com,
thebeaufortbonnetcompany.com, duckhead.com and jackrogersusa.com, as well as wholesale channels of distribution for
each brand that may include independent specialty retailers, better department stores and brand specific Signature Stores.
During Fiscal 2023, the majority of the net sales of both Southern Tide and Duck Head were wholesale sales, while the
majority of TBBC and Jack Rogers sales were direct to consumer sales.
Also, a key component of our Southern Tide and TBBC growth strategy is to expand our direct to consumer retail
store operations after both brands opened their first retail store locations in recent years. The table below provides certain
information regarding the Emerging Brands direct to consumer locations as of February 3, 2024.
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Florida
South Carolina
Massachusetts
North Carolina
Other states
Total
Average square feet per store
Total square feet at year end
Southern Tide
TBBC
9
3
3
2
2
19
1,600
30,000
2
1
—
—
—
3
1,400
4,200
Total Emerging Brands
11
4
—
2
2
22
The table below reflects the changes in direct to consumer location count for Emerging Brands during Fiscal
2023.
Open as of beginning of fiscal year
Opened / Acquired
Closed
Open as of end of fiscal year
Southern Tide
TBBC
6
13
—
19
3
—
—
3
Total Emerging Brands
9
13
—
22
We opened a total of 13 new Southern Tide stores during Fiscal 2023, including the acquisition of three former
Southern Tide signature stores located in Massachusetts during the First Quarter of Fiscal 2023 and three additional former
signature stores in the Fourth Quarter of Fiscal 2023, two of which are in South Carolina and one in Georgia. We also
opened a total of seven stores in Florida, South Carolina, North Carolina and Texas. During Fiscal 2024, we expect to open
approximately 10 additional Southern Tide stores, with stores in Florida, Texas, Alabama, Virginia and New York.
Additionally, for TBBC, we anticipate opening at least one new store during Fiscal 2024. We continue to look at additional
opportunities for new full-price store locations for both Southern Tide and TBBC. The operation of full-price retail stores
requires a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating
costs. We anticipate that most future retail store openings for Southern Tide and TBBC will generally be approximately
1,500 to 2,000 square feet; however, the determination of actual size of the store will depend on a variety of criteria,
including the potential opportunities that become available.
Lanier Apparel
In Fiscal 2021, we exited our Lanier Apparel business, which had been focused on moderately priced tailored
clothing and related products. This decision aligns with our stated business strategy of developing and marketing
compelling lifestyle brands. It also took into consideration the increased macroeconomic challenges faced by the Lanier
Apparel business, many of which were magnified by the COVID-19 pandemic. The operating results of the Lanier Apparel
business in Fiscal 2021 largely consisted of activities associated with the wind down of operations following our Fiscal
2020 decision to exit the business. Refer to Note 12 and Note 2 of our consolidated financial statements included in this
report for additional information about the Lanier Apparel exit and Fiscal 2021 operating results.
Corporate and Other
Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices,
substantially all financing activities, the elimination of inter-segment sales, any other items that are not allocated to the
operating groups, including LIFO inventory accounting adjustments as our LIFO pool does not correspond to our operating
group definitions, the operations of our Lyons, Georgia distribution center, our Oxford America business, which generated
net sales of $1 million and was exited in Fiscal 2022, and our initial $8 million minority ownership interest in a property in
Indian Wells, California that was converted and rebranded in Fiscal 2023 as the Tommy Bahama Miramonte Resort & Spa.
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TRADEMARKS
We own trademarks, many of which are very important and valuable to our business, including Tommy Bahama®,
Lilly Pulitzer®, Johnny Was®, Southern Tide®, The Beaufort Bonnet Company®, Duck Head® and Jack Rogers®.
Generally, our trademarks are subject to registrations and pending applications throughout the world for use on apparel and,
in some cases, apparel-related products, accessories and home furnishings, as well as in connection with retail services. We
continue to evaluate our worldwide usage and registration of our trademarks. In general, trademarks remain valid and
enforceable as long as the trademarks are used in connection with our products and services in the relevant jurisdiction and
the required registration renewals are filed. Important factors relating to risks associated with our trademarks include, but
are not limited to, those described in Part I, Item 1A. Risk Factors.
ADVERTISING AND MARKETING
During Fiscal 2023, we incurred $105 million, or 7% of net sales, of advertising expense. Advertising and
marketing are an integral part of the long-term strategy for our lifestyle brands, and we therefore devote significant
resources to these efforts. Thus, we believe that it is very important that our brands communicate regularly with consumers
about product offerings or other brand events in order to maintain and strengthen connections with consumers. Our
advertising emphasizes the respective brand’s image and lifestyle and attempts to engage individuals within the target
consumer demographic and guide them on a regular basis to our e-commerce websites, direct to consumer locations or
wholesale customers’ stores and websites in search of our products.
We increasingly utilize digital marketing, social media and email, and continue to use traditional direct mail
communications, to interact with our consumers. We vary our engagement tactics to elevate the consumer experience as we
attract new consumers, drive conversion, build loyalty, activate consumer advocacy and address the transformation of
consumer shopping behaviors. Our creative marketing teams design and produce imagery and content, social media
strategies and email and print campaigns designed to inspire the consumer and drive traffic to the brand. We attempt to
increase our brand awareness through a strategic emphasis on technology and the elevation of our digital presence which
encompasses e-commerce, mobile e-commerce, digital media, social media and influencer marketing. In this environment
where many people are digital-first consumers, we continue to enhance our approach to digital marketing and invest in
analytical capabilities to promote a more personalized experience across our distribution channels. At the same time, we
continue to innovate to better meet consumer online shopping preferences (e.g. loyalty, ratings and reviews and mobile
phone applications) and build brand equity. The ongoing trend towards a digital first consumer provided a catalyst for
accelerating the implementation of new direct to consumer business models and consumer engagement programs, such as
selling through social media.
Marketing initiatives in our direct to consumer operations may include special event promotions, including loyalty
award card, Flip Side, Friends & Family and gift with purchase events and a variety of public relations activities designed
to create awareness of our brands and products, drive traffic to our websites and stores, convert new consumers and
increase demand and loyalty. Our various initiatives are effective in increasing online and in-store traffic resulting in the
proportion of our sales that occur during our promotional marketing initiatives, such as Tommy Bahama’s Friends &
Family events, increasing in recent years, which puts some downward pressure on our direct to consumer gross margins.
Our marketing may also include sponsorships, collaborations, and co-branding initiatives, which may be for a
particular cause or non-profit organization that is expected to resonate with target consumers. For certain of our wholesale
customers, we may also provide point-of-sale materials and signage to enhance the presentation of our products at their
retail locations and/or participate in cooperative advertising programs.
PRODUCT DESIGN
We believe that one of the key competitive factors in the apparel industry is the design of differentiated,
innovative or otherwise compelling product that resonates with our target consumers. Our ability to compete successfully
in the apparel industry is dependent on our proficiency in foreseeing changes and trends in fashion and consumer
preference and presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand
operations strive to provide exciting, differentiated products each season.
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Each of our lifestyle brands’ products are designed and developed by dedicated brand-specific teams who focus
on the target consumer for the respective brand. The design process includes feedback from buyers, consumers and sales
agents, along with market trend research. Our apparel products generally incorporate fabrics made of cotton, silk, linen,
polyester, cellulosic fibers, leather and other natural and man-made fibers, or blends of two or more of these materials.
PRODUCT SOURCING
We intend to maintain flexible, diversified, cost-effective sourcing operations that provide high-quality apparel
and related products. Our operating groups, either internally, using in-house employees located in the United States and/or
Hong Kong, or through the use of third-party vendors or buying agents, manage the production and sourcing of
substantially all of our apparel and related products from non-exclusive, third party producers located in foreign countries.
Although we place a high value on long-term relationships with our suppliers of apparel and related products and
have used many of our suppliers for a number of years, we do not have long-term contracts with our suppliers. Instead, we
conduct business on an order-by-order basis. Thus, we compete with other companies for the production capacity of
independent manufacturers. We believe that this approach provides us with the greatest flexibility in identifying the
appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria. During Fiscal
2023, we purchased our products from approximately 260 suppliers, with a significant concentration of suppliers in Asia.
Our 10 largest suppliers provided approximately one-third of our product purchases. During Fiscal 2023, no individual
third party manufacturer, licensee or other supplier provided more than 10% of our product purchases in total. We generally
acquire products sold in our food and beverage operations from various third party domestic suppliers.
During Fiscal 2023, approximately 41% and 23% of our apparel and related products acquired directly by us or
via vendors or buying agents, were from producers located in China and Vietnam, respectively, with no other country
representing more than 10% of such purchases. Johnny Was, which was acquired in 2022, sources approximately 90% of
its products from China. While we have and will continue to work on diversifying our supplier base and reducing the
concentration of manufacturing from China in the future, the majority of fibers included in our apparel and other products
currently originate in China even if the products are manufactured elsewhere.
We purchase our apparel and related products from third-party producers, substantially all as package purchases of
finished goods. These products are manufactured to our design and fabric specifications with oversight by us or our third-
party vendors or buying agents. The use of third-party producers reduces the amount of capital investment required by us,
as operating manufacturing facilities requires a significant amount of capital investment, labor and oversight. We depend
on third-party producers to secure a sufficient supply of specified raw materials, adequately finance the production of
goods ordered and maintain sufficient manufacturing and shipping capacity. We believe that purchasing substantially all of
our products as package purchases allows us to reduce our working capital requirements as we are not required to purchase,
or finance the purchase of, the raw materials or other production costs related to our apparel and related product purchases
until we take ownership of the finished goods, which typically occurs when the goods are shipped by the third-party
producers.
As the manufacture and transportation of apparel and related products for our brands may take as many as six
months for each season, we typically make commitments months in advance of when products will arrive in our full-price
retail stores or our wholesale customers’ stores. As our merchandising departments must estimate our requirements for
finished goods purchases for our own full-price retail stores and e-commerce sites based on historical product demand data
and other factors, and as purchases for our wholesale accounts must be committed to prior to the receipt of all wholesale
customer orders, we carry the risk that we have purchased more inventory than will ultimately be desired or that we will
not have purchased sufficient inventory to satisfy demand, resulting in lost sales opportunities.
CORPORATE RESPONSIBILITY
We recognize that our business operations throughout the value chain impact people and the environment and
believe that, as a leading apparel company, we have a responsibility to reduce those impacts. Our Board is ultimately
charged with overseeing the risks to our business on behalf of our shareholders, and we believe that our Board’s active
involvement in oversight of environmental, social and governance (“ESG”) initiatives affords us tremendous benefits. We
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report routinely to our Board and/or various Board committees about ESG risks and strategies and communicate insights
provided by our directors to our brands to assist in formulating ESG goals and initiatives.
Reducing our Impact
We are committed to identifying and executing commercially viable corporate responsibility initiatives in
furtherance of a safer, more sustainable world. To support this objective, we organized a new Corporate Responsibility
team at the end of Fiscal 2022 to efficiently manage environmental sustainability, social responsibility and traceability
across the enterprise. Drawing on existing expertise from our Tommy Bahama initiatives, the new function ensures a
consistent approach to corporate responsibility across our brands. The team reports to our General Counsel, with input
from our Executive Leadership Team, and will focus in the immediate future on assessing corporate responsibility risks and
opportunities, establishing baseline metrics and objectives and collaborating with our brands on potential brand-specific
initiatives.
As part of our commitment to source our products in a lawful, ethical and socially responsible manner, we have
implemented a supplier corporate responsibility program applicable to vendors and producers from whom we purchase
apparel and related products. The program includes a comprehensive Supplier Code of Conduct that requires compliance
with applicable laws as well as other international business and ethical standards, including related human rights, health,
safety, working conditions, environmental and other requirements. We also require all vendors from whom we purchase
goods to adhere to the United States Customs and Border Protection’s Customs Trade Partnership Against Terrorism
program, including standards relating to facility, procedural, personnel and cargo security.
We monitor compliance with our Supplier Code of Conduct and applicable laws and regulations through social
assessments performed by credible third parties and require our suppliers to partner with us to remediate issues identified.
Social assessments of our tier 1 and strategic tier 2 producers are required annually or more frequently. In the event we
determine that a supplier cannot or will not remediate issues, we will discontinue use of the supplier.
We also continue to participate in various trade associations and organizations to drive industry-wide collective
action and ensure we remain informed about emerging laws, risks, opportunities and best practices. We are an active
member of the American Apparel & Footwear Association (AAFA) and in 2023, we transitioned Tommy Bahama’s
membership in Cascale (formerly the Sustainable Apparel Coalition) to an enterprise-wide membership to support each of
our brands in their journeys toward more responsible production. Additionally, various combinations of our brands are
members of the Textile Exchange, Better Cotton, and the Good Cashmere Standard by the Aid by Trade Foundation to
further our adoption of preferred materials.
ENRICHING OUR COMMUNITIES
Since our founding in 1942, we have prided ourselves on being model citizens for the communities in which we
operate. We focus our community initiatives on programs that can impact a broad set of constituents where we operate.
Our community partners include the United Way of Greater Atlanta, the Woodruff Arts Center and Grady Hospital, and
each of our operating groups partners with organizations improving quality of life in the communities where our customers
and employees live and work.
In 2020, we announced the launch of the Oxford Educational Access Initiative to further our goal of reducing
economic and racial inequality through access to education. We believe that every child, regardless of race or economic
circumstance, deserves the chance to learn and be successful. Over the course of four years beginning in 2021, we have
committed to fund an aggregate of $1 million to community organizations with innovative program models that address a
broad spectrum of educational challenges that children in underserved communities face. Each of our brands has selected
recipient organizations that are working to address disparities in educational access and barriers to success for children in
our local communities.
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IMPORT RESTRICTIONS AND OTHER GOVERNMENT REGULATIONS
We are exposed to certain risks as a result of our international operations as substantially all of our merchandise,
as well as the products purchased by our licensing partners, is manufactured by foreign suppliers. Products imported by us,
or imported by others and ultimately sold to us, are subject to customs, trade and other laws and regulations governing their
entry into the United States and other countries where we sell our products, including various federal, state, local and
foreign laws and regulations that govern any of our activities that may have adverse environmental, health and safety
effects. Noncompliance with these laws and regulations may result in significant monetary penalties.
Substantially all of the merchandise we acquire is subject to certain duties which are assessed on the value of the
imported product. These amounts represent a component of the inventories we sell and are included in cost of goods sold in
our consolidated statements of operations. We paid total duties of $58 million on products imported into the United States
directly by us in Fiscal 2023, with the average duty rate on those products of approximately 19% of the value of the
imported product in Fiscal 2023. Duty rates vary depending on the type of garment, fiber content and country of origin and
are subject to change in future periods. In addition, while the World Trade Organization’s member nations have eliminated
quotas on apparel and textiles, the United States and other countries into which we import our products are still allowed in
certain circumstances to unilaterally impose "anti-dumping" or "countervailing" duties in response to threats to their
comparable domestic industries.
Although we have not been materially inhibited from sourcing products from desired markets in the past, we
cannot assure that significant impediments will not arise in the future as we expand product offerings and enter into new
markets. In recent years the United States government has implemented additional duties on certain product categories
across various industries. It is possible that additional duty increases could occur in future years, which could have a
significant unfavorable impact on the apparel retail industry and our cost of goods sold, operations, net sales, net earnings
and cash flows. Our management regularly monitors proposed regulatory changes and the existing regulatory environment,
including any impact on our operations or on our ability to import products. As a result of these changes and increased
costs of production in certain countries that unfavorably impact our cost of goods sold, we continue to make changes in our
supply chain, including exiting certain factories and sourcing those products from a factory in a different foreign country.
In addition, apparel and other related products sold by us are subject to stringent and complex product
performance and security and safety standards, laws and other regulations. These regulations relate principally to product
labeling, product content, certification of product safety and importer security procedures. We believe that we are in
material compliance with those regulations. Our licensed products and licensing partners are also generally subject to such
regulations.
Important factors relating to risks associated with government regulations, including forced labor laws, include
those described in Part I, Item 1A. Risk Factors.
DISTRIBUTION CENTERS
We operate a number of distribution centers. Our Auburn, Washington, King of Prussia, Pennsylvania and Los
Angeles, California distribution centers serve our Tommy Bahama, Lilly Pulitzer and Johnny Was operating groups,
respectively. Additionally, a third-party distribution center in Los Angeles, California provides distribution services for the
Johnny Was e-commerce operations. Our Lyons, Georgia distribution center provides primary distribution services for our
smaller Southern Tide, TBBC and Duck Head businesses, as well as certain distribution services for our Lilly Pulitzer and
Tommy Bahama businesses.
In Fiscal 2023, we began a multi-year Southeastern United States distribution center enhancement project in
Lyons, Georgia to build a new facility to ensure best-in-class direct-to-consumer throughput capabilities for our brands.
The new facility will provide direct to consumer support for all of our brands, including the East Coast operations of
Tommy Bahama. We anticipate total capital expenditures in excess of $130 million over the life of the project, with the
majority of the spend occurring in Fiscal 2024, and expect completion of the new facility in the Second Half of Fiscal
2025.
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Activities at the distribution centers include receiving finished goods from suppliers, inspecting the products and
shipping the products to our retail store, e-commerce and wholesale customers, as applicable. We seek to maintain
sufficient levels of inventory at the distribution centers to support our direct to consumer operations, as well as pre-booked,
at-once and some in-stock replenishment orders for our wholesale customers. We use a local third party distribution center
for our Tommy Bahama Australia operations.
In Fiscal 2023, 80% of our net sales were direct to consumer sales, which are filled on a current basis;
accordingly, an order backlog is not material to our business.
INFORMATION TECHNOLOGIES
We believe that sophisticated information systems and functionality are important components of maintaining our
competitive position and supporting continued growth of our businesses, particularly in the ever-changing consumer
shopping environment. Our information systems are designed to provide effective retail store, e-commerce, food and
beverage and wholesale operations while emphasizing efficient point-of-sale, distribution center, design, sourcing, order
processing, marketing, customer relationship management, accounting and other functions. We periodically evaluate the
adequacy of our information technologies and upgrade or enhance our systems to gain operating efficiencies, to provide
additional consumer access and to support our anticipated growth as well as other changes in our business. We believe that,
where possible, continuous upgrading and enhancements to our information systems with newer technology that offers
greater efficiency, functionality and reporting capabilities is critical to our operations and financial condition.
LICENSING AND OTHER DISTRIBUTION ARRANGEMENTS
We license certain of our trademarks, including the Tommy Bahama and Lilly Pulitzer names, to licensees in
categories beyond our brands’ core product categories. We believe licensing is an attractive business opportunity for our
larger lifestyle brands. Once a brand is more fully established, licensing typically requires modest additional investment but
can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure. In
evaluating a licensee for our brands, we consider the candidate’s experience, financial stability, sourcing expertise and
marketing ability. We also evaluate the marketability and compatibility of the proposed licensed products with the brand
image and our own products.
Our agreements with our licensees are brand specific, relate to specific geographic areas and have expirations at
various dates in the future, with contingent renewal options in limited cases. Generally, the agreements require minimum
royalty payments as well as royalty payments based on specified percentages of the licensee’s net sales of the licensed
products as well as certain obligations for advertising and marketing. Our license agreements generally provide us the right
to approve all products, advertising and proposed channels of distribution.
We license the Tommy Bahama brand for a broad range of product categories including indoor furniture, outdoor
furniture, beach chairs, bedding and bath linens, fabrics, leather goods and gifts, headwear, hosiery, sleepwear, shampoo,
toiletries, fragrances, cigar accessories, distilled spirits, resort operations and other products. Third party license
arrangements for Lilly Pulitzer products include stationery and gift products; home furnishing products; and eyewear.
In addition to our license arrangements for the specific product categories listed above, we may enter into certain
international distributor agreements which allow third parties to distribute apparel and other products on a wholesale and/or
retail basis within certain countries or regions. As of February 3, 2024, we have agreements for the distribution of Tommy
Bahama products in the Middle East and parts of Latin America. The products sold by the distributors generally are
identical to the products sold in our own Tommy Bahama stores. In addition to selling Tommy Bahama goods to wholesale
accounts, the distributors may, in some cases, operate a limited number of their own retail stores. Additionally, we have
arrangements for distribution of Johnny Was products in certain countries. None of our international distributor agreements
are expected to generate growth that would materially impact our operating results in the near term.
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SEASONAL ASPECTS OF BUSINESS
Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by
distribution channel, may vary significantly depending on the time of year. As a result, our quarterly operating results and
working capital requirements fluctuate significantly from quarter to quarter. Typically, the demand for products for our
larger brands is higher in the spring, summer and holiday seasons and lower in the fall season (the third quarter of our fiscal
year). Thus, our third quarter historically has had the lowest net sales and net earnings compared to other quarters. Further,
the impact of certain unusual or non-recurring items, economic conditions, our e-commerce flash clearance sales,
wholesale product shipments, weather, acquisitions or other factors affecting our operations may vary from one year to the
next. Therefore, due to the potential impact of these items, we do not believe that net sales or operating income by quarter
in Fiscal 2023 are necessarily indicative of the expected proportion of amounts by quarter for future periods.
HUMAN CAPITAL MANAGEMENT
Our key strategy is to own brands that make people happy, and we recognize that successful execution of our
strategy starts with people. We believe treating people fairly and with respect is key to long-term success and, more
importantly, is simply the right thing to do.
As of February 3, 2024, we employed over 6,000 individuals globally, more than 96% of whom were in the
United States. Approximately 77% of our employees were retail store and food and beverage employees. Our employee
base fluctuates during the year, as we typically hire seasonal employees to support our retail store and food and beverage
operations, primarily during the holiday selling season. None of our employees as of February 3, 2024 were represented by
a union.
Commitment to our Core Values
Our actions are guided by our company’s core values:
● Integrity – Build trust through honest relationships. Do the right thing.
● Respect – Have respect for oneself and for one another. Lead by example. Exercise humility.
● Inclusion – Root our relationships with one another in understanding, awareness and mutual respect. Value
and embrace diversity. Welcome the respectful, open expression of differing ideas and perspectives.
● Accountability – Own our words, decisions and actions. Earn our reputation.
● Teamwork – Show up for each other. Solve problems through good and transparent communication. Know
we are strongest when we work as a team.
● Curiosity – Improve and innovate. Simplify and streamline. Embrace change. Challenge ourselves.
We believe that our adherence to these core values in everything we do as a company furthers our good relations
with employees, suppliers and customers.
Commitment to Human Rights and our Code of Conduct
We are committed to respecting human rights in our business operations, including throughout our supply chain
and product life cycle. As part of our supplier audit processes, we conduct human rights due diligence to identify risks and
work to mitigate them, and our Supplier Code of Conduct sets forth minimum social responsibility requirements to ensure
that the human rights of all people in our value chain are respected. We do not tolerate harassment, discrimination, violence
or retaliation of any kind.
Our Code of Conduct applies to all employees, officers and directors in our organization and addresses, among
other topics, compliance with laws, avoiding conflicts of interest, gifts and entertainment, bribery and kickbacks, anti-
discrimination and anti-harassment and reporting misconduct. Our General Counsel takes responsibility for reviewing and
refreshing our Code of Conduct; educating our team members about our expectations; and, as applicable, enforcing the
Code of Conduct. All employees at the time of hire are required to read and certify compliance with the Code of Conduct
and are given an opportunity to ask questions.
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Talent and Development
We are always looking for great people to join our team. We recognize that in order to remain competitive, we
must attract, develop and retain top caliber employees in our design, marketing, merchandising, information technology
and other functions, as well as in our direct to consumer locations and distribution centers. Competition for talented
employees is intense.
In furtherance of attracting and retaining employees committed to our core values and business strategy, we
maintain competitive compensation programs that include a variety of components, including competitive pay consistent
with skill level, experience and knowledge, as well as comprehensive benefit plans consisting of health and welfare plans,
retirement benefits and paid leave for our employee base in the United States.
We continue to assess how well we are doing in managing performance, developing our people and putting our
talent to its highest and best use across our company. Our aim is greater employee engagement and ultimately a more
effective organization. As part of our commitment to our people, throughout our brands and businesses, we provide
employees with training, growth and development opportunities, including on-the-job training, learning and development
programs, and other educational programs. Outside of the United States, we work with outside partners familiar with the
local markets and laws to ensure our rewards are competitive within that jurisdiction and support employee well-being.
Diversity & Inclusion
Our ongoing commitment to having the best people includes a commitment to equal opportunity. We believe in a
diverse and inclusive workplace that respects and invites differing ideas and perspectives. We have a number of initiatives
to ensure that our hiring, retention and advancement practices promote fair and equal opportunities across our workforce
and ensure that we will have the best people in the industry to support our businesses going forward.
Our diversity and inclusion strategies begin at the recruiting stage, where we seek to attract and hire the most
qualified candidates possible, without regard to race, ethnicity, national origin, gender, age, sexual orientation, genetics or
other protected characteristics. We reinforce our values and goals through our Code of Conduct and other workplace
policies, with an anonymous, confidential ethics hotline that allows our employees to voice concerns. We also seek to
ensure that our pay and rewards programs and advancement opportunities are consistent with our culture of equality.
As of February 3, 2024, our domestic workforce, which comprised over 96% of our employee population, was
self-disclosed as 34% male, 66% female and less than 1% undisclosed or choosing not to identify. Among our
management employees, who comprise approximately 19% of our workforce, the self-disclosed figures were 29% male,
71% female and less than 1% undisclosed or choosing not to identify. As of February 3, 2024, the self-disclosed ethnicity
of our domestic workforce was 59% white (not Hispanic or Latino) and 41% non-white, whereas for management
employees, the self-disclosed ethnicity figures were 71% white (not Hispanic or Latino) and 29% non-white.
INFORMATION
Oxford Industries, Inc. is a Georgia corporation originally founded in 1942. Our corporate headquarters are
located at 999 Peachtree Street, N.E., Ste. 688, Atlanta, Georgia 30309. Our internet address is oxfordinc.com. Copies of
our annual report on Form 10-K, proxy statement, quarterly reports on Form 10-Q and current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended, are available free of charge on our website the same day that they are electronically filed with the SEC. We
also use our website as a means of disclosing additional information, including for complying with our disclosure
obligations under the SEC’s Regulation FD (Fair Disclosure). The information on our website is not and should not be
considered part of this Annual Report on Form 10-K and is not incorporated by reference in this document.
Item 1A. Risk Factors
The risks described below highlight some of the factors that could materially affect our operations. If any of these
risks actually occurs, our business, financial condition, prospects and/or operating results may be adversely
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affected. These are not the only risks and uncertainties we face. Additional risks and uncertainties that we currently
consider immaterial or are not presently known to us may also adversely affect our business.
Risks Related to our Industry and Macroeconomic Conditions
Our business and financial condition are heavily influenced by general economic and market conditions which are
outside of our control.
We are a consumer products company and are highly dependent on consumer discretionary spending and retail
traffic patterns, particularly in the United States. The demand for apparel products changes as regional, domestic and
international economic conditions change and may be significantly impacted by trends in consumer confidence and
discretionary consumer spending patterns. These trends may be influenced by employment levels; recessions; inflation and
elevated interest rates; fuel and energy costs; tax rates; personal debt levels; savings rates; stock market and housing market
volatility; shifting social ideology; concerns about the political and economic climate; and general uncertainty about the
future. The factors impacting consumer confidence and discretionary consumer spending patterns are outside of our control
and difficult to predict, and, often, the apparel industry experiences longer periods of recession and greater declines than
the general economy.
Recently, the U.S. economy has been impacted by elevated inflation rates, which has created a complex and
challenging retail environment that has affected consumer spending and consumer preferences. In Fiscal 2023 and
continuing into Fiscal 2024, the prevailing macroeconomic concerns have led to conservative purchase order decisions for
future seasons by many of our wholesale customers. A decline in consumer confidence or change in discretionary
consumer spending could reduce our sales, increase our inventory levels, result in more promotional activities and/or lower
our gross margins, any or all of which may adversely affect our business and financial condition.
We operate in a highly competitive industry with significant pricing pressures and heightened customer expectations.
We operate in a highly competitive industry in which the principal competitive factors are the reputation, value and
image of brand names; design of differentiated, innovative or otherwise compelling product; consumer preference; price;
quality; marketing (including through rapidly shifting digital and social media vehicles); product fulfillment capabilities;
and customer service. The highly competitive apparel industry is characterized by low barriers to entry, with new
competition entering the marketplace regularly. There are numerous domestic and foreign apparel designers, distributors,
importers, licensors and retailers. Some of these companies may be significantly larger or more diversified than us and/or
have significantly greater financial resources than we do.
Competition in the apparel industry is particularly enhanced in the digital marketplace for our rapidly growing e-
commerce businesses, where there are new entrants in the market, greater pricing pressure and heightened customer
expectations and competitive pressure related to, among other things, customer engagement, delivery speed, shipping
charges and return privileges. In addition, fast fashion, value fashion and off-price retailers, as well as the more recent
declines in spending within the consumer and retail sector, have contributed to additional promotional pressure. These and
other competitive factors within the apparel industry may result in reduced sales, increased costs, lower prices for our
products and/or decreased margins.
Failure to anticipate and adapt to changing fashion trends and consumer preferences could harm our reputation and
financial performance.
We believe that our ability to compete successfully is directly related to our proficiency in foreseeing changes and
trends in fashion and consumer preference and presenting appealing products for consumers when and where they seek
them. Although certain of our products carry over from season to season, the apparel industry is subject to rapidly changing
fashion trends and shifting consumer expectations. The increasing shift to digital brand engagement and social media
communication, as well as the attempted replication of our products by competitors, presents emerging challenges for our
business. The apparel industry is also impacted by changing consumer preferences regarding spending categories generally,
including shifts away from traditional consumer product spending and towards “experiential” spending and sustainable
products. There can be no assurance that we will be able to successfully evaluate and adapt our products to
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align with evolving trends. Any failure on our part to develop and market appealing products could harm the reputation and
desirability of our brands and products and/or result in weakened financial performance.
Our operations and those of our suppliers, vendors and wholesale customers may be affected by changes in weather
patterns, natural or man-made disasters, public health crises, war, terrorism or other catastrophes.
Our sales volume and operations and the operations of third parties on whom we rely, including our suppliers,
vendors, licensees and wholesale customers, may be adversely affected by unseasonable or severe weather conditions or
other climate-related events, natural or man-made disasters, hurricanes, public health crises, pandemics, war, terrorist
attacks, including heightened security measures and responsive military actions, or other catastrophes which may cause
consumers to alter their purchasing habits or result in a disruption to our operations, such as the damage to, and temporary
closure of, our Tommy Bahama restaurant and retail store in Naples, Florida due to Hurricane Ian in September 2022 and
the destruction of our Tommy Bahama Marlin Bar in Lahaina, Hawaii by wildfires in August 2023. Our business may also
be adversely affected by instability, disruption or destruction, regardless of cause. These events may result in closures of
our retail stores, restaurants, offices or distribution centers and/or declines in consumer traffic, which could have a material
adverse effect on our business, results of operations or financial condition. Because of the seasonality of our business, the
concentration of a significant proportion of our retail stores and wholesale customers in certain geographic regions,
including a resort and/or coastal focus for most of our lifestyle brands, and the concentration of our sourcing and
distribution center operations, the occurrence of such events could disproportionately impact our business, financial
condition and operating results.
The ongoing war between Russia and Ukraine and the ongoing war between Israel and Hamas have adversely
affected the global economy and resulted in economic sanctions, geopolitical instability and market disruption. Although
we do not have operations or generate revenues in the impacted regions, the geopolitical tensions related to the wars could
result in broader impacts that expand into other markets, cyberattacks, supply chain and logistics disruptions, including
shipping disruptions in the Red Sea region, and lower consumer demand, any of which could have a material adverse effect
on our business and operations.
Risks Related to our Business Strategy and Operations
Failure to maintain the reputation or value of our brands could harm our business operations and financial condition.
Our success depends on the reputation and value of our brand names. The value of our brands could be diminished
by actions taken by us or by our licensees, wholesale customers or others who have an interest in our brands. Actions that
could cause harm to our brands include failing to respond to emerging fashion trends or meet consumer quality
expectations; selling products bearing our brands through distribution channels that are inconsistent with customer
expectations; becoming overly promotional; or setting up consumer expectations for promotional activity for our products.
In addition, social media is a critical marketing and customer acquisition and customer retention strategy in today’s
technology-driven retail environment, and the value of our brands could be adversely affected if we do not effectively and
accurately communicate our brand message through social media vehicles, including with respect to our social
responsibility and environmental sustainability initiatives. The concentration in our portfolio heightens the risks we face if
one of our larger brands is adversely impacted by actions we or third parties take with respect to that brand.
The improper or detrimental actions of a licensee or wholesale customer, including a third party distributor in an
international market, or for example, the operator of the Tommy Bahama Miramonte Resort & Spa, which opened in late-
2023 and is an unproven concept with previously untested brand and operating standards, could also significantly impact
the perception of our brands. While we enter into comprehensive license and similar collaborative agreements with third
party licensees covering product design, product quality, brand standards, sourcing, social compliance, distribution,
operations, manufacturing and/or marketing requirements and approvals, there can be no guarantee our brands will not be
negatively impacted through our association with products or concepts outside of our core apparel products and by the
market perception of the third parties with whom we associate. In addition, we cannot always control the marketing and
promotion of our products by our wholesale customers, and actions by such parties could diminish the value or reputation
of one or more of our brands and have an adverse effect on our sales, gross margins and business operations.
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The appeal of our brands may also depend on the perceived relevance and success of our initiatives related to
corporate responsibility and our commitments to operating our business in a socially responsible fashion. Risks related to
corporate responsibility include increased stakeholder focus on social and environmental sustainability matters, including
forced labor, chemical use, energy and water use, packaging and waste, animal welfare and land use. We may also be
required to incur substantial costs to comply with the amalgamation of differing or conflicting state, federal or international
laws or regulations or the rules of government agencies requiring disclosure of risks and initiatives related to corporate
responsibility and the collection, certification and disclosure of operational data, and any failure to comply with such
requirements could result in fines, penalties or negative public perception of our brands or drive decisions on whether we
can continue or expand our business in certain markets. We may also face increased pressure from stakeholders or the
public to voluntarily expand our disclosures, make commitments, set targets or establish additional goals and take actions
to meet them, which could expose us to market, operational and execution costs or risks. The metrics we disclose may not
meet stakeholder expectations and may impact our reputation and the value of our brands, and a failure to achieve progress
on our metrics on a timely basis, or at all, could adversely affect our business and financial performance.
Our inability to execute our direct to consumer and portfolio-level strategies in response to shifts in consumer shopping
behavior could adversely affect our financial results and operations.
One of our key long-term initiatives over the last several years has been to grow our branded businesses through
distribution strategies that allow our consumers to access our brands whenever and wherever they choose to shop. Our
ability to anticipate and transform our business in response to the manner in which consumers seek to transact business and
access products requires us to introduce new retail, restaurant and other concepts in suitable locations; anticipate and
implement innovations in sales and marketing technology to align with our consumers’ shopping preferences; invest in
appropriate digital and other technologies; establish the infrastructure necessary to support growth; maintain brand specific
websites and mobile applications that offer the functionality and security customers expect; and effectively enhance our
advertising and marketing activities, including our social media presence, to maintain our current customers and attract and
introduce new consumers to our brands and offerings.
For the last several years, the retail apparel market has been evolving very rapidly in ways that are disruptive to
traditional fashion retailers. These changes included declines in bricks and mortar retail traffic; entry into the fashion retail
space by large e-commerce retailers and others with significant financial resources and enhanced distribution capabilities;
increased costs to attract and retain consumers; increased investment in technology and multi-channel distribution
strategies by large, traditional bricks and mortar and big box retailers; ongoing emphasis on off-price and fast fashion
channels of distribution, in particular those who offer brand label products at clearance; and increased appeal for
consumers of products that incorporate sustainable materials and processes in the supply chain and/or otherwise reflect
their social or personal values. In response, fashion retailers and competing brands have increasingly offered greater
transparency for consumers in product pricing and engaged in increased promotional activities, both online and in-store.
These trends accelerated in recent years and are likely to continue to evolve in ways that may not yet be evident.
In response to these evolving and rapidly changing trends in consumer shopping behavior, we have made and
expect to continue to make significant investments in expanding our digital capabilities and technologies in three key areas:
mobile technology; digital marketing; and the digital customer experience. Although we have experienced significant
growth in our e-commerce businesses in recent years, there is no assurance that we will realize a return on these
investments, be successful in continuing to grow our e-commerce businesses over the long term or that any increase we
may see in net sales from our e-commerce business will not cannibalize, or be sufficient to offset any decreases in, net sales
from bricks and mortar retail stores. Any inability on our part to effectively adapt to rapidly evolving consumer behavioral
trends may result in lost sales, increase our costs and/or adversely impact our results of operations, financial condition,
reputation and credibility.
We may be unable to grow our business through organic growth, which could have a material adverse effect on our
business, financial condition, liquidity and results of operations.
A key component of our business strategy is organic growth in our brands. Organic growth may be achieved by,
among other things, increasing sales in our direct to consumer channels; selling our products in new markets; increasing
our market share in existing markets; expanding the demographic appeal of our brands; expanding our margins through
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product cost reductions, price increases or otherwise; expanding the customer reach of our brands through new and
enhanced advertising initiatives; and increasing the product offerings and concepts within our various operating groups.
Successful growth of our business is also subject to our ability to implement plans for expanding and/or maintaining our
existing businesses at satisfactory levels. We may not be successful in achieving suitable organic growth, and our inability
to grow our business may have a material adverse effect on our business, financial condition, liquidity and results of
operations.
In addition, investments we make in technology, advertising and infrastructure, retail stores and restaurants, office
and distribution center facilities, personnel and elsewhere may not yield the full benefits we anticipate, and sales growth
may be outpaced by increases in operating costs, putting downward pressure on our operating margins and adversely
affecting our results of operations. If we are unable to increase our revenues organically, we may be required to pursue
other strategic initiatives, including reductions in costs and/or acquisitions, which may inhibit our ability to increase
profitability.
The acquisition of new businesses is inherently risky, and we cannot be certain that we will realize the anticipated
benefits of any acquisition.
Growth of our business through acquisitions of lifestyle brands that fit within our business model is a key
component of our long-term business strategy, as evidenced by our acquisition of Johnny Was in Fiscal 2022.
Integrating an acquired business, regardless of the size of the acquired operations, is a complex, time-consuming
and expensive process. The integration process could create a number of challenges and adverse consequences for us
associated with the integration of product lines, support functions, employees, sales teams and outsourced manufacturers;
employee turnover, including key management and creative personnel of the acquired business and our existing businesses;
disruption in product cycles for newly acquired product lines; maintenance of acceptable standards, controls, procedures
and policies; operating a business in new geographic territories; diversion of the attention of our management from other
areas of our business; and the impairment of relationships with customers of the acquired and existing businesses. As a
result of these challenges or other factors, the benefits of an acquisition may not materialize to the extent or within the time
periods anticipated.
In addition, the competitive climate for desirable acquisition candidates drives higher market multiples, and we
may pay more to consummate an acquisition than the value we ultimately derive from the acquired business. Acquisitions
may cause us to incur debt or make dilutive issuances of our equity securities, and may result in certain impairment or
amortization charges in our statements of operations, as evidenced by the noncash impairment charges for goodwill and
intangible assets of $111 million recognized in Johnny Was in the Fourth Quarter of Fiscal 2023, which was driven by the
challenging macroeconomic environment and elevated interest rates during Fiscal 2023. Additionally, as a result of
acquisitions, we may become responsible for unexpected liabilities that we failed or were unable to discover in the course
of performing due diligence, or may incur material, unrecoverable costs to evaluate and pursue an acquisition that is
ultimately not consummated.
As the fashion retail environment evolves, our investment criteria for acquisitions has grown to include smaller
brands and non-controlling investments in burgeoning brands seeking debt or equity financing. The limited operating
history, less experienced management teams and less sophisticated systems, infrastructure and relationships generally
associated with such brands may heighten the risks associated with acquisitions generally. Minority investments present
additional risks, including the potential disproportionate distraction to our management team relative to the potential
financial benefit; the potential for a conflict of interest; the damage to our reputation of associating with a brand which may
take actions inconsistent with our values; and the financial risks associated with making an investment in an unproven
business model, including the potential for impairment charges such as the $2 million noncash impairment charges
recognized in Fiscal 2023 from our equity method investment in a smaller lifestyle brand that resulted from that entity,
which we do not control, forecasting continued, future losses.
The divestiture or discontinuation of businesses and product lines could result in unexpected liabilities and adversely
affect our financial condition, cash flows and results of operations.
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From time to time, we may also divest or discontinue businesses, product lines and/or wholesale relationships that
do not align with our strategy or provide the returns that we expect or desire. Such dispositions and/or discontinuations
may result in unexpected liabilities, which could adversely affect our financial condition and results of operations.
Our business could be harmed if we fail to maintain proper inventory levels.
Many factors, such as economic conditions, fashion trends, consumer preferences, the financial condition of our
wholesale customers and weather, make it difficult to accurately forecast demand for our products. In order to meet the
expected demand for our products in a cost-effective manner, we make commitments for production several months prior
to our receipt of goods and almost entirely without firm commitments from our customers. Depending on the demand for
our products, we may be unable to sell the products we have ordered or that we have in our inventory, which may result in
inventory markdowns or the sale of excess inventory at discounted prices and through off-price channels. These events
could significantly harm our operating results and impair the image of our brands. Conversely, if we underestimate the
timing or extent of demand for our products or if we are unable to access our products when we need them, for example
due to a third party manufacturer’s inability to source materials or produce goods in a timely fashion or as a result of delays
in the delivery of products to us, we may experience inventory shortages, which might result in lost sales, unfilled orders,
negatively impacted customer relationships, and diminished brand loyalty, any of which could harm our business. These
risks relating to inventory may also escalate as our direct to consumer sales, for which we do not have any advance
purchase commitments, continue to increase as a proportion of our consolidated net sales.
We are subject to risks associated with leasing real estate for our retail stores and restaurants.
We lease all of our retail store and restaurant locations. Successful operation of our retail stores and restaurants
depends, in part, on our ability to identify desirable, brand appropriate locations; the overall ability of the location to attract
a consumer base sufficient to make sales volume profitable; our ability to negotiate satisfactory lease terms and employ
qualified personnel; and our ability to timely construct and complete any build out and open the location in accordance
with our plans. A decline in the volume of consumer traffic at our retail stores and restaurants, due to economic conditions,
shifts in consumer shopping preferences or technology, a decline in the popularity of malls or lifestyle centers in general or
at those in which we operate, the closing of anchor stores or other adjacent tenants or otherwise, could have a negative
impact on our sales, gross margins and results of operations. Our growth may be limited if we are unable to identify new
locations with consumer traffic sufficient to support a profitable sales level or the local market reception to a new retail
store opening is inconsistent with our expectations.
Our retail store and restaurant leases generally represent long-term financial commitments, with substantial costs at
lease inception for a location’s design, leasehold improvements, fixtures and systems installation and recurring fixed costs.
On an ongoing basis, we review the financial performance of our retail and restaurant locations in order to determine
whether continued operation is appropriate. Even if we determine that it is desirable to exit a particular location, we may be
unable to close an underperforming location due to continuous use clauses and/or because negotiating an early termination
would be cost prohibitive. In addition, due to the fixed-cost structure associated with these operations, negative cash flows
or the closure of a retail store or restaurant could result in impairment of leasehold improvements, impairment of operating
lease assets and/or other long-lived assets, severance costs, lease termination costs or the loss of working capital, which
could adversely impact our business and financial results. Furthermore, as each of our leases expire and as competition and
rental rates for prime retail and restaurant locations continues to accelerate, as we have experienced in recent years, we may
be unable to negotiate renewals, either on commercially acceptable terms or at all, including as a result of shifts in how
shopping center operators seek to merchandise the particular center’s lineup, which could force us to close retail stores
and/or restaurants in desirable locations.
Furthermore, a deterioration in the financial condition of shopping center operators or developers could, for
example, limit their ability to invest in improvements and finance tenant improvements for us and other retailers and lead
consumers to view these locations as less desirable. In addition, if our e-commerce businesses continue to grow, they may
do so in part by attracting existing customers, rather than new customers, who choose to purchase products from us online
through our websites rather than from our physical stores, thereby reducing the financial performance of our bricks and
mortar operations, which could have a material adverse effect on our results of operations or financial condition.
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We make use of debt to finance our operations, which could expose us to risks that adversely affect our business,
financial position and operating results.
Our levels of debt vary as a result of the seasonality of our business, investments in our operations, acquisitions we
undertake and working capital needs. Our debt levels may increase or decrease from time to time under our existing facility
or potentially under new facilities, or the terms or forms of our financing arrangements may change. Our indebtedness
under the U.S. Revolving Credit Agreement includes certain obligations and limitations, including the periodic payment of
principal, interest and unused line fees, maintenance of certain covenants and certain other limitations. The negative
covenants in the U.S. Revolving Credit Agreement limits our ability to, among other things, incur debt, guaranty certain
obligations, incur liens, pay dividends, repurchase common stock, make investments, sell assets or make acquisitions.
These obligations and limitations may increase our vulnerability to adverse economic and industry conditions, place us at a
competitive disadvantage compared to any competitors that may be less leveraged and limit our flexibility in carrying out
our business plans and planning for, or reacting to, change.
In addition, we are subject to interest rate risk on the indebtedness under our variable rate U.S. Revolving Credit
Agreement, particularly in the current macroeconomic environment. An increase in the interest rate environment would
require us to pay a greater amount towards interest on our borrowings.
The continued growth of our business depends on our access to sufficient funds. If the need arises in the future to
finance expenditures in excess of those supported by our U.S. Revolving Credit Agreement, we may need to seek
additional funding through debt or equity financing. Our ability to obtain that financing will depend on many factors,
including prevailing market conditions, our financial condition and our ability to negotiate favorable terms and conditions.
The terms of any such financing or our inability to secure such financing could adversely affect our ability to execute our
strategies, and the negative covenants in our debt agreements, now or in the future, may increase our vulnerability to
adverse economic and industry conditions and/or limit our flexibility in carrying out our business strategy and plans.
The loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s financial
position, could negatively impact our net sales and profitability.
We generate a material percentage of our wholesale sales, which was 20% of our net sales in Fiscal 2023, from a
few key customers. Although our largest customer only represented less than 4% of our consolidated net sales in Fiscal
2023, the failure to increase or maintain our sales with our key customers as much as we anticipate would have a negative
impact on our growth prospects and any decrease or loss of these customers’ business could result in a decrease in our net
sales and operating income if we are unable to capture these sales through our direct to consumer operations or other
wholesale accounts. Over the last several years, department stores and other large retailers have faced increased
competition from online competitors, declining sales and profitability and tightened credit markets, resulting in store
closures, bankruptcies and financial restructurings. Restructuring of our customers’ operations, continued store closures or
increased direct sourcing by customers could negatively impact our net sales and profitability.
We also extend credit to most of our key wholesale customers without requiring collateral, which results in a large
amount of receivables from just a few customers. A significant adverse change in a customer’s financial position or ability
to satisfy its obligations to us could cause us to limit or discontinue business with that customer, in some cases after we
have already made product purchase commitments for inventory; require us to assume greater credit risk relating to that
customer’s receivables; or limit our ability to collect amounts related to shipments to that customer. In addition, a decision
by one or more of our key wholesale customers to terminate its relationship with us or to reduce its purchases, whether
motivated by competitive considerations, a change in desired product assortment, quality or style issues, financial
difficulties, economic conditions or otherwise, could also adversely affect our business.
Risks Related to Cybersecurity and Information Technology
Cybersecurity attacks and/or breaches of information security or privacy could disrupt our operations, cause us to incur
additional expenses, expose us to litigation and/or cause us financial harm.
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Cybersecurity attacks continue to become increasingly sophisticated, and experienced computer programmers and
hackers may be able to penetrate our network security and misappropriate or compromise our assets or disrupt our systems.
We collect, use, store and transmit sensitive and confidential business information and personal information of our
customers, employees, suppliers and others as an ongoing part of our business operations, and we are regularly subject to
attempts by attackers to gain unauthorized access to our networks, systems and data, or to obtain, change or destroy
confidential information. In addition, customers may use devices or software that are beyond our control environment to
purchase our products, which may provide additional avenues for attackers to gain access to confidential information, and
our embracing and implementation of remote work arrangements for a substantial portion of our employees may increase
our vulnerability to cybersecurity attacks. Additionally, the security systems of businesses that we acquire could pose
additional risks to us, such as those related to the collection, use, maintenance and disclosure of data, or present other
cybersecurity vulnerabilities.
Despite our implementation of security measures, if an actual or perceived data security breach occurs, whether as
a result of cybersecurity attacks, computer viruses, vandalism, ransomware, human error or otherwise, or if there are
perceived vulnerabilities in our systems, the image of our brands and our reputation and credibility could be damaged, and,
in some cases, our continued operations may be impaired or restricted. Ongoing and increasing costs to enhance
cybersecurity protection and prevent, eliminate or mitigate vulnerabilities are significant. Although we have business
continuity plans and other safeguards in place, our operations may be adversely affected by an actual or perceived data
security breach. Costs to resolve any litigation or to investigate and remediate any actual or perceived breach could result
in significant financial losses and expenses, as well as lost sales. While we continue to evolve and modify our business
continuity plans, there can be no assurance in an escalating threat environment that they will be effective in avoiding
disruption and business impacts.
In addition, the regulatory environment governing our use of individually identifiable data is complex, and
compliance with new and modified state, federal and international privacy and security laws may require us to modify our
operations and/or incur costs to make necessary systems changes and implement new administrative processes, which may
include deploying additional personnel and protection technologies, training employees and engaging third party experts
and consultants. In addition, because we process and transmit payment card information, we are subject to the payment
card industry data security standard and card brand operating rules, which provide for a comprehensive set of rules relating
to the retention and/or transmission of payment card information. If we do not comply with the applicable standards, we
may be subject to fines or restrictions on our ability to accept payment cards, which could have a material adverse effect on
our operations.
As part of our routine operations, we also contract with third party service providers to store, process and transmit
personal information of our customers and employees. Although we may contractually require that these providers
implement reasonable security measures, we cannot control third parties and cannot guarantee that a security breach will
not occur at their location or within their systems. Privacy breaches of confidential information stored or used by our third
party service providers or disruptions in their systems may expose us to the same risks as a breach of our own systems,
including negative publicity, potential out-of-pocket costs and adverse effects on our business and customer relationships.
Our operations are reliant on information technology, and any interruption or other failure could have an adverse
effect on our business or results of operations.
The efficient operation of our business depends on information technology. This requires us to devote significant
financial and employee resources to information technology initiatives and operations. Information systems are used in all
stages of our operations and as a method of communication, both internally and with our customers, service providers and
suppliers. Many of our information technology solutions are operated and/or maintained by third parties, including our use
of cloud-based solutions. Additionally, each of our operating groups uses e-commerce websites, point-of-sale systems,
enterprise order management systems, warehouse management systems and wholesale ordering systems to acquire,
manage, sell and distribute goods. Our management also relies on information systems to provide relevant and accurate
information in order to allocate resources, manage operations and forecast, account for and report our operating results.
Service interruptions may occur as a result of a number of factors, including power outages, consumer traffic levels,
computer viruses, sabotage, hacking or other unlawful activities by third parties, human error, disasters or failures to
properly install, upgrade, integrate, protect, repair or maintain our various systems, networks and e-commerce websites.
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All of these events could have a material adverse effect on our financial condition and results of operations. In light of the
current geopolitical environment, there are heightened risks that our information technology systems, as well as those of
third parties on whom we rely in order to conduct our operations, could be compromised by threat actors.
Reliance on outdated technology or failure to upgrade our information technology systems and capabilities could
impair the efficient operation of our business and our ability to compete.
Any failure to timely upgrade our technology systems and capabilities may impair our ability to market, sell and
deliver products to our customers, efficiently conduct our operations, facilitate customer engagement in today’s digital
marketplace and/or meet the needs of our management. We regularly evaluate upgrades or enhancements to our
information systems to more efficiently and competitively operate our businesses, including periodic upgrades to digital
commerce and marketing, warehouse management, guest relations, omnichannel and/or enterprise order management
systems in our businesses. Digital commerce and marketing have continued to increase in importance to our business, and
we have invested and will continue to invest significant capital in the digital strategies, systems, expertise and capabilities
necessary for us to compete effectively in this arena. Upgrades to our systems may be expensive undertakings, may not be
successful and/or could be abandoned. We may also experience difficulties during the implementation, upgrade or
subsequent operation of our systems, including the risk of introducing cybersecurity vulnerabilities into our systems or the
loss of certain functionality, information from our legacy systems and/or efficient interfaces with third party and continuing
systems. Temporary processes or solutions, including manual operations, which may be required to be instituted in the
short term could also significantly increase the risk of loss or corruption of data and information. Additionally, if such
upgraded information technology systems fail to operate or are unable to support our growth, our store operations and
websites could be severely disrupted, and we could be required to make significant additional expenditures to remedy any
such failure.
Risks Related to our Sourcing and Distribution Strategies
Our reliance on third party producers in foreign countries to meet our production demands exposes us to risks that
could disrupt our supply chain, increase our costs and negatively impact our operations.
We source substantially all of our products from non-exclusive, third party producers located in foreign countries.
Although we place a high value on long-term relationships with our suppliers, we do not have long-term supply contracts
but instead conduct business on an order-by-order basis. Therefore, we compete with other companies for the production
capacity of independent manufacturers. We also depend on the ability of these third party producers to secure a sufficient
supply of raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and
shipping capacity, and in some cases, the products we purchase and the raw materials that are used in our products are
available only from one source or a limited number of sources. Although we monitor production in third party
manufacturing locations, we cannot be certain that we will not experience operational difficulties with our manufacturers,
such as the reduction of available production capacity, errors in complying with product specifications, insufficient quality
control, failures to meet production deadlines or increases in manufacturing costs. In addition, we may experience
disruptions in our supply chain as we continue to diversify the jurisdictions from which we source products. Any such
difficulties may impact our ability to deliver quality products to our customers on a timely basis, increase our costs,
negatively impact our customer relationships and result in lower net sales and profits.
Our operations are dependent on the global supply chain, and the impact of supply chain constraints may
adversely impact our business and operating results.
Our operations in recent years have been, and may continue to be, impacted by supply chain constraints, labor
shortages and raw material shortages, resulting in increased costs for raw materials, longer lead times, port congestion and
increased freight costs. As a result of these factors within the global supply chain, our gross margins may be adversely
impacted. We also rely on logistics providers to transport our products to our distribution centers. Delays in shipping may
cause us to have to use more expensive air freight or other more costly methods to ship our products. Failure to adequately
produce and timely ship our products to customers could lead to increased costs and lost sales, negatively impact our
relationships with customers, and adversely impact our brand reputation.
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Any disruption or failure in our primary distribution facilities may materially adversely affect our business or
operations.
We rely on our primary distribution facilities in order to support our direct to consumer and wholesale operations,
meet customer fulfillment expectations, manage inventory, complete sales and achieve operating efficiencies. We may have
a greater risk than our peers due to the concentration of our distribution facilities, as substantially all of our products for
each operating group are distributed through one or two principal distribution centers. Although we continue to enhance
our enterprise order management capabilities to deliver products from other physical locations, our ability to effectively
support our direct to consumer and wholesale operations, meet customer expectations, manage inventory and achieve
objectives for operating efficiencies depends on the proper operation of these distribution facilities, each of which manages
the receipt, storage, sorting, packing and distribution of finished goods. In addition, initiatives to build new distribution
centers or enhance existing distribution centers, such as our multi-year project to build a new distribution center in the
Southeastern United States that will provide significant or exclusive support for all of our brands, or to transition
operations among distribution facilities or third party service providers, may be subject to delays, cost overruns, supply
chain disruptions or inability to obtain labor or materials which could result in substantial expense to us, disrupt our
operations and divert the attention of our management. In addition, we may face challenges integrating the distribution
center with the systems supporting our brands and transitioning operations to the distribution center around peak selling
seasons, and there can be no assurance that any such investments will achieve anticipated efficiencies.
If any of our primary distribution facilities were to shut down or otherwise become inoperable or inaccessible for
any reason, including as a result of natural or man-made disasters, pandemics or epidemics, human error, or cybersecurity
attacks or computer viruses, or if we are unable to receive or ship the goods in a distribution center, as a result of a
technology failure, labor shortages or otherwise, we could experience a substantial loss of inventory, a reduction in sales,
higher costs, insufficient inventory at our retail stores to meet consumer expectations and longer lead times associated with
the distribution of our products. In addition, for the distribution facilities that we operate, there are substantial fixed costs
associated with these large, highly automated distribution centers, and we could experience reduced operating and cost
efficiencies during periods of economic weakness. Any disruption to our distribution facilities or in their efficient operation
could negatively affect our operating results and our customer relationships.
Fluctuations and volatility in the cost and availability of raw materials, labor and freight may materially increase our
costs.
We and our third party suppliers rely on the availability of raw materials at reasonable prices. The principal fabrics
used in our business are cotton, silk, linen, polyester, cellulosic fibers, leather, and other natural and man-made fibers, or
blends of two or more of these materials. The prices paid for these fabrics depend on the market price for raw materials
used to produce them. The cost of the materials and components that are used in our manufacturing process, such as oil-
related commodity prices and other raw materials, such as dyes and chemicals, and other costs, can fluctuate. We
historically have not entered into any futures contracts to hedge commodity prices. In recent years, we experienced
increased costs of raw materials, including cotton, that impacted our production costs. These price increases could continue
in future years.
Employment costs represented more than 40% of our consolidated SG&A in Fiscal 2023, and we have seen
increases in the cost of labor in our retail, restaurant and distribution center operations as well as at many of our suppliers
in recent years. Employment costs are affected by labor markets, as well as various federal, state and foreign laws
governing matters such as minimum wage rates, overtime compensation and other requirements. In addition, in recent
years, there has been significant political pressure and legislative action to increase the minimum wage rate in many of the
jurisdictions in which we operate. We have also experienced increases in freight costs and distribution and logistics
functions and may continue to see such cost and capacity pressures. Although we attempt to mitigate the effect of increases
in our cost of goods sold, labor costs, occupancy costs, other operational costs and SG&A items through sourcing
initiatives and by selectively increasing the prices of our products, we may be unable to fully pass on these costs to our
customers, and material increases in our costs may reduce the profitability of our operations and/or adversely impact our
results of operations.
Labor-related matters, including labor disputes, may adversely affect our operations.
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We may be adversely affected as a result of labor disputes in our own operations or in those of third parties with
whom we work. Our business depends on our ability to source and distribute products in a timely manner, and our new
retail store and restaurant growth is dependent on timely construction of our locations. While we are not subject to any
organized labor agreements and have historically enjoyed good employee relations, there can be no assurance that we will
not experience work stoppages or other labor problems in the future with our employees. In addition, potential labor
disputes at independent factories where our goods are produced, shipping ports or transportation carriers create risks for
our business, particularly if a dispute results in work slowdowns, lockouts, strikes or other disruptions during our peak
manufacturing, shipping and selling seasons. Further, we plan our inventory purchases and forecasts based on the
anticipated timing of retail store and restaurant openings, which could be delayed as a result of a number of factors,
including labor disputes among contractors engaged to construct our locations or within government licensing or
permitting offices or the unavailability of qualified contractors due to labor shortages. Any potential labor dispute, either in
our own operations or in those of third parties on whom we rely, could materially affect our costs, decrease our sales, harm
our reputation or otherwise negatively affect our operations.
Our geographic concentration exposes us to certain regional risks.
Our operations and retail and restaurant locations are heavily concentrated in the United States and certain
geographic areas within the United States, including Florida, California, Texas and Hawaii for our Tommy Bahama
operations; Florida for our Lilly Pulitzer operations; California for our Johnny Was operations; and Florida for our
Emerging Brands operations. Additionally, the wholesale sales for our businesses are also geographically concentrated,
including in geographic areas where we have concentrations of our own retail store and restaurant locations. Due to these
concentrations, as well as our brands’ association with the resort lifestyle and destinations, we have heightened exposure to
factors that impact these regions, including general economic conditions, weather patterns, climate-related conditions,
natural disasters, public health crises, changing demographics and other factors.
Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign currency
exchange rates.
We are exposed to certain currency exchange risks in conducting business outside of the United States.
Substantially all of our product purchases are from foreign vendors and are denominated in U.S. dollars. If the value of the
U.S. dollar decreases relative to certain foreign currencies in the future, then the prices that we negotiate for products could
increase and we may be unable to pass this increase on to customers, which would negatively impact our margins.
However, if the value of the U.S. dollar increases between the time a price is set and payment for a product, the price we
pay may be higher than that paid for comparable goods by competitors that pay for goods in local currencies, and these
competitors may be able to sell their products at more competitive prices. An increase in the value of the U.S. dollar
compared to other currencies in which we have sales could also result in lower levels of sales and earnings reported in our
consolidated statements of operations and lower gross margins. Additionally, currency fluctuations could also disrupt the
business of our independent manufacturers by making their purchases of raw materials more expensive and difficult to
finance.
Risks Related to Regulatory, Tax and Financial Reporting Matters
Our business is subject to various federal, foreign, state and local laws and regulations, and the costs of compliance
with, or the violation of, such laws and regulations could have an adverse effect on our costs or operations.
We are subject to an increasing number of evolving and stringent standards, laws and other regulations, including
those relating to labor, employment, privacy and data security, consumer protection, marketing, health, product
performance, content and safety, anti-bribery, taxation, customs, logistics and other operational matters. These laws and
regulations, in the United States and abroad, are complex and often vary widely by jurisdiction, making it difficult for us to
ensure that we are currently or will in the future be compliant with all applicable laws and regulations in all the states and
countries in which we operate. In addition to the local laws of the foreign countries in which we operate, we are subject to
certain anti-corruption laws, including the U.S. Foreign Corrupt Practices Act. If any of our international operations, or
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our employees or agents, violates such laws, we could become subject to sanctions or other penalties that could negatively
affect our reputation, business and operating results.
We have seen many new laws and regulations going into effect or being proposed in recent years, including in
areas such as consumer and data privacy, matters related to corporate responsibility marketing and trade. We may be
required to make significant expenditures and devote significant time and management resources to comply with any
existing or future laws or regulations, and a violation of applicable laws and regulations by us, or any of our suppliers or
licensees, may restrict our ability to import products, require a recall of our products, lead to fines or otherwise increase our
costs, negatively impact our ability to attract and retain employees or materially limit our ability to operate our business. In
addition, regardless of whether any allegations of violations of the laws and regulations governing our business are valid or
whether we ultimately become liable, we may be materially affected by negative publicity as a result of such allegations.
Changes in international trade regulation could increase our costs and/or disrupt our supply chain.
Due to our international sourcing activities, we are exposed to risks associated with changes in the laws and
regulations governing the importing and exporting of apparel products into and from the countries in which we operate.
These risks include imposition of antidumping, countervailing or other duties, tariffs, taxes or quota restrictions;
government-imposed restrictions as a result of public health issues; changes in customs procedures for importing apparel
products; restrictions on the transfer of funds to or from foreign countries; and the issuance of sanctions and trade orders.
Any of these factors may disrupt our supply chain, and we may be unable to offset any associated cost increases by shifting
production to suitable manufacturers in other jurisdictions in a timely manner or at acceptable prices, and future regulatory
actions or changes in international trade regulation may provide our competitors with a material advantage over us or
render our products less desirable in the marketplace.
There has been heightened trade tension between the United States and China, from which we sourced 41% of our
products in Fiscal 2023 and from which Johnny Was has sourced more than 90% of its products in recent years, with
multiple rounds of increased U.S. tariffs on China-imported goods implemented in 2018 and 2019. It is unclear what, if
any, additional actions might be considered or implemented, particularly in the current geopolitical environment.
Significant tariffs or other restrictions placed on Chinese imports and any related countermeasures that are taken by China
could have an adverse effect on our financial condition or results of operations.
Any violation or perceived violation of our Supplier Code of Conduct or environmental and social compliance
programs, including by our manufacturers or vendors, could have a material adverse effect on our brands.
We have a robust legal, social and environmental compliance program, including a Supplier Code of Conduct and
vendor compliance standards. The reputation of our brands could be harmed if we or our third-party producers and
vendors, substantially all of which are located outside the United States, fail to meet appropriate human rights,
environmental, product safety and product quality standards. Despite our efforts, we cannot ensure that our producers and
vendors will at all times conduct their operations in accordance with ethical practices or that the products we purchase will
always meet our safety and quality control standards, and any failure to do so could disrupt our supply chain and adversely
affect our business operations.
The presence or perception of forced labor in our supply chain in spite of our efforts to ensure that our third-party
producers and vendors meet human rights and labor standards could result in adverse impacts on our business, including
the detention of goods at U.S. ports of entry, challenges in identifying replacement vendors and harm to our reputation.
While we have diversified the jurisdictions from which we source products and product inputs, our manufacturing
operations remain concentrated in Asia, cotton is among the principal raw materials used in many of our goods and even
the cotton used in our products manufactured outside of China largely originates from Chinese fabric mills. Starting in
Fiscal 2020, the U.S. Government issued withhold release orders in response to concerns regarding forced labor in the
Xinjiang Uyghur Autonomous Region (the “XUAR”) of China. The XUAR is a globally significant source of cotton
production, much of which is controlled by the Xinjiang Production and Construction Corporation (“XPCC”) and its
affiliates. The Uyghur Forced Labor Prevention Act (“UFLPA”), which was enacted in 2021, created a rebuttable
presumption that goods produced in whole or in part in the XUAR or connected with certain listed companies, including
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the XPCC and its affiliates, were produced using forced labor and are, therefore, barred from entry into the United States.
Requirements for enhanced supply chain traceability, monitoring and risk screening, including pursuant to the UFLPA,
have increased our compliance costs. Furthermore, while we do not knowingly source any products or product inputs from
the XUAR, we have no known involvement with the XPCC, its affiliates or other entity list companies and we prohibit our
suppliers from using forced labor, our supply chain is complex, and we may not have the ability to completely map and
monitor it. We could be subject to penalties, fines or sanctions if any of the producers from which we purchase goods is
found or suspected to have dealings, directly or indirectly, with the XUAR or entity list companies, and any actions taken
by customs officials to block the import of products suspected of being manufactured with forced labor, whether or not
founded, could adversely impact our operations and financial results.
Furthermore, consumers are increasingly attuned to the environmental and social impact of the products they
purchase and companies with which they do business. A failure to effectively convey our core principles to our customers
and investors or to accurately communicate our social responsibility and environmental sustainability initiatives and
respond to concerns raised about them, including through our websites and social media channels, could result in a
negative public perception of our brands and products and negatively impact our business.
As a multi-national apparel company, we may experience fluctuations in our tax liabilities and effective tax rate.
As a multi-national apparel company, we are subject to income taxes in the United States and various foreign
jurisdictions. We record our income tax liability based on an analysis and interpretation of local tax laws and regulations,
which requires a significant amount of judgment and estimation. In addition, we may from time to time modify our
operations in an effort to minimize our consolidated income tax expense. Our effective income tax rate in any particular
period or in future periods may be affected by a number of factors, including a shift in the mix of revenues, income and/or
losses among domestic and international sources during a year or over a period of years; changes in tax laws, regulations or
international tax treaties; the outcome of income tax audits; the difference between the income tax deduction and the
previously recognized income tax benefit related to the vesting of equity-based compensation awards; and the resolution of
uncertain tax positions, any of which could adversely affect our effective income tax rate and profitability. Further, changes
to U.S. and foreign tax laws and compliance with new tax laws could have a material adverse effect on our tax expense,
cash flows and operations.
Impairment charges for goodwill or intangible assets could have a material adverse impact on our financial results.
The carrying values of our goodwill and intangible assets, including those recorded in connection with our
acquisition of a business, are subject to periodic impairment testing. Impairment testing of goodwill and intangible assets
requires us to make estimates about future performance and cash flows that are inherently uncertain and can be affected by
numerous factors, including changes in economic conditions, income tax rates, our results of operations and competitive
conditions in the industry. In Fiscal 2023, we recognized $111 million of noncash impairment charges for goodwill and
intangible assets in connection with the operations of Johnny Was, which was driven by the prevailing macroeconomic
environment’s impact on near-term expectations for our business operations and higher interest rates. Future impairment
charges may have a material adverse effect on our consolidated financial statements or results of operations.
Any failure to maintain liquor licenses or comply with applicable regulations could adversely affect the profitability of
our restaurant operations.
The restaurant industry requires compliance with a variety of federal, state and local regulations. In particular, all
of our Tommy Bahama restaurants and Marlin Bars serve alcohol and, therefore, maintain liquor licenses. Our ability to
maintain our liquor licenses and other permits depends on our compliance with applicable laws and regulations. The loss of
a liquor license or other critical permits would adversely affect the profitability of that restaurant. Additionally, as a
participant in the restaurant industry, we face risks related to food quality, food-borne illness, injury, health inspection
scores and labor relations. The negative impact of adverse publicity relating to allegations of actual or perceived violations
at one of our restaurants may extend beyond the restaurant involved to affect some or all of our other restaurants, as well as
the image of the Tommy Bahama brand as a whole.
General Risks
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Our business depends on our senior management and other key personnel, and failure to successfully attract, retain
and implement succession of our senior management and key personnel or to attract, develop and retain personnel to
fulfill other critical functions may have an adverse effect on our operations and ability to execute our strategies.
Our senior management has substantial experience in the apparel and related industries, with our Chairman and
Chief Executive Officer Mr. Thomas C. Chubb III having worked with our company for more than 30 years, including in
various executive management capacities. Our success depends on disciplined execution at all levels of our organization,
including our senior management, and continued succession planning. Competition for qualified personnel is intense, and
we compete to attract and retain these individuals with other companies that may have greater financial resources than us.
While we believe that we have depth within our management team, the unexpected loss of any of our senior management,
or the unsuccessful integration of new leadership, could harm our business and financial performance. In addition, we may
be unable to retain or recruit qualified personnel in key areas such as product design, sales, marketing (including
individuals with key insights into digital and social media marketing strategies), distribution, technology, sourcing and
other support functions, which could result in missed sales opportunities and harm to key business relationships.
In recent years, we have experienced staffing shortages, higher turnover rates and challenges in recruiting and
retaining qualified employees at all levels of our organization, which may continue in the future. Our inability or failure to
recruit and retain skilled personnel, or the still undeterminable longer term impact of our embracing remote and hybrid
work arrangements on professional development and progression, retention and company culture, could adversely impact
our business, financial performance, reputation, ability to keep up with the needs of our customers and overall customer
satisfaction.
We may be unable to protect our trademarks and other intellectual property.
We believe that our trademarks and other intellectual property rights have significant value and are important to our
continued success and our competitive position due to their recognition by consumers and retailers. Substantially all of our
consolidated net sales are attributable to branded products for which we own the trademark. Therefore, our success
depends to a significant degree on our ability to protect and preserve our intellectual property. We rely on laws in the
United States and other countries to protect our proprietary rights. However, we may not be able to sufficiently prevent
third parties from using our intellectual property without our authorization, particularly in those countries where the laws
do not protect our proprietary rights as fully as in the United States. We have also experienced challenges with enforcing
our intellectual property rights on third party e-commerce websites, especially those based in foreign jurisdictions. The use
of our intellectual property or similar intellectual property by others could reduce or eliminate any competitive advantage
we have developed, causing us to lose sales or otherwise harm the reputation of our brands.
We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting
efforts. Despite these efforts, we regularly discover products that infringe our proprietary rights or that otherwise seek to
mimic or leverage our intellectual property. Counterfeiting and other infringing activities typically increase as brand
recognition increases, and association of our brands with inferior counterfeit reproductions or third-party labels could
adversely affect the integrity and reputation of our brands.
Additionally, there can be no assurance that the actions that we have taken will be adequate to prevent others from
seeking to block sales of our products as violations of proprietary rights. As we extend our brands into new product
categories and new product lines and expand the geographic scope of the sourcing, distribution and marketing of our
brands’ products, we could become subject to litigation or challenge based on allegations of the infringement of intellectual
property rights of third parties, including by various third parties who have acquired or claim ownership rights in some of
our trademarks internationally. In the event a claim of infringement against us is successful or would otherwise affect our
operations, we may be required to pay damages, royalties, license fees or other costs to continue to use intellectual property
rights that we had been using, or we may be unable to obtain necessary licenses from third parties at a reasonable cost or
within a reasonable time. Litigation and other legal action of this type, regardless of whether it is successful, could result in
substantial costs to us and diversion of the attention of our management and other resources.
We are subject to periodic litigation, which may cause us to incur substantial expenses or unexpected liabilities.
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From time to time, we are involved in litigation matters, which may relate to employment practices, consumer
protection, intellectual property infringement, product liability and contract disputes, and which may include a class action,
and we are subject to various claims and pending or threatened lawsuits in the ordinary course of our business operations.
Often, these cases raise complex factual and legal issues and, due to the inherent uncertainties of litigation, we cannot
accurately predict the ultimate outcome of any such proceedings. Regardless of the outcome or whether the claims have
merit, legal proceedings may be expensive and require significant management time.
Our common stock price may be highly volatile, and we may be unable to meet investor and analyst expectations.
Our common stock, which is currently listed on the New York Stock Exchange, may be subject to extreme and
unpredictable fluctuations in price. The market price of our common stock may decline, or litigation may ensue, if the
results of our operations or projected results do not meet the expectations of securities analysts or our shareholders,
investors are unreceptive to an announcement of changes in our business or our strategic initiatives or securities analysts
who follow our company change their ratings or estimates of our future performance. Our stock price may also change
suddenly as a result of other factors beyond our control, including general economic conditions, new or modified
legislation impacting our industry, announcements by our competitors, or sales of our stock by existing shareholders.
The stock market has also experienced periods of general volatility which result in fluctuations in stock prices
unrelated or disproportionate to operating performance. We cannot provide assurances that there will continue to be an
active trading market for our stock, and the price of our common stock may also be affected by illiquidity or perceived
illiquidity of our shares. In addition, although we have paid dividends in each quarter since we became a public company in
July 1960, we may discontinue or reduce dividend payments based upon several factors, including the terms of our credit
facility and applicable law, the need for funding for our strategic initiatives or other capital expenditures and our future
cash needs. Any modification or suspension of dividends could cause our stock price to decline. We also may be subject,
from time to time, to legal and business challenges or disruptions in the operation of our company due to actions instituted
by activist shareholders or others.
Other factors may have an adverse effect on our business, results of operations and financial condition.
Other risks, many of which are beyond our ability to control or predict, could negatively impact our business and financial
performance, including changes in social, political, labor, health and economic conditions; changes in the operations or
liquidity of any of the parties with which we conduct our business, or in the access to capital markets for any such parties;
increasing costs of customer acquisition, activation and retention; consolidation in the retail industry; and other factors.
Any of these risks, and others of which we are not aware or that we currently consider to be immaterial, could, individually
or in the aggregate, have a material adverse effect on our business, financial condition and results of operations.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
We maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity
threats. We obtain input, as appropriate, for our cybersecurity risk management program from threat intelligence services,
cybersecurity consultants, and multiple external sources. Our cybersecurity program is managed by our Head of Cyber
Security, whose team is responsible for leading enterprise-wide cybersecurity strategy, risk assessment, and management
policies, standards, architecture, and processes. The Head of Cyber Security has a master’s degree in cybersecurity,
maintains industry certifications, and has over 20 years of prior work experience in various roles involving information
technology, cybersecurity, and compliance. We augment our cybersecurity team with consultants, contract resources, and
managed security service providers when needed. Our executive leadership team, along with input the Head of Cyber
Security, are responsible for our overall enterprise risk management system and processes and regularly consider
cybersecurity risks in the context of other material risks to the company.
Our Board has delegated to its Audit Committee oversight responsibility for cyber risks and incidents relating to
cybersecurity threats, including compliance with disclosure requirements. The Head of Cyber Security provides quarterly
reports to our Audit Committee regarding cyber risk trends, technology security risks, projects to continually enhance our
information security systems, cybersecurity strategy, and the emerging threat landscape. The Audit Committee reports any
findings and recommendations, as appropriate, to the full Board for consideration. Our cybersecurity program is
periodically evaluated by internal and external resources to evaluate and enhance the effectiveness of our information
security policies, controls, and procedures. The results of those reviews are reported to senior management and the Audit
Committee. As part of our cyber risk management program, we track and log security incidents across our enterprise and
perform third-party risk assessments to identify and attempt to mitigate risks from third parties such as vendors and
suppliers.
Despite our efforts, we cannot eliminate all risks from cybersecurity threats or incidents or provide assurances that
we have not experienced an undetected cybersecurity incident. In addition, while we have implemented a risk management
process to mitigate cybersecurity risks that arise from utilizing third party service providers, suppliers, and vendors, our
control over and ability to monitor the security posture of third parties with whom we do business remains limited and
there can be no assurance that we can prevent, mitigate, or remediate the risk of any compromise or failure in the security
infrastructure owned or controlled by such third parties.
For more information on our cybersecurity related risks, see Part I, Item 1A. Risk Factors of this Report.
Item 2. Properties
We lease and own space for our direct to consumer locations, distribution centers, and sales/administration offices
in various locations. We believe that our existing properties are well maintained, are in good operating condition and will
be adequate for our present level of operations.
In the ordinary course of business, we enter into lease agreements for our direct to consumer operations, including
leases for full-price retail store, food and beverage and outlet store space. The leases have varying terms and expirations
and may have provisions to extend, renew or terminate the lease agreement, among other terms and conditions. At times,
we may determine that it is appropriate to close certain direct to consumer or other locations that no longer meet our
investment criteria, by either not renewing the lease, exercising an early termination option, negotiating an early
termination or otherwise. Despite prevailing market conditions becoming increasingly competitive and commanding
significantly higher rents for the most desired properties, we anticipate that we will be able to extend our leases for existing
leases in desirable locations, to the extent that they expire in the near future, on terms that are satisfactory to us, or if
necessary, locate substitute properties on acceptable terms. The terms and conditions of lease renewals or relocations may
not be as favorable as existing leases.
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Details of the principal administrative, sales and distribution facilities used in our operations, including
approximate square footage, are as follows:
Location
Seattle, Washington
Auburn, Washington (1)
King of Prussia, Pennsylvania
Los Angeles, California
Los Angeles, California
Atlanta, Georgia
Lyons, Georgia
Primary Use
Sales/administration
Distribution center
Sales/administration and
distribution center
Sales/administration
Administration and
distribution center
Sales/administration
Distribution center
Operating Group
Tommy Bahama
Tommy Bahama
Lilly Pulitzer
Johnny Was
Johnny Was
Corporate/Other
Various
Square
Footage
125,000
335,000
160,000
30,000
70,000
30,000
420,000
Lease
Expiration
2026
2025
Owned
2032
2025
2026
Owned
(1) The lease on the Auburn, Washington Distribution center was extended in Fiscal 2024 through Fiscal 2035.
Item 3. Legal Proceedings
From time to time, we are a party to litigation and regulatory actions arising in the ordinary course of business.
These actions may relate to trademark and other intellectual property, employee relations matters, real estate, licensing
arrangements, importing or exporting regulations, product safety requirements, taxation or other topics. We are not
currently a party to any litigation or regulatory action or aware of any proceedings contemplated by governmental
authorities that we believe could reasonably be expected to have a material impact on our financial position, results of
operations or cash flows. However, our assessment of any litigation or other legal claims could potentially change in light
of the discovery of additional factors not presently known or determinations by judges, juries, or others which are not
consistent with our evaluation of the possible liability or outcome of such litigation or claims.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market and Dividend Information
Our common stock is listed and traded on the New York Stock Exchange under the symbol "OXM." As of
March 24, 2024, there were 255 record holders of our common stock.
On March 25, 2024, our Board of Directors approved a cash dividend of $0.67 per share payable on May 3, 2024
to shareholders of record as of the close of business on April 19, 2024. Although we have paid dividends each quarter since
we became a public company in July 1960, we may discontinue or modify dividend payments at any time if we determine
that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital
expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash flows and
future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt instruments or
applicable law limit our ability to pay dividends. We may borrow to fund dividends or repurchase shares in the short term
subject to the terms and conditions of our credit facility, other debt instruments and applicable law. All cash flow from
operations will not be paid out as dividends or repurchases of our common stock. For details about limitations on our
ability to pay dividends, see the discussion of our $325 million Fourth Amended and Restated Credit Agreement (as
amended, the “U.S. Revolving Credit Agreement”) in Note 6 of our consolidated financial statements and Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, both contained in this report.
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Recent Sales of Unregistered Securities
We did not sell any unregistered equity securities during Fiscal 2023.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We have certain stock incentive plans as described in Note 8 to our consolidated financial statements included in
this report, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover
employee tax liabilities related to the vesting of shares of our stock. During the Fourth Quarter of Fiscal 2023, no shares
were repurchased pursuant to these plans.
As disclosed in our Quarterly Report on Form 10-Q for the Third Quarter of Fiscal 2021, and in subsequent filings, on
December 7, 2021, our Board of Directors authorized us to spend up to $150 million to repurchase shares of our stock. This
authorization superseded and replaced all previous authorizations to repurchase shares of our stock and has no automatic
expiration. Pursuant to the Board of Directors’ authorization, in the First Quarter of Fiscal 2023, we entered into a $20
million open market stock repurchase program (Rule 10b5-1 plan) to acquire shares of our stock. During the Second
Quarter of Fiscal 2023 and the Third Quarter of Fiscal 2023, we repurchased 186,000 and 10,000 shares, respectively, of
our common stock for $19 million and $1 million, respectively. Over the life of the $20 million open market repurchase
program we repurchased 196,000 shares, or 1%, of our outstanding shares at the commencement of the program for an
average price of $102 per share.
During the Fourth Quarter of Fiscal 2023, we did not repurchase any shares of our stock pursuant to this authorization.
After considering the repurchases during Fiscal 2023 as of February 3, 2024, there were no amounts remaining under the
open market repurchase program and $30 million remaining under the Board of Directors’ authorization.
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Stock Price Performance Graph
The graph below reflects cumulative total shareholder return (assuming an initial investment of $100 and the
reinvestment of dividends) on our common stock compared to the cumulative total return for a period of five years,
beginning February 2, 2019, and ending February 3, 2024, of (1) The S&P SmallCap 600 Index and (2) The S&P 500
Apparel, Accessories and Luxury Goods.
INDEXED RETURNS
Years Ended
2/1/20 1/30/21 1/29/22 1/28/23
91.67
106.63
92.13
88.01
131.34
90.11
111.12
142.26
88.75
164.80
141.93
64.72
2/3/24
138.81
147.56
52.88
Company / Index
Oxford Industries, Inc.
S&P SmallCap 600 Index
S&P 500 Apparel, Accessories & Luxury Goods
Base Period
2/2/19
100
100
100
Item 6. Reserved
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations, cash flows, liquidity and capital resources
compares Fiscal 2023 to Fiscal 2022 and should be read in conjunction with our consolidated financial statements
contained in this report.
The results of operations, cash flows, liquidity and capital resources for Fiscal 2022 compared to Fiscal 2021 are
not included in this report on Form 10-K. For a discussion of our results of operations, cash flows, liquidity and capital
resources for Fiscal 2022 compared to Fiscal 2021 and certain other financial information related to Fiscal 2022 and Fiscal
2021, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II.
Item 7 of our 2022 Annual Report on Form 10-K, filed with the SEC on March 28, 2023, which is available on the SEC’s
website at www.sec.gov and under the Investor Relations section of our website at www.oxfordinc.com.
Business Overview
OVERVIEW
We are a leading branded apparel company that designs, sources, markets and distributes products bearing the
trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers
lifestyle brands.
Our business strategy is to drive excellence across a portfolio of lifestyle brands that create sustained, profitable
growth. We consider lifestyle brands to be those brands that have a clearly defined and targeted point of view inspired by
an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create an emotional connection can
command greater loyalty and higher price points and create licensing opportunities. We believe the attraction of a lifestyle
brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and
distributing products to consumers where and when they want them. We believe the principal competitive factors in the
apparel industry are the reputation, value, and image of brand names; design of differentiated, innovative or otherwise
compelling product; consumer preference; price; quality; marketing (including through rapidly shifting digital and social
media vehicles); product fulfillment capabilities; and customer service. Our ability to compete successfully in the apparel
industry is dependent on our proficiency in foreseeing changes and trends in fashion and consumer preference and
presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to
provide exciting, differentiated fashion products each season as well as certain core products that consumers expect from
us.
On September 19, 2022, we acquired Johnny Was. Johnny Was products are sold through the Johnny Was website
and full-price retail stores and outlets as well as select department stores and specialty stores. We continue to execute
acquisition and integration activities in connection with the Johnny Was acquisition, such as investing in distribution and
technology infrastructure. The financial information included in the results of operations discussion below for Fiscal 2022,
includes only the nineteen weeks from the September 19, 2022 acquisition through January 28, 2023. Therefore, the
amounts included in the results of operations below for Fiscal 2022 are not indicative of results for a full year. Refer to
Note 4 and Note 2 of our consolidated financial statements included in this report for additional information about the
Johnny Was acquisition.
During Fiscal 2023, 80% of our consolidated net sales were through our direct to consumer channels of
distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our
Tommy Bahama food and beverage operations. The remaining 20% of our net sales was generated through our wholesale
distribution channels, which complement our direct to consumer operations and provide access to a larger base of
consumers. Our wholesale operations consist of sales of products bearing the trademarks of our lifestyle brands to various
specialty stores, better department stores, Signature Stores, multi-branded e-commerce retailers and other retailers.
For additional information about our business and each of our operating groups, see Part I, Item 1. Business
included in this report. Important factors relating to certain risks which could impact our business are described in Part I,
Item 1A. Risk Factors of this report.
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Industry Overview
We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application
of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the apparel industry, and
our competitors vary by operating group and distribution channel. The apparel industry is cyclical and very dependent on
the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional,
domestic and international economic conditions change. Also, in recent years consumers have chosen to spend less of their
discretionary spending on certain product categories, including apparel, while spending more on services and other product
categories. Further, negative economic conditions often have a longer and more severe impact on the apparel industry than
on other industries due, in part, to apparel purchases often being more of a discretionary purchase.
This competitive and evolving environment requires that brands and retailers approach their operations, including
marketing and advertising, very differently than they have historically and may result in increased operating costs and
investments to generate growth or even maintain existing sales levels. While the competition and evolution present
significant risks, especially for traditional retailers who fail or are unable to adapt, we believe it also presents a tremendous
opportunity for brands and retailers to capitalize on the changing consumer environment.
The current macroenvironment, with heightened concerns about continuing inflationary trends, a global economic
recession, geopolitical issues, the availability and cost of credit and elevated interest rates for prolonged periods, combined
with heightened promotional activity in our industry, is creating a complex and challenging retail environment, which has
impacted our businesses and financial results during Fiscal 2023 and exacerbated some of the inherent challenges to our
operations and may continue to do so in the future. There remains significant uncertainty in the macroeconomic
environment, and the impact of these and other factors could have a major effect on our businesses.
However, we believe our lifestyle brands have true competitive advantages, and we continue to invest in our
brands’ direct to consumer initiatives and distribution capabilities while further leveraging technology to serve our
consumers when and where they want to be served. We continue to believe that our lifestyle brands, with their strong
emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various
challenges facing our industry in the current environment.
Key Operating Results
The following table sets forth our consolidated operating results (in thousands, except per share amounts) for
Fiscal 2023 and Fiscal 2022:
Net sales
Operating income
Net earnings
Net earnings per diluted share
Weighted average shares outstanding - diluted
Fiscal
Fiscal 2023
$ 1,571,475
80,982
$
60,703
$
3.82
$
15,906
Fiscal 2022
$ 1,411,528
218,774
$
165,735
$
10.19
$
16,259
Net earnings per diluted share were $3.82 in Fiscal 2023 compared to $10.19 in Fiscal 2022. The 63% decrease in
net earnings per diluted share was primarily due to a 63% decrease in net earnings partially offset by a 2% reduction in
weighted average shares outstanding due to open market share repurchases in Fiscal 2022 and Fiscal 2023. The decreased
net earnings was primarily due to (1) lower operating income at Johnny Was primarily resulting from the noncash $111
million impairment charge recognized in the Fourth Quarter of Fiscal 2023, (2) lower operating income at Tommy Bahama,
Lilly Pulitzer and Emerging Brands, (3) increased interest expense, (4) a higher operating loss at Corporate and Other and
(5) lower royalty income. These decreases were offset by a lower effective tax rate.
During Fiscal 2023 we generated $244 million of cash flows from operations, which exceeded our cash used for
capital expenditures, dividends and share repurchases. With our long history of strong positive cash flows from operations
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exceeding cash requirements for capital expenditures and dividends and our strong balance sheet, we believe our
anticipated future cash flows from operations will provide sufficient cash to satisfy our ongoing operating cash
requirements, ample funds to continue to invest in our lifestyle brands, the project to build a new distribution center in the
Southeastern United States, direct to consumer initiatives and information technology projects, additional cash flow to
repay outstanding debt and sufficient cash for other strategic initiatives.
OPERATING GROUPS
We identify our operating groups based on the way our management organizes the components of our business for
purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused
management approach, emphasizing operational coordination and resource allocation across each brand’s direct to
consumer, wholesale and licensing operations, as applicable. Subsequent to our acquisition of Johnny Was in September
2022, our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups.
Operating results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in
Fiscal 2021. For a more extensive description of our reportable operating groups and Corporate and Other, see Part I,
Item 1. Business and Note 2 of our consolidated financial statements, both included in this report.
COMPARABLE SALES
We often disclose comparable sales in order to provide additional information regarding changes in our results of
operations between periods. Our disclosures of comparable sales include net sales from our full-price retail stores and e-
commerce sites, excluding sales associated with e-commerce flash clearance sales. We believe that the inclusion of both
full-price retail stores and e-commerce sites in the comparable sales disclosures is a more meaningful way of reporting our
comparable sales results, given similar inventory planning, allocation and return policies, as well as our cross-channel
marketing and other initiatives for the direct to consumer channels. For our comparable sales disclosures, we exclude
(1) outlet store sales and e-commerce flash clearance sales, as those clearance sales are used primarily to liquidate end of
season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally
occur at lower gross margins than our non-clearance direct to consumer sales, and (2) food and beverage sales, as we do
not currently believe that the inclusion of food and beverage sales in our comparable sales disclosures is meaningful in
assessing our total company operations. Comparable sales information reflects net sales, including shipping and handling
revenues, if any, associated with product sales.
For purposes of our disclosures, comparable sales consists of sales through e-commerce sites and any physical
full-price retail store that was owned and open as of the beginning of the prior fiscal year and which did not have during
the relevant periods, and is not within the current fiscal year scheduled to have, (1) a remodel or other event which would
result in a closure for an extended period of time (which we define as a period of two weeks or longer), (2) a greater than
15% change in the size of the retail space due to expansion, reduction or relocation to a new retail space or (3) a relocation
to a new space that is significantly different from the prior retail space. For those stores which are excluded based on the
preceding sentence, the stores continue to be excluded from comparable sales until the criteria for a new store is met
subsequent to the remodel, relocation, or other event. A full-price retail store that is remodeled will generally continue to
be included in our comparable sales metrics as a store is not typically closed for longer than a two-week period during a
remodel; however, a full-price retail store that is relocated generally will not be included in our comparable sales metrics
until that store has been open in the relocated space for the entirety of the prior fiscal year because the size or other
characteristics of the store typically change significantly from the prior location. Any stores that were closed during the
prior fiscal year or current fiscal year, or which we expect to close or vacate in the current fiscal year, as well as any pop-up
or temporary store locations, are excluded from our comparable sales metrics.
Definitions and calculations of comparable sales differ among retail companies, and therefore comparable sales
metrics disclosed by us may not be comparable to the metrics disclosed by other companies.
DIRECT TO CONSUMER LOCATIONS
The table below provides information about the number of direct to consumer locations for our brands as of the
dates specified. For acquired businesses, locations are only included subsequent to the date of acquisition. The amounts
46
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below include our permanent locations and exclude any pop-up or temporary store locations which have an initial lease
term of 12 months or less.
Tommy Bahama full-price retail stores
Tommy Bahama retail-food & beverage locations
Tommy Bahama outlets
Total Tommy Bahama locations
Lilly Pulitzer full-price retail stores
Johnny Was full-price retail stores
Johnny Was outlets
Total Johnny Was locations
Southern Tide full-price retail stores
TBBC full-price retail stores
Total Oxford direct to consumer locations
February 3,
2024
January 28,
2023
January 29,
2022
January 30,
2021
102
22
34
158
60
72
3
75
19
3
315
103
21
33
157
59
65
2
67
6
3
292
102
21
35
158
58
—
—
—
4
1
221
105
20
35
160
59
—
—
—
3
—
222
RESULTS OF OPERATIONS
The following table sets forth the specified line items in our consolidated statements of operations both in dollars
(in thousands) and as a percentage of net sales. We have calculated all percentages based on actual data, but percentage
columns may not add due to rounding.
Fiscal 2023
Fiscal 2022
Fiscal 2021
Net sales
Cost of goods sold
Gross profit
SG&A
Impairment of goodwill and intangible
assets
Royalties and other operating income
Operating income
Interest expense, net
Earnings before income taxes
Income taxes
Net earnings
Net earnings per share
Weighted average shares outstanding -
diluted
$
$
$ 1,571,475
575,890
995,585
820,705
113,611
19,713
80,982
6,036
74,946
14,243
60,703
100.0 % $ 1,411,528
36.6 %
63.4 %
52.2 %
522,673
888,855
692,004
100.0 % $ 1,142,079 100.0 %
38.2 %
435,861
37.0 %
61.8 %
706,218
63.0 %
50.2 %
573,636
49.0 %
—
7.2 %
1.3 %
21,923
5.2 %
218,774
0.4 %
3,049
4.8 %
215,725
49,990
0.9 %
3.9 % $ 165,735
—
— %
1.6 %
32,921
15.5 %
165,503
0.2 %
944
15.3 %
164,559
33,238
3.5 %
11.7 % $ 131,321
— %
2.9 %
14.5 %
0.1 %
14.4 %
2.9 %
11.5 %
3.82
$
10.19
$
7.78
15,906
16,259
16,869
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The following table presents the proportion of our consolidated net sales, including any net sales of Johnny Was
and Lanier Apparel, by distribution channel for each period presented. We have calculated all percentages below on actual
data, and percentages may not add to 100 due to rounding.
Retail
E-commerce
Food & beverage
Wholesale
Total
Fiscal 2023
Fiscal 2022 Fiscal 2021
39 %
34 %
7 %
20 %
100 %
39 %
33 %
8 %
20 %
100 %
39 %
32 %
8 %
20 %
100 %
FISCAL 2023 COMPARED TO FISCAL 2022
The discussion and tables below compare certain line items included in our consolidated statements of operations
for Fiscal 2023, which includes 53 weeks, to Fiscal 2022, which includes 52 weeks, except where indicated otherwise.
Each dollar and share amount included in the tables is in thousands except for per share amounts. We have calculated
all percentages based on actual data, and percentage columns in tables may not add due to rounding. Individual line items
of our consolidated statements of operations, including gross profit, may not be directly comparable to those of our
competitors, as classification of certain expenses may vary by company.
Net Sales
Tommy Bahama
Lilly Pulitzer
Johnny Was
Emerging Brands
Corporate and Other
Consolidated net sales
Fiscal
Fiscal 2023
Fiscal 2022
898,807
343,499
202,859
126,825
(515)
1,571,475
$
$
880,233
339,266
72,591
116,484
2,954
1,411,528
$
$
$ Change
$ 18,574
4,233
130,268
10,341
(3,469)
$ 159,947
% Change
2.1 %
1.2 %
NM %
8.9 %
(117.4)%
11.3 %
Consolidated net sales were $1.6 billion in the 53 week Fiscal 2023 compared to net sales of $1.4 billion in the 52
week Fiscal 2022. The 11% increase in net sales included (1) a $130 million increase in sales for Johnny Was, which we
owned for 19 out of the 52 weeks of Fiscal 2022 and (2) single-digit percentage increases in each of our Tommy Bahama,
Lilly Pulitzer, and Emerging Brands operating groups. We estimate that the 53rd week in Fiscal 2023 provided an
approximate $16 million benefit to our consolidated net sales.
The increase in net sales by distribution channel consisted of the following:
● an increase in full-price e-commerce sales of $66 million, or 16%, including (1) a $53 million increase in
full-price e-commerce sales in Johnny Was and (2) an increase in full-price e-commerce sales in Tommy
Bahama and Emerging Brands. These increases were partially offset by a decrease in full-price e-commerce
sales in Lilly Pulitzer;
● an increase in full-price retail store sales of $46 million, or 9%, including (1) a $47 million increase in full-
price retail store sales in Johnny Was and (2) an increase in full-price retail store sales in Emerging Brands.
These increases were partially offset by a decrease in full-price retail sales in Tommy Bahama. Lilly Pulitzer
full-price retail sales were comparable in Fiscal 2023 to Fiscal 2022;
● an increase in wholesale sales of $30 million, or 11%, including (1) a $26 million increase in wholesale sales
for Johnny Was and (2) an increase in wholesale sales in Tommy Bahama. These increases were partially
offset by a decrease in wholesale sales in Emerging Brands. Lilly Pulitzer wholesale sales were comparable
in Fiscal 2023 to Fiscal 2022;
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● an increase in e-commerce flash clearance sales of $7 million, or 13%;
● an increase in food and beverage sales of $7 million, or 6%; and
● an increase in outlet sales of $7 million, or 10%, including a $3 million increase in outlet sales in Johnny
Was.
Tommy Bahama:
Tommy Bahama net sales increased $19 million, or 2%, in Fiscal 2023, with an increase in (1) e-commerce sales
of $10 million, or 5%, (2) wholesale sales of $8 million, or 5%, (3) food and beverage sales of $7 million, or 6%, and (4)
outlet sales of $3 million, or 5%. These increases were partially offset by a decrease in full-price retail sales of $9 million,
or 3%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period
presented:
Retail
E-commerce
Food & beverage
Wholesale
Total
Lilly Pulitzer:
Fiscal 2023 Fiscal 2022
45 %
25 %
13 %
17 %
100 %
46 %
24 %
13 %
17 %
100 %
Lilly Pulitzer net sales increased $4 million, or 1%, in Fiscal 2023, with an increase in e-commerce flash clearance
sales of $7 million, or 13%. This increase was partially offset by a decrease in full-price e-commerce sales of $3 million, or
3%. Wholesale sales and full-price retail sales were comparable in Fiscal 2023 to Fiscal 2022. The following table presents
the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:
Retail
E-commerce
Wholesale
Total
Johnny Was:
Fiscal 2023
Fiscal 2022
33 %
51 %
16 %
100 %
33 %
51 %
16 %
100 %
Johnny Was net sales were $203 million in Fiscal 2023. We owned Johnny Was for 19 out of the 52 weeks of
Fiscal 2022. The following table presents the proportion of net sales by distribution channel for Johnny Was for each
period presented:
Retail
E-commerce
Wholesale
Total
Emerging Brands:
Fiscal 2023
Fiscal 2022
38 %
41 %
21 %
100 %
36 %
42 %
22 %
100 %
Emerging Brands net sales increased $10 million, or 9%, in Fiscal 2023, including $2 million of sales in Jack
Rogers that was acquired during the Fourth Quarter of Fiscal 2023. Sales increases in Southern Tide and Duck Head were
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partially offset by a slight sales decrease in TBBC. By distribution channel, the $10 million increase included increases of
(1) $7 million, or 126%, in retail sales as we opened new retail locations and (2) $6 million, or 12%, in e-commerce. These
increases were partially offset by a $3 million, or 5%, decrease in wholesale sales that includes the impact of the
acquisition and conversion of six former Southern Tide Signature Store operations to company owned retail stores. The
following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:
Retail
E-commerce
Wholesale
Total
Corporate and Other:
Fiscal 2023
Fiscal 2022
11 %
43 %
46 %
100 %
6 %
42 %
52 %
100 %
Corporate and Other net sales primarily consist of net sales to third parties for our Lyons, Georgia distribution
center operations as well as net sales of our Oxford America business, which we exited in Fiscal 2022. The decrease in net
sales was primarily due to the exit of Oxford America.
Gross Profit
The tables below present gross profit by operating group and in total for Fiscal 2023 and Fiscal 2022, as well as
the change between those two periods and gross margin by operating group and in total. Our gross profit and gross margin,
which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the
statement of operations classification of certain expenses may vary by company.
Tommy Bahama
Lilly Pulitzer
Johnny Was
Emerging Brands
Corporate and Other
Consolidated gross profit
Notable items included in amounts above:
LIFO adjustments in Corporate and Other
Inventory step-up charge included in Johnny Was
$
$
$
$
Fiscal 2023
Fiscal 2022
$ Change
% Change
579,118
226,206
137,567
61,798
(9,104)
995,585
$
$
567,557
225,028
44,765
53,012
(1,507)
888,855
$
11,561
1,178
92,802
8,786
(7,597)
$ 106,730
2.0 %
0.5 %
NM %
16.6 %
NM %
12.0 %
9,605
$
— $
2,667
4,230
Tommy Bahama
Lilly Pulitzer
Johnny Was
Emerging Brands
Corporate and Other
Consolidated gross margin
Fiscal 2023
Fiscal 2022
64.4 %
65.9 %
67.8 %
48.7 %
NM %
63.4 %
64.5 %
66.3 %
61.7 %
45.5 %
NM %
63.0 %
The increased gross profit of 12% was primarily due to the 11% increase in net sales as well as increased
consolidated gross margin. The higher gross margin included (1) the higher gross margin of Johnny Was for a full Fiscal
2023 relative to only 19 weeks in Fiscal 2022, with Fiscal 2022 gross margin for Johnny Was impacted by purchase
accounting, (2) fewer inventory markdowns in the Emerging Brands operating group and (3) reduced freight costs resulting
primarily from lower ocean freight rates. These increases were partially offset by (1) increased e-commerce flash clearance
sales in Lilly Pulitzer, (2) increased sales during the loyalty award, Flip Side marketing, and end of season clearance events
in Tommy Bahama and (3) $7 million in higher LIFO accounting charges in Fiscal 2023 compared to Fiscal 2022. We
estimate that the 53rd week in Fiscal 2023 resulted in approximately $10 million of additional gross profit.
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Tommy Bahama:
The comparable gross margin for Tommy Bahama was primarily due to increased sales during special event
promotions, including loyalty award card, Flip Side, Friends & Family and gift with purchase events and end of season
clearance events. This decrease was partially offset by (1) reduced freight costs resulting primarily from lower ocean
freight rates, (2) improved gross margin at food & beverage locations primarily resulting from lower food costs and (3)
improved gross margin in outlet stores due primarily to the availability of newer product from full-price retail stores.
Lilly Pulitzer:
The lower gross margin for Lilly Pulitzer was primarily due to (1) a change in sales mix with flash clearance sales
representing a larger proportion of net sales, (2) higher loyalty reward discounts driven by the new loyalty program
implemented in 2023 and (3) a change in sales mix with off-price sales representing a larger proportion of wholesale sales.
These decreases were partially offset by (1) an increase in initial product margins and (2) reduced freight costs resulting
primarily from lower ocean freight rates.
Johnny Was:
Gross margin for Fiscal 2023 was 67.8% compared to 61.7% in Fiscal 2022 for the 19 weeks from September 19,
2022 through the end of Fiscal 2022. Gross margin in Fiscal 2022 was unfavorably impacted by $4 million of incremental
cost of goods sold resulting from the charge related to the step up of inventory to fair value at acquisition.
Emerging Brands:
The higher gross margin for Emerging Brands was primarily due to (1) fewer inventory markdowns and (2) a
change in sales mix with direct to consumer sales representing a greater proportion of net sales. This increase was partially
offset by lower gross margin on wholesale sales due to off-price wholesale sales of previously marked down inventory
representing a greater proportion of wholesale sales.
Corporate and Other:
The gross profit in Corporate and Other primarily includes the impact of LIFO accounting adjustments, the sales
of the Lyons, Georgia distribution center operations to third parties and the sales of the Oxford America business. The
primary driver for the decreased gross profit was the $7 million higher LIFO accounting charge. The LIFO accounting
impact in Corporate and Other in each period includes the net impact of (1) a charge in Corporate and Other when
inventory that had been marked down in an operating group in a prior period was ultimately sold, (2) a credit in Corporate
and Other when inventory had been marked down in an operating group in the current period, but had not been sold as of
period end and (3) the change in the LIFO reserve.
SG&A
SG&A
SG&A (as a % of net sales)
Notable items included in amounts above:
Amortization of Johnny Was intangible assets
Transaction expenses and integration costs associated
with the Johnny Was acquisition included in Corporate
and Other
$
$
$
Fiscal 2023
820,705
$
52.2 %
Fiscal 2022
692,004
$ Change
$ 128,701
% Change
18.6 %
49.0 %
13,852
$
5,194
— $
2,783
SG&A was $821 million in Fiscal 2023 compared to SG&A of $692 million in Fiscal 2022 with approximately
$85 million, or 66%, of the increase due to the SG&A of Johnny Was. The 19% increase in total SG&A in Fiscal 2023
included the following, each of which includes the SG&A of Johnny Was: (1) increased employment costs of $46 million,
primarily due to increased head count, pay rate increases and other employment cost increases, including in our direct to
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consumer and distribution center operations partially offset by lower incentive compensation amounts, (2) a $22 million
increase in advertising expense, (3) a $15 million increase in occupancy expenses, (4) a $12 million increase in variable
expenses related to higher sales, including credit card transaction fees, supplies, commissions, royalties and other expense,
(5) a $9 million increase in amortization of intangible assets, (6) a $6 million increase in depreciation expense and (7) a $5
million increase in administrative expenses including professional fees, travel and other items. These increases were
partially offset by the lack of $3 million in transaction expenses associated with the Johnny Was acquisition in Fiscal 2022.
We estimate that the 53rd week in Fiscal 2023 resulted in approximately $11 million of incremental SG&A.
Impairment of goodwill, intangible assets and equity method investments
As a result of the annual impairment assessments performed in the Fourth Quarter of Fiscal 2023, noncash
impairment charges for goodwill and intangible assets totaling $111 million were recognized in the Johnny Was reporting
unit. The impairment charges for Johnny Was reflect the current challenging macroeconomic environment that has resulted
in a more cautious consumer and elevated interest rates for prolonged periods. The more cautious consumer has both
negatively impacted Johnny Was’ wholesale customers and direct to consumer operations resulting in Johnny Was not
performing as originally projected for Fiscal 2023 and the moderation of forecasted revenue and operating income in future
years. Interest rates also increased significantly after the acquisition of Johnny Was in September 2022 and have remained
at elevated levels, leading to an increase in discount rates used in our impairment analyses. Refer to Note 5 in the
consolidated financial statements included in this report for additional disclosure regarding the Johnny Was impairment
charges recognized in Fiscal 2023. There were no impairment charges for goodwill or intangible assets in Fiscal 2022.
In the Fourth Quarter of Fiscal 2023, we also recognized noncash impairment charges of $2 million related to an
equity method investment in a smaller lifestyle brand that resulted from the entity’s forecast of future losses. Refer to
“Equity Investments in Unconsolidated Entities” in Note 1 in the consolidated financial statements for additional disclosure
regarding the impairment charge recognized in Fiscal 2023. There were no impairment charges for equity method
investments in Fiscal 2022.
Royalties and other operating income
Royalties and other operating income
Notable items included in amounts above:
Gain on sale of Merida manufacturing facility
$
$
19,713
(1,756)
$
$
21,923
$
(2,210)
(10.1)%
—
Fiscal 2023
Fiscal 2022
$ Change
% Change
Royalties and other operating income typically consist of royalty income received from third parties from the
licensing of our brands. Royalty income in Fiscal 2023 decreased by $2 million primarily due to (1) $2 million of lower
royalties and other operating income in Tommy Bahama resulting from lower sales of our licensing partners and (2) a $2
million loss recognized in the Tommy Bahama Miramonte Resort & Spa reflected in Corporate and Other. The Tommy
Bahama Miramonte Resort & Spa was remodeled and rebranded during Fiscal 2023 which led to increased expenses
during the remodel and relaunch periods. These decreases were partially offset by a $2 million gain on the sale of the
Merida manufacturing facility in Mexico in Fiscal 2023.
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Operating income
Tommy Bahama
Lilly Pulitzer
Johnny Was
Emerging Brands
Corporate and Other
Consolidated operating income
Notable items included in amounts above:
LIFO adjustments in Corporate and Other
Inventory step-up charge included in Johnny Was
Amortization of Johnny Was intangible assets
Transaction expenses and integration costs associated
with the Johnny Was acquisition included in Corporate
and Other
Johnny Was goodwill and intangible asset impairment
charge
Impairment of investment in unconsolidated entity
Gain on sale of Merida manufacturing facility
$
$
$
$
$
$
$
$
$
Fiscal 2023
Fiscal 2022
160,543
56,110
(104,776)
6,714
(37,609)
80,982
$
$
9,605
$
— $
$
13,852
172,761
67,098
(1,544)
15,602
(35,143)
218,774
2,667
4,230
5,194
— $
2,783
$
111,136
2,475
$
(1,756) $
—
—
—
$ Change
$ (12,218)
(10,988)
(103,232)
(8,888)
(2,466)
$ (137,792)
% Change
(7.1)%
(16.4)%
NM %
(57.0)%
NM %
(63.0)%
Operating income was $81 million in Fiscal 2023 compared to $219 million in Fiscal 2022. The decreased
operating income included lower operating income in all operating groups including an increased operating loss in
Corporate and Other. Changes in operating income (loss) by operating group are discussed below.
Tommy Bahama:
Net sales
Gross profit
Gross margin
Operating income
Operating income as % of net sales
$
$
$
Fiscal 2023
Fiscal 2022
$ Change
% Change
898,807
579,118
$
$
64.4 %
$
17.9 %
160,543
880,233
567,557
$
$
64.5 %
$
19.6 %
172,761
18,574
11,561
2.1 %
2.0 %
(12,218)
(7.1)%
The decreased operating income for Tommy Bahama was primarily due to (1) increased SG&A and (2) lower
royalty income. These decreases were partially offset by higher sales. The increased SG&A was primarily due to (1) $14
million of increased employment costs, (2) a $4 million increase in advertising expense, (3) $4 million of increased
variable expenses and (4) a $1 million increase in occupancy expenses. These increases were partially offset by a $3
million decrease in administrative expenses including professional fees, travel and other items.
Lilly Pulitzer:
Net sales
Gross profit
Gross margin
Operating income
Operating income as % of net sales
$
$
$
Fiscal 2023
Fiscal 2022
$ Change
% Change
343,499
226,206
$
$
65.9 %
$
16.3 %
56,110
339,266
225,028
$
$
66.3 %
$
19.8 %
67,098
4,233
1,178
1.2 %
0.5 %
(10,988)
(16.4)%
The decreased operating income for Lilly Pulitzer was due to (1) increased SG&A and (2) lower gross margin.
These decreases were partially offset by higher sales. The increased SG&A was primarily due to (1) $4 million of
increased employment costs, (2) $4 million of increased depreciation and (3) $2 million of increased variable expenses.
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Johnny Was:
Net sales
Gross profit
Gross margin
Operating loss
Operating loss as % of net sales
Notable items included in amounts above:
Johnny Was goodwill and intangible asset
impairment charge
Inventory step-up charge included in Johnny Was
Amortization of Johnny Was intangible assets
$
$
$
$
$
$
Fiscal 2023
Fiscal 2022
% Change
202,859
137,567
$
$
67.8 %
$
(51.6)%
(104,776)
111,136
$
— $
$
13,852
$ Change
130,268
92,802
72,591
44,765
$
$
61.7 %
NM %
NM %
(1,544)
$ (103,232)
NM %
(2.1)%
—
4,230
5,194
The operating results for Johnny Was in Fiscal 2023 include a full year of operations. Fiscal 2022 only included
the 19 weeks from September 19, 2022, through the end of the fiscal year. The lower operating results for Johnny Was in
Fiscal 2023 were primarily due to (1) the $111 million impairment charge for goodwill and intangible assets in the Fourth
Quarter of Fiscal 2023, (2) a $9 million increase in amortization of intangible assets and (3) $1 million of costs associated
with the implementation of a new e-commerce platform. These decreases were offset by the absence of $4 million of
inventory step-up charges recorded in Fiscal 2022.
Emerging Brands:
Net sales
Gross profit
Gross margin
Operating income
Operating income as % of net sales
Notable items included in amounts above:
Impairment of investment in unconsolidated entity
$
$
$
$
Fiscal 2023
Fiscal 2022
$ Change
% Change
126,825
61,798
$
$
48.7 %
$
5.3 %
6,714
116,484
53,012
$
$
45.5 %
$
13.4 %
15,602
10,341
8,786
8.9 %
16.6 %
(8,888)
(57.0)%
2,475
$
—
The decreased operating income for Emerging Brands was due to (1) increased SG&A and (2) an impairment
charge in an unconsolidated entity. These decreases were partially offset by (1) higher sales and (2) higher gross margin.
The increased SG&A included (1) higher SG&A associated with new retail store operations, including related employment
costs, occupancy costs and administrative expenses, (2) higher advertising expense and (3) increased variable expenses
resulting from increased sales.
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Corporate and Other:
Fiscal 2023
Fiscal 2022
$ Change
% Change
Net sales
Gross profit
Operating loss
Notable items included in amounts above:
LIFO adjustments in Corporate and Other
Transaction expenses and integration costs
associated with the Johnny Was acquisition
Gain on sale of Merida manufacturing facility
$
$
$
$
$
$
(515)
(9,104)
(37,609)
9,605
$
$
$
$
— $
$
(1,756)
2,954
(1,507)
(35,143)
$
$
$
(3,469)
(7,597)
(2,466)
(117.4)%
NM %
NM %
2,667
2,783
—
The increased operating loss in Corporate and Other was primarily a result of (1) the $7 million higher LIFO
accounting charge in Fiscal 2023 relative to Fiscal 2022 and (2) a $2 million equity investment loss associated with the
Tommy Bahama Miramonte Resort & Spa. This decrease was partially offset by (1) decreased SG&A, including decreased
incentive compensation amounts, (2) a $2 million gain on the sale of the Merida manufacturing facility in Mexico and (3)
the lack of $3 million of transaction expenses and integration costs associated with the Johnny Was acquisition incurred in
Fiscal 2022.
Interest expense, net
Interest expense, net
Fiscal 2023
Fiscal 2022
$ Change
% Change
$
6,036
$
3,049
$
2,987
98.0 %
The higher interest expense in Fiscal 2023 was primarily due to a higher average outstanding debt balance and
increased interest rates during Fiscal 2023 than Fiscal 2022. We expect average debt levels in Fiscal 2024 to be lower than
Fiscal 2023.
Income taxes
Income tax expense
Effective tax rate
Fiscal 2023
Fiscal 2022
$ Change
% Change
$
14,243
$
19.0 %
49,990
$
23.2 %
(35,747)
(71.5)%
Both Fiscal 2023 and Fiscal 2022 benefitted from the net favorable impact of certain items that resulted in a lower
tax rate than the more typical annual effective tax rate of approximately 25%. Thus, the effective tax rates for Fiscal 2023
and Fiscal 2022 are not indicative of the effective tax rate expected in future periods. Refer to Note 11 of our consolidated
financial statements included in this report for our income tax rate reconciliation and other information about our income
tax expense for Fiscal 2023 and Fiscal 2022.
The income tax expense in Fiscal 2023 included the benefit of the vesting of restricted stock awards at a price
significantly higher than the grant date fair value, the favorable utilization of research and development tax credits, changes
in the fair value of life insurance policies associated with our deferred compensation plans and certain adjustments to the
U.S. taxation on foreign earnings. These favorable items were partially offset by unfavorable items related to the non-
deductible amounts associated with executive compensation.
The income tax expense in Fiscal 2022 included the benefit of the reversal of $2 million of valuation allowances
associated with net operating loss carry-forward amounts, the utilization of net operating loss carry-forward amounts to
offset current year income in certain jurisdictions, a favorable provision to return adjustment and the impact of the vesting
of employee stock awards. These favorable items were partially offset by various unfavorable items related to non-
deductible amounts associated with executive compensation, changes in the fair value of life insurance policies associated
with our deferred compensation plans and other items.
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Net earnings
Net sales
Operating income
Net earnings
Net earnings per diluted share
Weighted average shares outstanding - diluted
$
$
$
$
Fiscal 2023
Fiscal 2022
1,571,475
80,982
60,703
3.82
15,906
$
$
$
$
1,411,528
218,774
165,735
10.19
16,259
Net earnings per diluted share were $3.82 in Fiscal 2023 compared to $10.19 in Fiscal 2022. The 63% decrease in
net earnings per diluted share included a 63% decrease in net earnings as well as a 2% reduction in weighted average
shares outstanding due to open market share repurchases in Fiscal 2022 and Fiscal 2023. The decreased net earnings were
primarily due to (1) lower operating income at Johnny Was primarily due to the $111 million Johnny Was impairment
charge recognized in the Fourth Quarter of Fiscal 2023, (2) lower operating income at Tommy Bahama, Lilly Pulitzer, and
Emerging Brands, (3) increased interest expense, (4) a higher operating loss at Corporate and Other and (5) lower royalty
income. These decreases were partially offset by a lower effective tax rate.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of
branded apparel products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide,
TBBC, Duck Head and Jack Rogers lifestyle brands. We primarily distribute our products to our customers via direct to
consumer channels of distribution, but we also distribute our products via wholesale channels of distribution.
Our primary uses of cash flow include the purchase of our branded apparel products from third party suppliers
located outside of the United States, as well as operating expenses, including employee compensation and benefits,
operating lease commitments and other occupancy-related costs, marketing and advertising costs, information technology
costs, variable expenses, distribution costs, other general and administrative expenses and the periodic payment of interest.
Additionally, we use our cash to fund capital expenditures and other investing activities, dividends, share repurchases and
repayment of indebtedness, if any. In the ordinary course of business, we maintain certain levels of inventory, extend credit
to our wholesale customers and pay our operating expenses. Thus, we require a certain amount of ongoing working capital
to operate our business. Our need for working capital is typically seasonal with the greatest working capital requirements to
support our larger spring, summer and holiday direct to consumer seasons. Our capital needs depend on many factors
including the results of our operations and cash flows, future growth rates, the need to finance inventory levels and the
success of our various products.
We have a long history of generating sufficient cash flows from operations to satisfy our cash requirements for our
ongoing capital expenditure needs as well as payment of dividends and repayment of our debt. Thus, we believe our
anticipated future cash flows from operating activities will provide (1) sufficient cash over both the short and long term to
satisfy our ongoing operating cash requirements, (2) ample funds to continue to invest in our lifestyle brands, direct to
consumer initiatives and information technology projects, (3) additional cash flow to repay outstanding debt and (4)
sufficient cash for other strategic initiatives. Also, if cash inflows are less than cash outflows, we have access to amounts
under our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit
Agreement”), subject to its terms, which is described below.
Working Capital
($ in thousands)
Total current assets
Total current liabilities
Working capital
Working capital ratio
February 3,
2024
$ 293,115
$ 240,644
52,471
$
1.22
January 28,
2023
$ 330,463
$ 269,639
60,824
$
1.23
$ Change
% Change
$
$
(37,348)
(28,995)
(8,353)
(11.3)%
(10.8)%
(13.7)%
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Our working capital ratio is calculated by dividing total current assets by total current liabilities. Current assets as
of February 3, 2024 decreased from January 28, 2023 primarily due to decreased inventories of $61 million. These
decreases were partially offset by an increase in (1) receivables of $19 million and (2) prepaid expenses and other current
assets of $5 million. Current liabilities as of February 3, 2024 decreased from January 28, 2023 primarily due to decreases
in (1) accrued compensation of $11 million driven primarily by decreased accrued incentive compensation, (2) accounts
payable of $9 million and (3) current operating lease liabilities of $9 million.
Balance Sheet
The following tables set forth certain information included in our consolidated balance sheets (in thousands).
Below each table are explanations for any significant changes in the balances as of February 3, 2024 as compared to
January 28, 2023.
Current Assets:
Cash and cash equivalents
Receivables, net
Inventories, net
Income tax receivable
Prepaid expenses and other current assets
Total current assets
February 3,
2024
$
7,604
63,362
159,565
19,549
43,035
$ 293,115
January 28,
2023
$
8,826
43,986
220,138
19,440
38,073
$ 330,463
$ Change
% Change
$
$
(1,222)
19,376
(60,573)
109
4,962
(37,348)
(13.8)%
44.1 %
(27.5)%
0.6 %
13.0 %
(11.3)%
Cash and cash equivalents were $8 million as of February 3, 2024, compared to $9 million as of January 28, 2023.
The cash and cash equivalents balance as of February 3, 2024 and January 28, 2023 represent typical cash amounts
maintained on an ongoing basis in our operations, which generally ranges from $5 million to $10 million at any given time.
Any excess cash is generally used to repay amounts outstanding under our U.S. Revolving Credit Agreement.
The increased receivables, net as of February 3, 2024, was primarily due to (1) higher wholesale trade receivables
resulting primarily from higher wholesale sales in Tommy Bahama and Lilly Pulitzer in the Fourth Quarter of Fiscal 2023,
(2) increased tenant improvement allowance receivables due from landlords resulting from our increased store openings
during Fiscal 2023 and (3) an insurance claim filed as a result of the wildfire on the island of Maui that destroyed the
Tommy Bahama Marlin Bar in Lahaina, Hawaii in the Third Quarter of Fiscal 2023.
Inventories, net, included a $83 million and $76 million LIFO reserve as of February 3, 2024, and January 28, 2023,
respectively. Inventories decreased in our Tommy Bahama, Lilly Pulitzer and Emerging Brands operating groups primarily
due to continuing initiatives to focus on closely managing inventory purchases and reducing on-hand inventory levels. We
believe that inventory levels in all operating groups are appropriate to support anticipated sales plans.
The increase in prepaid expenses and other current assets as of February 3, 2024, was primarily due to an increase in
prepaid software costs.
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Non-current Assets:
Property and equipment, net
Intangible assets, net
Goodwill
Operating lease assets
Other assets, net
Deferred income taxes
Total non-current assets
February 3,
2024
$ 195,137
262,101
27,190
263,934
32,188
24,179
$ 804,729
January 28,
2023
$ 177,584
283,845
120,498
240,690
32,209
3,376
$ 858,202
$ Change
% Change
$
$
17,553
(21,744)
(93,308)
23,244
(21)
20,803
(53,473)
9.9 %
(7.7)%
(77.4)%
9.7 %
(0.1)%
616.2 %
(6.2)%
Property and equipment, net as of February 3, 2024, increased primarily due to the capital expenditures exceeding
depreciation during Fiscal 2023.
The decrease in goodwill and intangible assets, net as of February 3, 2024, was primarily due to the $99 million
and $12 million goodwill and intangible assets, net, impairment charges in Johnny Was during Fiscal 2023, respectively, as
discussed in Note 5 of our consolidated financial statements included in this report. Intangible assets, net as of February 3,
2024, further decreased due to the amortization of intangible assets acquired in the acquisition of Johnny Was. The
decrease in goodwill resulting from the Johnny Was impairment charge was partially offset by (1) the acquisition of Jack
Rogers, (2) the acquisition of six former Southern Tide signature stores and (3) measurement period adjustments related to
the acquisition of Johnny Was.
Operating lease assets as of February 3, 2024, increased primarily due to the addition of new leased locations, or
the extension of existing leased locations, exceeding the recognition of amortization related to existing operating leases and
the termination or reduced term of certain operating leases.
Deferred income taxes increased as of February 3, 2024, due primarily to the impairment of the Johnny Was
goodwill and intangible asset balances that resulted in a change from a net deferred income tax liability position to a net
deferred income tax asset position.
Liabilities:
Total current liabilities
Long-term debt
Non-current portion of operating lease liabilities
Other non-current liabilities
Deferred income taxes
Total liabilities
February 3,
2024
$ 240,644
29,304
243,703
23,279
—
$ 536,930
January 28,
2023
$ 269,639
119,011
220,709
20,055
2,981
$ 632,395
$ Change
% Change
$
$
(28,995)
(89,707)
22,994
3,224
(2,981)
(95,465)
(10.8)%
— %
10.4 %
16.1 %
(100.0)%
(15.1)%
Current liabilities decreased as of February 3, 2024, primarily due to (1) decreases in accounts payable, which was
primarily due to decreased payables associated with lower inventory in transit, (2) decreases in accrued incentive
compensation and (3) lower current operating lease related liabilities resulting from lease payments partially offset by the
addition and extension of several leased locations. During Fiscal 2023, several new leased locations were added, and
several locations were extended, which led to the addition of primarily non-current operating lease liabilities.
The reduction in long-term debt was the result of continuing initiatives to pay down our long-term debt balance.
Deferred income taxes decreased as of February 3, 2024, due primarily to the impairment of the Johnny Was
goodwill and intangible asset balances that resulted in a change from a net deferred income tax liability position to a net
deferred income tax asset position.
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Statement of Cash Flows
The following table sets forth the net cash flows resulting in the change in our cash and cash equivalents (in
thousands):
Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities
Net change in cash and cash equivalents
Fiscal 2023 Fiscal 2022 Fiscal 2021
$ 198,006
$ 125,610
$ 244,284
(181,572)
(151,747)
(83,981)
(161,172)
(38,175)
(11,527)
(869) $ (37,664) $ (21,741)
$
Cash and cash equivalents were $8 million as of February 3, 2024, compared to $9 million as of January 28, 2023.
Changes in cash flows in Fiscal 2023 and Fiscal 2022 related to operating activities, investing activities and financing
activities are discussed below.
Operating Activities:
In Fiscal 2023 and Fiscal 2022, operating activities provided $244 million and $126 million of cash, respectively.
The cash flow from operating activities for each period primarily consisted of net earnings for the relevant period adjusted,
as applicable, for non-cash activities including impairment charges, depreciation, amortization, equity-based compensation,
gains on sale of assets and other non-cash items as well as the net impact of changes in deferred income taxes and
operating assets and liabilities. In Fiscal 2023, changes in operating assets and liabilities had a slightly unfavorable impact
on cash flow from operations primarily driven by decreases in current liabilities and increases in prepaid expenses and
receivables partially offset by significant decreases in inventory balances. In Fiscal 2022 the changes in operating assets
and liabilities had a significant net unfavorable impact on cash flow from operations driven primarily by increases in
inventory and prepaid expenses.
Investing Activities:
In Fiscal 2023 and Fiscal 2022, investing activities used $84 million and $152 million of cash, respectively. On an
ongoing basis, our cash flow primarily consists of our capital expenditures, which totaled $74 million and $47 million in
Fiscal 2023 and Fiscal 2022, respectively.
In addition to our capital expenditures in Fiscal 2023, we paid (1) $12 million during Fiscal 2023 associated with
acquisitions, including Jack Rogers and six former Southern Tide Signature Stores, and a working capital settlement
associated with the acquisition of Johnny Was. We also received $2 million from the sale of the Merida manufacturing
facility in Mexico. During Fiscal 2022, we paid $264 million for the acquisition of Johnny Was and also converted $165
million of short-term investments into cash to fund a portion of the acquisition.
In Fiscal 2024, our cash flow used in investing activities is expected to primarily consist of our capital expenditure
investments in (1) the multi-year project to build a new distribution center in the Southeastern United States (2) direct to
consumer operations, including opening, relocating and remodeling locations and (3) information technology initiatives,
including e-commerce capabilities.
Financing Activities:
In Fiscal 2023 and Fiscal 2022, financing activities used $161 million and $12 million of cash, respectively. In
Fiscal 2023, we repurchased $30 million of shares, including repurchased shares of our stock pursuant to an open market
stock repurchase program and equity awards in respect of employee tax withholding liabilities; paid $42 million of
dividends; and paid $2 million in deferred financing costs associated with the amendment of the U.S. Revolving Credit
Agreement. In Fiscal 2022, we repurchased $95 million of shares, including repurchased shares of our stock pursuant to an
open market stock repurchase program and of equity awards in respect of employee tax withholding liabilities; paid
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$35 million of dividends; and paid $2 million of contingent consideration for the final contingent consideration payment
related to the TBBC acquisition.
If net cash requirements are less than our net cash flows, we may repay amounts outstanding on our U.S.
Revolving Credit Agreement, if any, consistent with our net repayment of $90 million of long-term debt in Fiscal 2023.
Alternatively, to the extent we are in a net debt position and our net cash requirements exceed our net cash flows, we may
borrow amounts from our U.S. Revolving Credit Agreement consistent with our borrowing of $119 million in Fiscal 2022
to fund our investing and financing activities that exceeded cash flow from operations.
Liquidity and Capital Resources
We have a long history of generating sufficient cash flows from operations to satisfy our cash requirements for our
ongoing capital expenditure needs as well as payment of dividends and repayment of our debt. Thus, we believe our
anticipated future cash flows from operating activities will provide (1) sufficient cash over both the short and long term to
satisfy our ongoing operating cash requirements, (2) ample funds to continue to invest in our lifestyle brands, the project to
build a new distribution center in the Southeastern United States, direct to consumer initiatives and information technology
projects, (3) additional cash flow to repay outstanding debt and (4) sufficient cash for other strategic initiatives.
Our capital needs depend on many factors including the results of our operations and cash flows, future growth
rates, the need to finance inventory and the success of our various products. To the extent cash flow needs in the future
exceed cash flow provided by our operations, we will have access, subject to its terms, to our U.S. Revolving Credit
Agreement to provide funding for operating activities, capital expenditures and acquisitions, if any, and any other investing
or financing activities.
Our cash and debt, as well as availability, levels in future periods will not be comparable to historical amounts,
particularly after the completion of the acquisition of Johnny Was in Fiscal 2022. Further, we continue to assess, and may
possibly make changes to, our capital structure, which we may achieve by borrowing from additional credit facilities,
selling debt or equity securities or repurchasing additional shares of our stock in the future. Changes in our capital
structure, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other
factors. The amounts involved may be material.
$325 Million U.S. Revolving Credit Agreement
On March 6, 2023, we amended the U.S. Revolving Credit Agreement to, among other things, mature in March
2028. As of February 3, 2024, we had borrowings of $29 million, issued standby letters of credit of $5 million, and
availability of $288 million under the U.S. Revolving Credit Agreement. The U.S. Revolving Credit Agreement amended
and restated our Fourth Amended and Restated Credit Agreement (the “Prior Credit Agreement”).
Pursuant to the U.S. Revolving Credit Agreement, the interest rate applicable to our borrowings under the U.S.
Revolving Credit Agreement is based on either the Term Secured Overnight Financing Rate plus an applicable margin of
135 to 185 basis points or prime plus an applicable margin of 25 to 75 basis points.
The U.S. Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified
percentages of eligible categories of assets, (2) accrues variable-rate interest (weighted average interest rate of 7% as of
February 3, 2024), unused line fees and letter of credit fees based upon average utilization or unused availability, as
applicable, (3) requires periodic interest payments with principal due at maturity and (4) is secured by a first priority
security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts
receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory,
investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies,
supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal
property.
The U.S. Revolving Credit Agreement is subject to several affirmative covenants regarding the delivery of
financial information, compliance with law, maintenance of property, insurance requirements and conduct of business.
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Also, the U.S. Revolving Credit Agreement is subject to certain negative covenants or other restrictions including, among
other things, limitations on our ability to (1) incur debt, (2) guaranty certain obligations, (3) incur liens, (4) pay dividends
to shareholders, (5) repurchase shares of our common stock, (6) make investments, (7) sell assets or stock of subsidiaries,
(8) acquire assets or businesses, (9) merge or consolidate with other companies or (10) prepay, retire, repurchase or redeem
debt.
Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess
availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10%
of availability. In such a case, our fixed charge coverage ratio as defined in the U.S. Revolving Credit Agreement must not
be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered.
This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit
Agreement of more than the greater of (1) $23.5 million or (2) 10% of availability for 30 consecutive days.
We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the
U.S. Revolving Credit Agreement are customary for those included in similar facilities entered into at the time we amended
the U.S. Revolving Credit Agreement. During Fiscal 2023 and as of February 3, 2024, no financial covenant testing was
required pursuant to our U.S. Revolving Credit Agreement or the Prior Credit Agreement, as applicable, as the minimum
availability threshold was met at all times. As of February 3, 2024, we were compliant with all applicable covenants related
to the U.S. Revolving Credit Agreement.
Operating Lease Commitments:
In the ordinary course of business, we enter into long-term real estate lease agreements for our direct to consumer
locations, which include both retail store and food and beverage locations, and office and warehouse/distribution space, as
well as leases for certain equipment. Our real estate leases have varying terms and expirations and may have provisions to
extend, renew or terminate the lease agreement at our discretion, among other provisions. Our real estate lease terms are
typically for a period of 10 years or less and typically require monthly rent payments with specified rent escalations during
the lease term. Our real estate leases usually provide for payments of our pro rata share of real estate taxes, insurance and
other operating expenses applicable to the property, and certain of our leases require payment of sales taxes on rental
payments. Also, our direct to consumer location leases often provide for contingent rent payments based on sales if certain
sales thresholds are achieved. Base rent amounts specified in the leases are included in determining the operating lease
liabilities included in our consolidated balance sheet, while amounts for real estate taxes, sales tax, insurance, other
operating expenses and contingent rent applicable to the properties pursuant to the respective leases are not included in
determining the operating lease liabilities included in our consolidated balance sheets.
These leases require us to make a substantial amount of cash payments on an annual basis. Base rent amounts
required to be paid in the future over the remaining lease terms under our existing leases as of February 3, 2024, totaled
$368 million, including $79 million, $64 million, $58 million, $45 million and $39 million of required payments in each of
the next five years. Additionally, amounts for real estate taxes, sales tax, insurance, other operating expenses and
contingent rent applicable to the properties pursuant to the respective operating leases are required to be paid in the future,
but the amounts payable in future periods are, in most cases, not quantified in the lease agreement or are dependent on
factors which may not be known at this time. Such amounts incurred in Fiscal 2023 totaled $48 million.
Refer to Note 1 and Note 7 of our consolidated financial statements for additional disclosures about our operating
lease agreements and related commitments.
Capital Expenditures:
We anticipate capital expenditures for Fiscal 2024 to increase compared to the $74 million in Fiscal 2023. The
planned increase is primarily due the commencement of a significant multi-year project at our new Lyons, Georgia
distribution center to modernize the operations into a more efficient e-commerce distribution center for our brands,
increased investment in our various technology systems initiatives, increased Marlin Bar openings and increases in store
openings in Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide and TBBC. Our capital expenditure amounts in
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future years will fluctuate from the amounts incurred in prior years depending on the investments we believe appropriate
for that year to support future expansion of our businesses.
Dividends:
On March 25, 2024, our Board of Directors approved a cash dividend of $0.67 per share payable on May 3, 2024
to shareholders of record as of the close of business on April 19, 2024.
Although we have paid dividends each quarter since we became a public company in July 1960, including $42
million in total, or $2.60 per common share, in Fiscal 2023, we may discontinue or modify dividend payments at any time
if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of
capital expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash
flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt
instruments or applicable law limit our ability to pay dividends. We may borrow to fund dividends or repurchase shares in
the short term subject to the terms and conditions of our credit facility, other debt instruments and applicable law. All cash
flow from operations will not be paid out as dividends. For details about limitations on our ability to pay dividends, see the
discussion of our U.S. Revolving Credit Agreement above and in Note 6 of our consolidated financial statements contained
in this report.
Share Repurchases:
As disclosed in our Quarterly Report on Form 10-Q for the Third Quarter of Fiscal 2021, and in subsequent
filings, on December 7, 2021, our Board of Directors authorized us to spend up to $150 million to repurchase shares of our
stock. This authorization superseded and replaced all previous authorizations to repurchase shares of our stock and has no
automatic expiration. Pursuant to the Board of Directors’ authorization, we entered into a $20 million open market stock
repurchase program (Rule 10b5-1 plan) in the First Quarter of Fiscal 2023 to acquire shares of our stock, under which we
repurchased shares of our stock totaling: (1) $19 million in Second Quarter of Fiscal 2023 and (2) $1 million in the Third
Quarter of Fiscal 2023, which completed the purchases pursuant to the open market stock repurchase program. Over the
life of the $20 million open market repurchase program we repurchased 196,000 shares, or 1% of our outstanding shares at
the commencement of the program for an average price of $102 per share.
After considering the repurchases during Fiscal 2023, as of February 3, 2024, there were no amounts remaining
under the open market repurchase program and $30 million remaining under the Board of Directors’ authorization.
Other Liquidity Items:
We have not entered into agreements which meet the SEC’s definition of an off balance sheet financing
arrangement, other than operating leases, and have made no financial commitments or guarantees with respect to any
unconsolidated subsidiaries or special purpose entities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with GAAP in a consistent manner. The preparation of these
financial statements requires the selection and application of accounting policies. Further, the application of GAAP
requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities,
revenues and expenses and related disclosures. We base our estimates on historical experience, current trends and various
other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions. We believe it is possible
that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and
support a range of alternative estimated amounts. We believe that we have appropriately applied our critical accounting
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policies. However, in the event that inappropriate assumptions or methods were used relating to the critical accounting
policies, our consolidated statements of operations could be materially misstated.
A detailed summary of significant accounting policies is included in Note 1 of our consolidated financial
statements contained in this report. The following is a brief discussion of the more significant estimates, assumptions and
judgments we use or the amounts most sensitive to change from outside factors.
Revenue Recognition and Accounts Receivable
Our revenue consists of direct to consumer sales, including our retail store, e-commerce and food and beverage
operations, and wholesale sales, as well as royalty income, which is included in royalties and other income in our
consolidated statements of operations. We recognize revenue when performance obligations under the terms of the
contracts with our customers are satisfied, which generally occurs when we deliver our products to our direct to consumer
and wholesale customers.
In our direct to consumer operations, which represented 80% of our consolidated net sales in Fiscal 2023,
consumers have certain rights to return product within a specified period and are eligible for certain point of sale discounts.
We make estimates of reserves for products which were sold prior to the balance sheet date but that we anticipate may be
returned by the consumer subsequent to that date. The determination of direct to consumer return reserve amounts requires
judgment and consideration of historical and current trends, evaluation of current economic trends and other factors. As of
February 3, 2024, our direct to consumer return reserve liability was $13 million compared to $12 million as of
January 28, 2023. A 10% change in the direct to consumer sales return reserve as of February 3, 2024 would have had an
impact of less than $1 million on net earnings in Fiscal 2023.
In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising
support to some of our wholesale accounts for certain products. As certain allowances, other deductions and returns are not
finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts,
allowances and returns on an ongoing basis to estimate the consideration from the customer that we expect to ultimately
receive. Significant considerations in determining our estimates for these amounts for wholesale customers may include
historical and current trends, agreements with customers, projected seasonal or program results, an evaluation of current
economic conditions, specific program or product expectations and retailer performance. As of February 3, 2024, our total
reserves for discounts, returns and allowances for our wholesale businesses were $3 million compared to $4 million as of
January 28, 2023. If these allowances changed by 10% it would have had an impact of less than $1 million on net earnings
in Fiscal 2023.
We extend credit to certain wholesale customers based on an evaluation of the customer’s financial capacity and
condition, usually without requiring collateral. We recognize estimated provisions for credit losses based on our historical
collection experience, the financial condition of our customers, an evaluation of current economic conditions, anticipated
trends, and the risk characteristics of the receivables, each of which is subjective and requires certain assumptions. As of
both February 3, 2024 and January 28, 2023, our provision for credit losses for our wholesale receivables was $1 million. If
the provision for credit losses changed by 10% it would have had an impact of less than $1 million on net earnings in
Fiscal 2023.
Inventories, net
For operating group reporting, our inventory is carried at the lower of the first-in, first-out (“FIFO”) cost or
market. We evaluate the composition of our inventories for identification of distressed inventory at least quarterly. We
estimate the amount of goods that we will not be able to sell in the normal course of business and write down the value of
these goods as necessary. As the amount to be ultimately realized for the goods is not necessarily known at period end, we
must use certain assumptions considering historical experience, inventory quantity, quality, age and mix, historical sales
trends, future sales projections, consumer and retailer preferences, market trends, general economic conditions and our
anticipated plans to sell the inventory.
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For consolidated financial reporting, $146 million, or 92%, of our inventories were valued at the lower of the last-
in, first-out (“LIFO”) cost or market after deducting the $83 million LIFO reserve as of February 3, 2024. The remaining
$13 million of our inventories were valued at the lower of FIFO cost or market as of February 3, 2024. LIFO reserves are
based on the Producer Price Index (“PPI”) as published by the United States Department of Labor. We write down
inventories valued at the lower of LIFO cost or market when LIFO cost exceeds market value.
As of February 3, 2024, we had recorded a reserve of $4 million related to inventory on the lower of FIFO cost or
market method and for inventory on the lower of LIFO cost or market method with markdowns in excess of our LIFO
reserve. A 10% change in the amount of such markdowns would have had an impact of less than $1 million on net earnings
in Fiscal 2023. A change in the markdowns of our inventory valued at the lower of LIFO cost or market method that is not
marked down in excess of our LIFO reserve typically would not be expected to have a material impact on our consolidated
financial statements. A change in inventory levels, the mix of inventory by category or the PPI at the end of future
fiscal years compared to amounts as of February 3, 2024 could result in a material impact on our consolidated financial
statements in the future.
Given the significant amount of uncertainty surrounding the year-end LIFO calculation, including the estimate
of year-end inventory balances, the proportion of inventory in each category and the year-end PPI, we have not typically
adjusted our LIFO reserve in the first three quarters of a fiscal year. However, due to changes in the levels of inflation
throughout Fiscal 2023, in addition to our Fourth Quarter adjustment at the end of Fiscal 2023, we also recognized an
adjustment to the LIFO reserve in the Third Quarter of Fiscal 2023. Our policy of typically not adjusting the LIFO reserve
at interim periods may result in significant LIFO accounting adjustments in the Fourth Quarter of the fiscal year. We do
recognize changes in markdown reserves during each quarter of the fiscal year as those amounts can be estimated on an
interim basis.
Business Combinations
From time-to-time, we make strategic acquisitions that may have a material effect on our consolidated results of
operations and financial position. The measurement principle for the assets acquired and the liabilities assumed in a
business combination is at estimated fair value as of the acquisition date, with certain exceptions.
At acquisition, we use estimates that can be complex and require significant judgments to record the fair value of
purchased intangible assets, which primarily consist of trademarks, as well as customer relationships and reacquired rights.
The fair values and useful lives of these intangible assets are estimated based on our assessment as well as independent
third party appraisals in some cases. Additionally, at acquisition we must determine whether the intangible asset has an
indefinite or finite life and account for it accordingly. Refer to Note 5 for additional details about intangible assets.
Goodwill is recognized as the amount by which the cost to acquire a business exceeds the fair value of identified
tangible and intangible assets acquired, net of assumed liabilities. Thus, the amount of goodwill recognized in connection
with a business combination depends on the fair values assigned to the individual assets acquired and liabilities assumed in
a business combination. Goodwill is allocated to the respective reporting unit at the time of acquisition. Refer to “Note 5—
Intangible Assets and Goodwill Intangible Assets and Goodwill” for additional information about our goodwill amounts.
At acquisition, assumptions and estimates about various items with significant uncertainty are required to
determine the fair value of intangible assets and goodwill. When determining the fair value of intangible assets, including
trademarks, customer relationships and other items, significant assumptions may include our planned use of the asset as
well as estimates of net sales, royalty income, operating income, growth rates, royalty rates for the trademarks, a risk-
adjusted, market-based cost of capital for the discount rates, income tax rates, anticipated cash flows and probabilities of
cash flows, among other factors. Our fair value assessment may also consider any comparable market transactions. The use
of different assumptions related to these uncertain factors at acquisition could result in a material change to the amounts of
intangible assets and goodwill initially recorded at acquisition, which could result in a material impact on our consolidated
financial statements.
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The acquisition method requires us to record provisional amounts for any items for which the accounting is not
complete at the end of a reporting period. We must complete the accounting during the measurement period, which cannot
exceed one year. Adjustments made during the measurement period could have a material impact on our financial condition
and results of operations. If our operating results, plans for the acquired business and/or macroeconomic conditions,
anticipated results or other assumptions change after an acquisition, it could result in the impairment of the acquired
intangible assets or goodwill. Also, a change in macroeconomic conditions may not only impact the estimated operating
cash flows used in our cash flow models but may also impact other assumptions used in our analysis, including but not
limited to, the risk-adjusted market-based cost of capital and/or discount rates.
Goodwill and Intangible Assets, net
We test goodwill for impairment at the reporting unit level annually on the first day of the fourth quarter and more
often if an event occurs or circumstances change that indicate the fair value of a reporting unit is below its carrying
amount. We have the option to first assess qualitative factors to determine whether it is more likely than not that goodwill
is impaired to determine whether it is necessary to perform the quantitative impairment test. We also have the option to
bypass the qualitative assessment entirely for any reporting unit in any period and proceed directly to performing the
quantitative impairment test. For each impairment test of goodwill in Fiscal 2023, Fiscal 2022 and Fiscal 2021, we
bypassed the qualitative test option and instead performed a quantitative test.
When applying the quantitative assessment, we determine the fair value of our reporting units based on an income
approach, or in some cases a combination of an income approach and market approach. The income approach calculates a
value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of
similarly situated guideline public companies. Determining the fair value of a reporting unit involves judgment and the use
of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating
margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market
conditions. If an annual or interim analysis indicates an impairment of goodwill, the amount of the impairment is
recognized in our consolidated financial statements based on the amount that the carrying value exceeds the estimated fair
value of the reporting unit.
Intangible assets with indefinite lives, which primarily consist of trademarks, are not amortized but instead
evaluated for impairment annually or more frequently if events or circumstances indicate that the intangible asset might be
impaired. This analysis is dependent upon a number of uncertain factors described below and is typically performed in
conjunction with the goodwill impairment analysis discussed above and is similar to the analysis performed at acquisition.
The fair value of our trademarks is principally determined by the “relief from royalty” approach that assumes the
trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received
from them. This method includes assumptions regarding revenue growth rates, royalty rates, risk-adjusted discount rates
and future economic and market conditions. If an annual or interim analysis indicates an impairment of an intangible asset
with an indefinite useful life, the amount of the impairment is recognized in our consolidated financial statements based on
the amount that the carrying value exceeds the estimated fair value of the asset for an intangible asset with an indefinite life
or the reporting unit for goodwill.
Indefinite-lived intangible assets and goodwill that have been recently acquired or impaired are typically much
more sensitive to changes in assumptions than other intangible asset and goodwill amounts as those amounts have recently
been recorded at or adjusted to fair value. Consequently, if operating results, plans for the acquired business and/or
macroeconomic conditions change after an acquisition, it could result in the impairment of the acquired intangible assets or
goodwill. A change in macroeconomic conditions may not only impact the estimated operating cash flows used in our cash
flow models but may also impact other assumptions used in our analysis, including but not limited to, the risk-adjusted
market-based cost of capital and/or discount rates. Additionally, we are required to ensure that assumptions used to
determine fair value in our analyses are consistent with the assumptions a hypothetical market participant would use.
Therefore, the cost of capital discount rates used in our analyses may increase or decrease based on market conditions and
trends regardless of whether our actual cost of capital changed.
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The use of different assumptions could result in the determination of a different fair value and a different
impairment charge or charges in different periods. For further discussion of the methods used and factors considered in our
estimates as part of the impairment testing for goodwill and intangible assets with indefinite lives see “Note 1—Business
and Summary of Significant Accounting Policies.” See “Note 5—Intangible Assets and Goodwill Intangible Assets and
Goodwill” for discussion of the impairment charges recognized in Fiscal 2023. The indefinite-lived trademarks and
goodwill associated with Johnny Was that were impaired and adjusted to fair value during Fiscal 2023 have the least excess
of fair value over book value as of February 3, 2024, since they are the most recently acquired and impaired. Thus, if the
Johnny Was business does not achieve the anticipated growth and operating income in future years or if interest rates or tax
rates increase, additional impairments of the Johnny Was intangible assets could be necessary in the future. No impairment
charges related to intangible assets or goodwill were recognized in Fiscal 2022 and Fiscal 2021.
Intangible assets with finite lives primarily consist of customer relationships, certain trademarks and reacquired
rights. These assets are amortized over their estimated useful lives and reviewed for impairment periodically if events or
changes in circumstances indicate that the carrying amount may not be recoverable. If the assets are determined to not be
recoverable on an undiscounted cash flow basis and the expected future discounted cash flows of the asset group are less
than the carrying amount, an asset group is impaired and a loss is recorded for the amount by which the carrying value of
the asset group exceeds its fair value.
Other Fair Value Measurements
For many assets and liabilities, the determination of fair value may not require the use of many assumptions or
other estimates. However, in some cases the assumptions or inputs associated with the determination of fair value may
require the use of many assumptions which may be internally derived or otherwise unobservable. These assumptions may
include the planned use of the assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors.
We use certain market-based and internally derived information and make assumptions about the information in
(1) determining the fair values of assets and liabilities acquired as part of a business combination, (2) adjusting recognized
assets and liabilities to fair value and (3) assessing recognized assets for impairment, including intangible assets, goodwill
and other non-current assets.
From time to time, we may recognize asset impairment or other charges related to certain lease assets, property
and equipment or other amounts associated with us exiting direct to consumer locations, office space or otherwise. In these
cases, we must determine the impairment charge related to the asset group if the assets are determined to not be recoverable
on an undiscounted cash flow basis and the expected future discounted cash flows of the asset group are less than the
carrying amount. While estimated cash outflows can be determined, in certain cases, if there is an underlying lease, the
timing and amount of estimated cash inflows for any sublease rental income and other costs are often uncertain,
particularly if there is not a sub-lease agreement in place. Also, we could subsequently negotiate a lease termination
agreement that would differ from the estimated amount. Thus, our estimate of an impairment charge related to an asset
group could change significantly as we obtain better information in future periods.
Income Taxes
Income taxes included in our consolidated financial statements are determined using the asset and liability
method, in which income taxes are recognized based on amounts of income tax payable or refundable in the current year as
well as the impact of any items that are recognized in different periods for consolidated financial statement reporting
purposes and tax return reporting purposes. Significant judgment is required in determining our income tax provision as
there are many transactions and calculations where the ultimate tax outcome is uncertain and tax laws and regulations are
often complex and subject to interpretation and judgment. These uncertainties relate to the recognition or changes to the
realizability of deferred tax assets, loss carry-forwards, valuation allowances, uncertain tax positions and other matters. Our
assessment of these income tax matters requires our consideration of taxable income and other items for historical periods,
projected future taxable income, projected future reversals of existing timing differences, tax planning strategies and other
information.
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The use of different assumptions related to the income tax matters above, as well as a shift in earnings among
jurisdictions, changes in tax laws, enacted rates or interpretations, court case decisions, statute of limitation expirations or
audit settlements, each could have a significant impact on our income tax rate.
We are subject to income taxes in the U.S. and certain other foreign jurisdictions and are periodically under audit
by tax authorities. The final determination of tax audits could be materially different from historical outcomes and may
adversely impact our tax expense and cash flows. An increase in our consolidated income tax expense rate from 19.0% to
20.0% during Fiscal 2023 would have reduced net earnings by $1 million. See Note 11 of our consolidated financial
statements included in this report for further discussion of income taxes.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 of our consolidated financial statements included in this report for a discussion of recent
accounting pronouncements issued by the FASB that we have not yet adopted that may have a material effect on our
financial position, results of operations or cash flows in the future.
SEASONALITY
Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by
distribution channel, may vary significantly depending on the time of year. For information regarding the impact of
seasonality on our business operations, see Part I, Item 1, Business, included in this report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of business from changes in interest rates, commodity prices
and foreign currency exchange rates. In recent years, we have not used financial instruments to mitigate our exposure to
these risks, and we do not use financial instruments for trading or other speculative purposes. However, we could use
financial instruments to mitigate our exposure to these risks in the future.
Interest Rate Risk
We are exposed to market risk from changes in interest rates on our U.S. Revolving Credit Agreement when we
have any borrowings outstanding, which could impact our financial condition and results of operations in future periods.
Our U.S. Revolving Credit Agreement accrues interest based on variable interest rates while providing the necessary
borrowing flexibility we require due to the seasonality of our business and our need to fund certain product purchases with
trade letters of credit. Additionally, for the amounts of unused credit under the U.S. Revolving Credit Agreement we pay
unused line fees, which are based on a specified percentage of the unused line amounts.
As of February 3, 2024, we had $29 million of borrowings outstanding under our U.S. Revolving Credit
Agreement, after borrowing amounts to fund the Johnny Was acquisition in Fiscal 2022. We do not consider that amount to
necessarily be indicative of the average borrowings outstanding expected for Fiscal 2024 due to our expectation that we
will reduce debt levels during Fiscal 2024, particularly in the first quarter. Our expected cash flows from operations is
expected to be sufficient to fund our planned capital expenditures and dividends as well as allow for the repayment of a
portion of our outstanding debt in Fiscal 2024. As of February 3, 2024, the weighted average interest rate on our
borrowings was 7%, which includes borrowings pursuant to arrangements based on the Term Secured Overnight Financing
Rate or the lender’s prime rate plus an applicable margin. Using the $29 million of variable-rate debt outstanding as of
February 3, 2024 as an example, a 100 basis point increase in interest rates would increase interest expense by less than $1
million.
Foreign Currency Risk
We have exposure to foreign currency exchange rate changes including the impact of the re-measurement of
transaction amounts into the respective functional currency and the translation of our foreign subsidiary financial
statements into U.S. dollars. Also, although we purchase substantially all of our product purchases pursuant to a U.S. dollar
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denominated arrangement, future product costs could increase as a result of fluctuations in the exchange rate between the
U.S. dollar and the local currencies of our suppliers.
With 97% of our consolidated net sales in the United States, we do not anticipate that the impact of foreign
currency changes on our foreign operations would have a material impact on our consolidated net sales, operating income
or net earnings in the near term. Our foreign currency exchange rate risk is discussed in Foreign Currency in Note 1 of our
consolidated financial statements included in this report.
Commodity and Inflation Risk
We are affected by inflation and changing prices through the purchase of full-package finished goods from
suppliers, who manufacture products consisting of various raw material components, including fabrics made of cotton, silk,
linen, polyester, cellulosic fibers, leather and other natural and man-made fibers, or blends of two or more of these
materials. Inflation/deflation risks are managed by each operating group, when possible, through negotiating product prices
in advance, selective price increases and cost containment initiatives. We have not historically entered into significant long-
term sales or purchase contracts or engaged in hedging activities with respect to our commodity risks.
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Item 8. Financial Statements and Supplementary Data
OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
($ in thousands, except par amounts)
February 3,
2024
January 28,
2023
ASSETS
Current Assets
Cash and cash equivalents
Receivables, net
Inventories, net
Income tax receivable
Prepaid expenses and other current assets
Total Current Assets
Property and equipment, net
Intangible assets, net
Goodwill
Operating lease assets
Other assets, net
Deferred income taxes
Total Assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable
Accrued compensation
Current portion of operating lease liabilities
Accrued expenses and other liabilities
Total Current Liabilities
Long-term debt
Non-current portion of operating lease liabilities
Other non-current liabilities
Deferred income taxes
Shareholders’ Equity
Common stock, $1.00 par value per share
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
See accompanying notes.
69
$
$
7,604
63,362
159,565
19,549
43,035
293,115
195,137
262,101
27,190
263,934
32,188
24,179
$ 1,097,844
$
$
8,826
43,986
220,138
19,440
38,073
330,463
177,584
283,845
120,498
240,690
32,209
3,376
$ 1,188,665
$
$
$
$
85,545
23,660
64,576
66,863
240,644
29,304
243,703
23,279
—
94,611
35,022
73,865
66,141
269,639
119,011
220,709
20,055
2,981
15,629
178,567
369,453
(2,735)
$
560,914
$ 1,097,844
15,774
172,175
370,145
(1,824)
$
556,270
$ 1,188,665
Table of Contents
OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
($ and shares in thousands, except per share amounts)
Net sales
Cost of goods sold
Gross profit
SG&A
Impairment of goodwill, intangible assets and equity method investments
Royalties and other operating income
Operating income
Interest expense, net
Earnings before income taxes
Income tax expense
Net earnings
$
Fiscal
2023
$ 1,571,475
575,890
995,585
820,705
113,611
19,713
80,982
6,036
74,946
14,243
60,703
$
$
$
$
Fiscal
2022
$ 1,411,528
522,673
888,855
692,004
—
21,923
218,774
3,049
215,725
49,990
165,735
$
$
$
$
Fiscal
2021
$ 1,142,079
435,861
706,218
573,636
—
32,921
165,503
944
164,559
33,238
131,321
$
$
$
Net earnings per share:
Basic
Diluted
Weighted average shares outstanding:
Basic
Diluted
Dividends declared per share
$
$
$
3.89
3.82
15,590
15,906
2.60
$
$
$
10.42
10.19
15,902
16,259
2.20
$
$
$
7.90
7.78
16,631
16,869
1.63
See accompanying notes.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)
Net earnings
Other comprehensive income (loss), net of taxes:
Net foreign currency translation adjustment
Comprehensive income
Fiscal
2023
60,703
Fiscal
2022
$ 165,735
Fiscal
2021
$ 131,321
(911)
59,792
1,648
$ 167,383
192
$ 131,513
$
$
See accompanying notes.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ in thousands)
Common
Stock
$ 16,889
Additional
Paid-In
Capital
$ 156,508
Retained
Earnings
$ 235,995
— 131,321
Accumulated
Other
Comprehensive
(Loss) Income
$
January 30, 2021
Net earnings and other comprehensive income
Shares issued under equity plans
Compensation expense for equity awards
Repurchase of shares
Cash dividends declared and paid
—
41
—
(125)
—
January 29, 2022
$ 16,805
$ 163,156
Net earnings and other comprehensive income (loss)
Shares issued under equity plans
Compensation expense for equity awards
Repurchase of shares
Cash dividends declared and paid
—
26
—
(1,057)
—
January 28, 2023
$ 15,774
$ 172,175
Net earnings and other comprehensive income (loss)
Shares issued under equity plans
Compensation expense for equity awards
Repurchase of shares
Cash dividends declared and paid
—
144
—
(289)
—
February 3, 2024
$ 15,629
$ 178,567
See accompanying notes.
72
1,411
8,186
(2,949)
1,573
10,577
(3,131)
1,767
14,473
(9,848)
—
—
—
—
—
—
$
$
$
—
(8,268)
(27,873)
$ 331,175
— 165,735
(90,651)
(36,114)
$ 370,145
60,703
—
—
—
(19,856)
(41,539)
$ 369,453
Total
192
—
—
—
—
(3,664) $ 405,728
131,513
1,452
8,186
(11,342)
(27,873)
(3,472) $ 507,664
167,383
1,648
1,599
10,577
(94,839)
(36,114)
(1,824) $ 556,270
59,792
1,911
14,473
(29,993)
(41,539)
(2,735) $ 560,914
—
—
—
—
—
—
—
—
(911)
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
Cash Flows From Operating Activities:
Net earnings
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation
Amortization of intangible assets
Impairment of goodwill, intangible assets and equity method investments
Impairment of property and equipment
Equity compensation expense
Gain on sale of investment in unconsolidated entity
Gain on sale of property and equipment
Amortization and write-off of deferred financing costs
Change in fair value of contingent consideration
Deferred income taxes
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net
Inventories, net
Income tax receivable
Prepaid expenses and other current assets
Current liabilities
Other non-current assets, net
Other non-current liabilities
Cash provided by operating activities
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired
Purchases of property and equipment
Purchases of short-term investments
Proceeds from short-term investments
Proceeds from the sale of property, plant and equipment
Other investing activities
Cash used in investing activities
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements
Proceeds from revolving credit arrangements
Deferred financing costs paid
Repurchase of common stock
Proceeds from issuance of common stock
Repurchase of equity awards for employee tax withholding liabilities
Cash dividends paid
Other financing activities
Cash used in financing activities
Net change in cash and cash equivalents
Effect of foreign currency translation on cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of period
See accompanying notes.
73
Fiscal
2023
Fiscal
2022
Fiscal
2021
$
60,703
$ 165,735
$ 131,321
49,323
14,743
113,611
584
14,473
—
(1,756)
569
—
(23,890)
41,503
6,102
—
1,430
10,577
—
(600)
344
—
(1,867)
39,062
880
—
1,656
8,186
(11,586)
(2,669)
344
1,188
4,054
(14,994)
62,507
(109)
(4,931)
(28,069)
(25,220)
26,740
$ 244,284
(1,966)
(78,966)
288
(12,793)
8,635
14,233
(27,045)
$ 125,610
(15)
5,378
(1,753)
(889)
27,585
37,534
(42,270)
$ 198,006
(11,975)
(74,098)
—
—
2,125
(33)
—
(31,894)
(165,000)
—
14,586
736
$ (83,981) $ (151,747) $ (181,572)
(263,648)
(46,668)
(70,000)
234,852
—
(6,283)
(477,350)
387,643
(1,661)
(20,045)
1,911
(9,941)
(41,729)
(145,894)
264,905
—
(91,674)
1,599
(3,166)
(35,287)
(2,010)
—
—
—
(8,359)
1,452
(2,983)
(27,536)
(749)
$ (161,172) $ (11,527) $ (38,175)
(869) $ (37,664) $ (21,741)
$
1,631
(353)
587
66,013
44,859
8,826
44,859
8,826
7,604
—
$
$
$
Table of Contents
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 3, 2024
Note 1. Business and Summary of Significant Accounting Policies
Description of Business
We are a leading branded apparel company that designs, sources, markets and distributes products bearing the
trademarks of our Tommy Bahama®, Lilly Pulitzer®, Johnny Was®, Southern Tide®, The Beaufort Bonnet Company®,
Duck Head® and Jack Rogers® lifestyle brands. We distribute our products through our direct to consumer channels,
consisting of our brand specific full-price retail stores, e-commerce websites and outlet stores, and our wholesale
distribution channel, which includes sales to various specialty stores, Signature Stores, better department stores, multi-
branded e-commerce websites and other retailers. Additionally, we operate Tommy Bahama food and beverage locations,
including Marlin Bars and full-service restaurants, generally adjacent to a Tommy Bahama full-price retail store.
On September 19, 2022, we acquired the Johnny Was lifestyle apparel brand and its related assets and operations,
which is discussed in further detail in Note 4. Also, in Fiscal 2021, we exited our Lanier Apparel business, as discussed in
Note 12. Additionally, refer to Note 2 for certain financial information about the Johnny Was and Lanier Apparel operating
groups.
Recent Macroeconomic Conditions
The COVID-19 pandemic had a significant effect on overall economic conditions and our operations in recent
years and accelerated or exacerbated many of the challenges in the industry. Exceptionally strong consumer demand, along
with the strength of our brands, resulted in record earnings for us during both Fiscal 2021 and Fiscal 2022. The strong
earnings in recent periods are despite certain challenges in the retail apparel market, including labor shortages, supply
chain disruptions and product and operating cost increases in Fiscal 2021 and Fiscal 2022. We, as well as others in our
industry, have increased prices to attempt to offset inflationary pressures.
Further, negative economic conditions often have a longer and more severe impact on the apparel industry than on
other industries due, in part, to apparel purchases often being more of a discretionary purchase. The current
macroenvironment, with heightened concerns about inflation, a global economic recession, geopolitical issues, the stability
of the U.S. banking system, the availability and cost of credit and elevated interest rates for prolonged periods, is creating a
complex and challenging retail environment, which impacted our businesses during Fiscal 2023 and continues to affect our
operations. As a result of the macroeconomic environment, we saw reduced conversion rates in our direct to consumer
operations and a year-over-year decline in net earnings and operating income. There remains significant uncertainty in the
macroeconomic environment, and the impact of these and other factors could have a major effect on our businesses.
Fiscal Year
We operate and report on a 52/53-week fiscal year. Our fiscal year ends on the Saturday closest to January 31 and
is designated by the calendar year in which the fiscal year commences. As used in our consolidated financial statements,
the terms Fiscal 2021, Fiscal 2022, Fiscal 2023 and Fiscal 2024 reflect the 52 weeks ended January 29, 2022; 52 weeks
ended January 28, 2023; 53 weeks ended February 3, 2024; and 52 weeks ending February 1, 2025, respectively.
Principles of Consolidation
Our consolidated financial statements include the accounts of Oxford Industries, Inc. and any other entities in
which we have a controlling financial interest, including our wholly-owned domestic and foreign subsidiaries, or variable
interest entities for which we are the primary beneficiary, if any. Generally, we consolidate businesses in which we have a
controlling financial interest which may be evidenced through ownership of a majority voting interest or other rights which
might indicate that we are the primary beneficiary of the entity. The primary beneficiary has both the power to direct the
activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb
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losses or the right to receive benefits from the entity that could potentially be significant to the entity. All significant
intercompany accounts and transactions are eliminated in consolidation.
Business Combinations
From time-to-time, we make strategic acquisitions that may have a material effect on our consolidated results of
operations and financial position. The measurement principle for the assets acquired and the liabilities assumed in a
business combination is at estimated fair value as of the acquisition date, with certain exceptions.
At acquisition, we use estimates that can be complex and require significant judgments to record the fair value of
purchased intangible assets, which primarily consist of trademarks, as well as customer relationships and reacquired rights.
The fair values and useful lives of these intangible assets are estimated based on our assessment as well as independent
third party appraisals in some cases. The cost of each acquired business is allocated to the individual tangible and
intangible assets acquired and liabilities assumed or incurred as a result of an acquisition based on their estimated fair
values pursuant to the acquisition method of accounting. Additionally, at acquisition we must determine whether the
intangible asset has an indefinite or finite life and account for it accordingly.
Goodwill is recognized as the amount by which the cost to acquire a business exceeds the fair value of identified
tangible and intangible assets acquired, net of assumed liabilities. Thus, the amount of goodwill recognized in connection
with a business combination depends on the fair values assigned to the individual assets acquired and liabilities assumed in
a business combination. Goodwill is allocated to the respective reporting unit at the time of acquisition. As of February 3,
2024, substantially all goodwill included in our consolidated balance sheet is deductible for income tax purposes.
At acquisition, as well as any subsequent impairment tests, assumptions and estimates about various items with
significant uncertainty are required to determine the fair value of intangible assets and goodwill. When determining the fair
value of intangible assets, including trademarks, customer relationships and other items, significant assumptions may
include our planned use of the asset as well as estimates of net sales, royalty income, operating income, growth rates,
royalty rates for the trademarks, a risk-adjusted, market-based cost of capital for the discount rates, income tax rates,
anticipated cash flows and probabilities of cash flows, among other factors. Our fair value assessment may also consider
any comparable market transactions. The use of different assumptions related to these uncertain factors at acquisition could
result in a material change to the amounts of intangible assets and goodwill initially recorded at acquisition, which could
result in a material impact on our consolidated financial statements. Additionally, the definition of fair value of inventories
acquired as part of a business combination generally will equal the expected sales price less certain costs associated with
selling the inventory, which may exceed the actual cost of the acquired inventories, resulting in an inventory step-up to fair
value at acquisition, which would be recognized in our consolidated statements of operations as the acquired inventory is
sold.
Our estimates of the purchase price allocation of a business combination may be revised during a measurement
period as necessary when, and if, information becomes available to revise the fair values of the assets acquired and the
liabilities assumed. Actual fair values ultimately assigned to the acquired assets and liabilities when final information is
available may materially differ from our preliminary estimates during the measurement period. The allocation period may
not exceed one year from the date of the acquisition. Should information become available after the allocation period
indicating that an adjustment to the purchase price allocation is appropriate, that adjustment will be included in our
consolidated statements of operations. The results of operations of acquired businesses are included in our consolidated
statements of operations from the respective dates of the acquisitions. Transaction costs related to business combinations
are included in SG&A in our consolidated statements of operations as incurred.
Refer to Note 4 for information related to the Fiscal 2022 acquisition of Johnny Was and the Fiscal 2023
acquisitions, including disclosures about the allocation of the preliminary purchase price to the estimated fair values of the
acquired assets and liabilities.
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Revenue Recognition and Receivables
Our revenue consists of direct to consumer sales, including our retail store, e-commerce and food and beverage
operations, and wholesale sales, as well as royalty income, which is included in royalties and other income in our
consolidated statements of operations. Revenue is recognized at an amount that reflects the consideration expected to be
received for those goods and services pursuant to a five-step approach: (1) identify the contracts with the customer;
(2) identify the separate performance obligations in the contracts; (3) determine the transaction price; (4) allocate the
transaction price to separate performance obligations; and (5) recognize revenue when, or as, each performance obligation
is satisfied. The table below quantifies the amount of net sales by distribution channel (in thousands) for each period
presented.
Retail
E-commerce
Food & Beverage
Wholesale
Other
Net sales
$
Fiscal
2023
605,486
538,224
115,766
311,910
89
$ 1,571,475
$
Fiscal
2022
552,696
465,446
109,225
281,938
2,223
$ 1,411,528
$
Fiscal
2021
443,015
369,300
96,244
231,536
1,984
$ 1,142,079
We recognize revenue when performance obligations under the terms of the contracts with our customers are
satisfied, which generally occurs when we deliver our products to our direct to consumer and wholesale customers. Control
of the product is generally transferred upon providing the product to consumers in our bricks and mortar retail stores and
food and beverage locations, upon physical delivery of the products to consumers in our e-commerce operations and upon
shipment from our distribution center to customers in our wholesale operations. Once control is transferred to the customer,
we have completed our performance obligations related to the contract and have an unconditional right to consideration for
the products sold as outlined in the contract. Our receivables resulting from contracts with customers in our direct to
consumer operations are generally collected within a few days, upon settlement of the credit card transaction, while our
receivables resulting from contracts with our customers in our wholesale operations are generally due within one quarter, in
accordance with established credit terms. All of our performance obligations under the terms of our contracts with
customers in our direct to consumer and wholesale operations have an expected original duration of one year or less. We
only recognize revenue to the extent that it is probable that we will not have a significant reversal of revenue in a future
period. Our revenue, including any freight income, is recognized net of applicable taxes in our consolidated statements of
operations.
In our direct to consumer operations, consumers have certain rights to return product within a specified period and
are eligible for certain point of sale discounts; thus retail store, e-commerce and food and beverage revenues are recorded
net of estimated returns and discounts, as applicable. The sales return allowance is based on historical direct to consumer
return rates and current trends and is recognized on a gross basis as a return liability for the amount of sales estimated to be
returned and a return asset for the right to recover the product estimated to be returned by the customer. The value of
inventory associated with a right to recover the goods returned in our direct to consumer operations is included in prepaid
expenses and other current assets in our consolidated balance sheets. The changes in the return liability are recognized in
net sales and the changes in the return asset are recognized in cost of goods sold in our consolidated statements of
operations. An estimated sales return liability of $13 million and $12 million for expected direct to consumer returns is
classified in accrued expenses and other liabilities in our consolidated balance sheet as of February 3, 2024 and January 28,
2023, respectively.
In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising
support to some of our wholesale customers for certain products. Some of these arrangements are written agreements,
while others may be implied by customary practices or expectations in the industry. As certain allowances, other
deductions and returns are not finalized until the end of a season, program or other event which may not have occurred
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yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the
customer that we expect to ultimately receive. Significant considerations in determining our estimates for discounts,
allowances, operational chargebacks and returns for wholesale customers may include historical and current trends,
agreements with customers, projected seasonal or program results, an evaluation of current economic conditions, specific
program or product expectations and retailer performance. We record the discounts, returns, allowances and operational
chargebacks as a reduction to net sales in our consolidated statements of operations and as a reduction to receivables, net in
our consolidated balance sheets, with the estimated value of inventory expected to be returned in prepaid expenses and
other current assets in our consolidated balance sheets. As of February 3, 2024 and January 28, 2023, reserve balances
recorded as a reduction to wholesale receivables related to these items were $3 million and $4 million, respectively.
We extend credit to certain wholesale customers based on an evaluation of the customer’s financial capacity and
condition, usually without requiring collateral. In circumstances where we become aware of a specific wholesale
customer’s inability to meet its financial obligations, a specific provision for credit losses is taken as a reduction to
accounts receivable to reduce the net recognized receivable to the amount reasonably expected to be collected. Such
amounts are ultimately written off at the time that the amounts are not considered collectible. For our wholesale customer
receivable amounts not specifically provided for, we recognize estimated provisions for credit losses, using the current
expected loss model based on our historical collection experience, the financial condition of our customers, an evaluation
of current economic conditions, anticipated trends and the risk characteristics of the receivables. Provisions for credit loss
expense, which is included in SG&A in our consolidated statements of operations, for Fiscal 2023, Fiscal 2022 and Fiscal
2021 were a credit of less than $1 million, a credit of less than $1 million and a credit of $1 million, respectively, while
write-offs of credit losses for Fiscal 2023, Fiscal 2022 and Fiscal 2021 were less than $1 million, less than $1 million and
less than $1 million, respectively. As of both February 3, 2024 and January 28, 2023, receivables, net in our consolidated
balance sheet included a provision for credit losses related to trade receivables of $1 million.
In addition to trade receivables, tenant allowances due from landlord of $6 million and $2 million are included in
receivables, net in our consolidated balance sheet, as of February 3, 2024 and January 28, 2023, respectively. Substantially
all other amounts recognized in receivables, net represent trade receivables related to contracts with customers, including
receivables from wholesale customers, credit card receivables related to our direct to consumer operations, and receivables
from licensing partners. As of both February 3, 2024 and January 28, 2023, prepaid expenses and other current assets
included $4 million representing the estimated value of inventory for expected direct to consumer and wholesale sales
returns in the aggregate. We did not have any significant contract assets related to contracts with customers, other than
trade receivables and the value of inventory associated with expected sales returns, as of February 3, 2024 and January 28,
2023.
In addition to our estimated expected return amounts, contract liabilities related to contracts with our customers
include gift cards and merchandise credits issued by us as well as unredeemed loyalty program award points. Gift cards and
merchandise credits issued by us are redeemable on demand by the holder, do not have an expiration date and do not incur
administrative fees. Historically, substantially all gift cards and merchandise credits are redeemed within one year of
issuance. Gift cards and merchandise credits are recorded as a liability until our performance obligation is satisfied, which
occurs when redeemed by the consumer, at which point revenue is recognized. However, we recognize estimated breakage
income for certain gift cards and merchandise credits using the redemption recognition method, subject to applicable laws
in certain states. Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers
but not yet redeemed, less any breakage income recognized to date, is included in accrued expenses and other liabilities in
our consolidated balance sheets and totaled $20 million and $19 million as of February 3, 2024 and January 28, 2023,
respectively. Gift card breakage income, which is included in net sales in our consolidated statements of operations, was $1
million in each of Fiscal 2023, Fiscal 2022 and Fiscal 2021.
In Fiscal 2021, each of our brands in our Emerging Brands operating group initiated brand specific loyalty award
programs. These programs allow consumers to earn loyalty points associated with the brand. Lilly Pulitzer initiated also
initiated a program in Fiscal 2023. These programs are primarily spend-based loyalty programs, with varying terms and
conditions for each respective brand’s program. The consumer earns points which, depending on the program, allows the
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consumer to (1) achieve a specified status with the brand, which provides the consumer with benefits, such as early access
to events, free shipping or other benefits, for a specified period, and/or (2) earn a monetary reward by accumulating loyalty
points that can be redeemed in association with future purchases from the brand. As loyalty points are earned, we defer
revenue, based on the estimated fair value of the loyalty points, with a corresponding liability in accrued expenses and
other liabilities in our consolidated balance sheets. The loyalty points liability is generally recognized as revenue when the
loyalty points are redeemed or expire. Deferred revenue associated with the loyalty programs totaled $3 million and $1
million as of February 3, 2024 and January 28, 2023, respectively.
Royalties from the license of our owned brands are recognized over the time that licensees are provided access to
utilize our trademarks (i.e. symbolic intellectual property) and benefit from such access through their sales of licensed
products. Payments are generally due quarterly, and depending on time of receipt, may be recorded as a liability until
recognized as revenue. Royalty income is based upon the contractually guaranteed minimum royalty obligations and
adjusted as sales data, or estimates thereof, received from licensees reflects that the related royalties based on a percentage
of the licensee’s sales exceed the contractually determined minimum royalty amount. Royalty income, which is included in
royalties and other operating income in our consolidated statements of operations, were $19 million, $22 million and $18
million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.
Cost of Goods Sold
We include in cost of goods sold (1) the cost paid to the suppliers for the acquired product, (2) sourcing,
procurement and other costs incurred prior to or in association with the receipt of finished goods at our distribution
facilities, and (3) freight from our distribution facilities to our own retail stores, e-commerce consumers and wholesale
customers. The costs prior to receipt at our distribution facilities include inbound freight charges, duties and other import
costs, brokers’ fees, consolidators’ fees, insurance, direct labor, and depreciation expense associated with our sourcing
operations. We generally classify amounts billed to customers for freight in net sales and classify freight costs for
shipments to customers in cost of goods sold in our consolidated statements of operations.
Our gross profit and gross margin may not be directly comparable to those of our competitors, as statement of
operations classifications of certain expenses may vary by company.
SG&A
We include in SG&A costs incurred subsequent to the receipt of finished goods at our distribution facilities, such
as the cost of inspection, stocking, warehousing, picking and packing, and costs associated with the operations of our e-
commerce sites, retail stores, food and beverage locations and concessions, such as labor, lease commitments and other
occupancy costs, direct to consumer location pre-opening costs (including rent, marketing, store set-up costs and training
expenses), depreciation and other amounts. SG&A also includes product design costs, selling costs, royalty expense,
provision for credit losses, advertising, promotion and marketing expenses, professional fees, supplies, travel, other general
and administrative expenses, our corporate overhead costs and amortization of intangible assets.
Distribution network costs, including costs associated with preparing goods to ship to customers and our costs to
operate our distribution facilities, are included as a component of SG&A. We consider distribution network costs to be the
costs associated with operating our distribution centers, as well as the costs paid to third parties who perform those services
for us. In Fiscal 2023, Fiscal 2022 and Fiscal 2021, distribution network costs included in SG&A totaled $40 million, $36
million and $28 million, respectively.
All costs associated with advertising, promotion and marketing of our products are expensed in SG&A during the
period when the advertisement is first shown. Costs associated with cooperative advertising programs under which we
agree to make general contributions to our wholesale customers’ advertising and promotional funds are generally recorded
as a reduction to net sales. Advertising, promotion and marketing expenses, excluding employment costs for our
advertising and marketing employees, for Fiscal 2023, Fiscal 2022 and Fiscal 2021 were $105 million, $82 million and
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$60 million, respectively. Prepaid advertising, promotion and marketing expenses included in prepaid expenses and other
current assets in our consolidated balance sheets as of February 3, 2024 and January 28, 2023 were $5 million and $6
million, respectively.
Royalty expense related to our license of third party brands, which are generally based on the greater of
a percentage of our actual net sales for the licensed product or a contractually determined minimum royalty amount, are
recorded based upon any guaranteed minimum levels and adjusted based on our net sales of the licensed products, as
appropriate. Royalty expenses recognized as SG&A in Fiscal 2023, Fiscal 2022 and Fiscal 2021 were $6 million, $4
million and $6 million, respectively. As of February 3, 2024, we do not have any royalty agreements with material
guaranteed minimum royalty amounts for future periods as future royalty amounts are generally dependent on our future
sales of the specified licensed products.
Cash and Cash Equivalents
We consider cash equivalents to be investments with original maturities of three months or less for purposes of
our consolidated statements of cash flows. As of February 3, 2024 and January 28, 2023, we did not have any cash and
cash equivalents in money market fund investments.
Supplemental Cash Flow Information
During Fiscal 2023, Fiscal 2022 and Fiscal 2021, cash paid for income taxes was $39 million, $56 million and $34
million, respectively. During Fiscal 2023, Fiscal 2022 and Fiscal 2021, cash paid for interest, net of interest income was $6
million, $3 million and $1 million, respectively. Non-cash investing activities included capital expenditures incurred but
not yet paid at period end, which were included in accounts payable in our consolidated balances sheets, of $2 million, $3
million and $3 million as of Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively. Additionally, during Fiscal 2023, Fiscal
2022 and Fiscal 2021, we recorded a non-cash net increase in operating lease assets and corresponding operating lease
liability amounts of $83 million, $47 million and $18 million, respectively, related to the net impact of new, modified and
terminated operating lease amounts, excluding any operating lease amounts recognized in the opening balance sheet of an
acquired business.
Inventories, net
Substantially all of our inventories are finished goods inventories of apparel, accessories and other related
products. Inventories are valued at the lower of cost or market.
For operating group reporting, inventory is carried at the lower of FIFO cost or market. We evaluate the
composition of our inventories for identification of distressed inventory at least quarterly. In performing this evaluation,
we consider slow-turning products, an indication of lack of consumer acceptance of particular products, prior-seasons’
fashion products, broken assortments, discontinued products and current levels of replenishment program products as
compared to expected sales. We estimate the amount of goods that we will not be able to sell in the normal course of
business and write down the value of these goods as necessary based on various assumptions about the amounts we
ultimately expect to realize for the inventories. Also, we provide an allowance for shrinkage, as appropriate, for the period
between the last physical inventory count and each balance sheet date.
For consolidated financial reporting, as of February 3, 2024 and January 28, 2023, $146 million, or 92%, and
$204 million, or 93%, respectively, of our inventories were valued at the lower of LIFO cost or market after deducting our
LIFO accounting reserve. The remaining $13 million and $16 million of our inventories were valued at the lower of FIFO
cost or market as of February 3, 2024 and January 28, 2023, respectively. Generally, for consolidated financial reporting,
inventories of our domestic operations are valued at the lower of LIFO cost or market, and our inventories of our
international operations are valued at the lower of FIFO cost or market. Our LIFO reserves are based on the estimated
Producer Price Index as published by the United States Department of Labor. We write down inventories valued at the
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lower of LIFO cost or market when LIFO cost exceeds market value. We deem LIFO accounting adjustments to not only
include changes in the LIFO reserve, but also includes changes in markdown reserves. As our LIFO inventory pool does
not correspond to our operating group definitions, LIFO inventory accounting adjustments are not allocated to our
operating groups. Thus, the impact of accounting for inventories on the LIFO method is reflected in Corporate and Other
for operating group reporting purposes included in Note 2.
There was a $2 million LIFO inventory layer liquidation in Fiscal 2023. There were no material LIFO inventory
layer liquidations in Fiscal 2022 or Fiscal 2021. As of February 3, 2024 and January 28, 2023, the LIFO reserve included
in our consolidated balance sheet was $83 million and $76 million, respectively.
Property and Equipment, net
Property and equipment, including leasehold improvements that are reimbursed by landlords as a tenant
improvement allowance and assets under capital leases, if any, is carried at cost less accumulated depreciation. Additions
are capitalized while repair and maintenance costs are charged to our consolidated statements of operations as incurred.
Depreciation is calculated using both straight-line and accelerated methods generally over the estimated useful lives of the
assets as follows:
Leasehold improvements
Furniture, fixtures, equipment and technology
Buildings and improvements
Lesser of remaining life of the asset or lease term
2 – 15 years
7 – 40 years
Property and equipment is reviewed periodically for impairment if events or changes in circumstances indicate
that the carrying amount of the asset group may not be recoverable, as discussed in Impairment of Long-Lived Assets,
other than Goodwill and Intangible Assets with Indefinite Lives below.
Substantially all of our depreciation expense is included in SG&A in our consolidated statements of operations.
Cost of goods sold includes the depreciation associated with our sourcing operations.
Goodwill and Intangible Assets
We test goodwill for impairment at the reporting unit level annually on the first day of the fourth quarter and more
often if an event occurs or circumstances change that indicate the fair value of a reporting unit is below its carrying
amount. We have the option to first assess qualitative factors to determine whether it is more likely than not that goodwill
is impaired to determine whether it is necessary to perform the quantitative impairment test. We also have the option to
bypass the qualitative assessment entirely for any reporting unit in any period and proceed directly to performing the
quantitative impairment test. For each impairment test of goodwill in Fiscal 2023, Fiscal 2022 and Fiscal 2021, we
bypassed the qualitative test option and instead performed a quantitative test.
When applying the quantitative assessment, we determine the fair value of our reporting units based on an income
approach, or in some cases a combination of an income approach and market approach. The income approach calculates a
value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of
similarly situated guideline public companies. Determining the fair value of a reporting unit involves judgment and the use
of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating
margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market
conditions. If an annual or interim analysis indicates an impairment of goodwill, the amount of the impairment is
recognized in our consolidated financial statements based on the amount that the carrying value exceeds the estimated fair
value of the reporting unit.
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As of October 29, 2023, our reporting units consisted of the following: Tommy Bahama; Lilly Pulitzer; Johnny
Was; Southern Tide; TBBC; Duck Head; and Oxford of Lyons. As of October 29, 2023, we performed a quantitative
assessment of impairment for the Lilly Pulitzer, Johnny Was, Southern Tide and TBBC reporting units. Our other reporting
units do not have goodwill. We determined on the basis of the quantitative assessments of our Lilly Pulitzer, Southern Tide
and TBBC reporting units that the fair value of each reporting unit was greater than its respective carrying amount,
indicating no impairment. Based on the quantitative assessment of our Johnny Was reporting unit, we recognized an
impairment charge of $99 million in the Fourth Quarter of Fiscal 2023 which was recorded within impairment of goodwill,
intangible assets and equity method investments in our Consolidated Statements of Operations. See “Note 5—Intangible
Assets and Goodwill” for further discussion.
Intangible assets with indefinite lives, which primarily consist of trademarks, are not amortized but instead
evaluated for impairment annually or more frequently if events or circumstances indicate that the intangible asset might be
impaired. This analysis is dependent upon a number of uncertain factors described below and is typically performed in
conjunction with the goodwill impairment analysis discussed above and is similar to the analysis performed at acquisition.
The fair value of our trademarks is principally determined by the “relief from royalty” approach that assumes the
trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received
from them. This method includes assumptions regarding revenue growth rates, royalty rates, risk-adjusted discount rates
and future economic and market conditions. If an annual or interim analysis indicates an impairment of an intangible asset
with an indefinite useful life, the amount of the impairment is recognized in our consolidated financial statements based on
the amount that the carrying value exceeds the estimated fair value of the asset for an intangible asset with an indefinite life
or the reporting unit for goodwill.
Based on the quantitative assessment of our Johnny Was related intangible assets with an indefinite life, we
recognized noncash impairment charges of $12 million in the Fourth Quarter of Fiscal 2023 which was recorded within
impairment of goodwill, intangible assets and equity method investments in our Consolidated Statements of Operations.
See “Note 5—Intangible Assets and Goodwill” for further discussion. For all other intangible assets with an indefinite life,
we determined on the basis of the quantitative assessments that the fair value of each intangible asset with an indefinite life
was greater than its respective carrying amount, indicating no impairment.
The estimated fair values used in the impairment assessments of goodwill and intangible assets with an indefinite
life were considered nonrecurring Level 3 measurements of the valuation hierarchy.
Intangible assets with finite lives primarily consist of customer relationships, certain trademarks and reacquired
rights. These assets are amortized over the estimated useful life of the asset using a method of amortization that reflects the
pattern in which the economic benefits of the intangible asset are consumed or otherwise realized or the straight line
method. Certain of our intangible assets with finite lives may be amortized over periods of up to 20 years. The
determination of an appropriate useful life for amortization considers our plans for the intangible assets, the remaining
contractual period of the reacquired right, and factors that may be outside of our control, including expected customer
attrition. Amortization of intangible assets is included in SG&A in our consolidated statements of operations. Intangible
assets with finite lives are reviewed periodically for impairment if events or changes in circumstances indicate that the
carrying amount of the asset group may not be recoverable, as discussed below under Impairment of Long-Lived Assets,
other than Goodwill and Intangible Assets with Indefinite Lives. Any costs associated with extending or renewing
recognized intangible assets are generally expensed as incurred.
Prepaid Expenses and Other Non-Current Assets, net
Amounts included in prepaid expenses and other current assets primarily consist of prepaid operating expenses,
including subscriptions, maintenance and other services contracts, advertising, insurance, samples and direct to consumer
supplies as well as the estimated value of inventory for anticipated direct to consumer and wholesale sales returns. Other
non-current assets primarily consist of assets set aside for potential liabilities related to our deferred compensation plan,
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equity investments in unconsolidated entities, assets related to certain investments in officers’ life insurance policies,
deposits and amounts placed into escrow accounts, deferred financing costs and non-current deferred tax assets.
Officers’ life insurance policies that are owned by us, which are included in other non-current assets, net, are
recorded at their cash surrender value, less any outstanding loans associated with the life insurance policies that are payable
to the life insurance company with which the policy is outstanding. As of both February 3, 2024 and January 28, 2023,
officers’ life insurance policies, net, recorded in our consolidated balance sheets totaled $4 million.
Deferred financing costs for our revolving credit agreement are included in other non-current assets, net in our
consolidated financial statements. Deferred financing costs are amortized on a straight-line basis, which approximates the
effective interest method over the term of the related debt. Amortization of deferred financing costs is included in interest
expense in our consolidated statements of operations. In March of 2023, we capitalized debt issuance costs of $2 million in
connection with commitments upon entering into the U.S. Revolving Credit Agreement. Unamortized deferred financing
costs included in other non-current assets, net totaled $2 million as of February 3, 2024 and $1 million as of January 28,
2023.
Deferred Compensation
We have a non-qualified deferred compensation plan offered to a select group of highly compensated employees
and our non-employee directors. The plan provides participants with the opportunity to defer a portion of their cash
compensation in a given plan year, of which a percentage may be matched by us in accordance with the terms of the plan.
We make contributions to rabbi trusts or other investments to provide a source of funds for satisfying these deferred
compensation liabilities. Investments held for our deferred compensation plan consist of insurance contracts and are
recorded based on valuations which generally incorporate unobservable factors. Realized and unrealized gains and losses
on the deferred compensation plan investments are recorded in SG&A in our consolidated statements of operations and
substantially offset the changes in deferred compensation liabilities to participants resulting from changes in market values.
These securities approximate the participant-directed investment selections underlying the deferred compensation
liabilities.
The total value of the assets set aside for potential deferred compensation liabilities as of February 3, 2024 and
January 28, 2023 was $17 million and $16 million, respectively. Substantially all of these amounts are held in a rabbi trust
and included in other non-current assets, net in our consolidated balance sheet. Substantially all the assets set aside for
potential deferred compensation liabilities are life insurance policies recorded at their cash surrender value, less any
outstanding loans associated with the life insurance policies that are payable to the life insurance company with which the
policy is outstanding. The liabilities associated with the non-qualified deferred compensation plan are included in other
non-current liabilities in our consolidated balance sheets and totaled $18 million and $15 million at February 3, 2024 and
January 28, 2023, respectively.
Equity Investments in Unconsolidated Entities
We account for equity investments in which we do not directly or indirectly hold a controlling interest using the
equity method of accounting. Generally, we determine that we exercise significant influence over a corporation or a limited
liability company when we own 20% or more or 3% or more, respectively, of the voting interests, unless the facts and
circumstances of that investment indicate that we do not have the ability to exhibit significant influence. Under the equity
method of accounting, original investments are recorded at cost, and are subsequently adjusted for our contributions to,
distributions from and share of income or losses of the entity. We account for equity investments in which we do not
control or exercise significant influence using the fair value method of accounting unless there is not a readily determinable
fair value for the equity investment. If there is no readily determinable fair value for such equity investment, we account
for the equity investment using the alternative measurement method of cost adjusted for impairment and any identified
observable price changes of the investment.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Equity investments accounted for using the equity method of accounting, fair value method of accounting, or
alternative measurement method are included in other non-current assets in our consolidated balance sheets, while the
income or loss related to such investments is included in royalties and other operating income in our consolidated
statements of operations. Income or loss related to investments in smaller lifestyle brands are included within Emerging
Brands, while income or loss related to investments in entities that are not lifestyle brands are included within Corporate
and Other, including the income or loss from the Tommy Bahama Miramonte Resort & Spa. We made no equity
investments during Fiscal 2023. During Fiscal 2022, we paid $8 million for an investment in the Tommy Bahama
Miramonte Resort & Spa accounted for using the equity method of accounting. The investment made in Fiscal 2022 is
included in other investing activities in our consolidated statements of cash flows.
As of February 3, 2024 and January 28, 2023, our consolidated balance sheet included equity investments
accounted for using the equity method of accounting, fair value and alternative measurement method totaling, in the
aggregate, $7 million and $11 million, respectively. The primary drivers of the decrease were (1) a $2 million noncash
impairment of an equity method investment in a smaller lifestyle apparel brand in Fiscal 2023 and (2) a $2 million loss
recognized related to the Tommy Bahama Miramonte Resort & Spa. The impairment in the equity method investment
resulted from the investee’s forecast of future losses and was recorded within impairment of goodwill, intangible assets and
equity method investments in our Consolidated Statements of Operations. The equity investments in unconsolidated
entities included in our consolidated balance sheet represents substantially all our exposure or loss related to these
investments, as there are no meaningful obligations to fund additional amounts or losses related to these investments. Our
primary equity method investment is our minority ownership interest in a property in Indian Wells, California that operates
as the Tommy Bahama Miramonte Resort & Spa that opened during Fiscal 2023. During Fiscal 2023, Fiscal 2022 and
Fiscal 2021 we recognized amounts related to equity method investments in royalties and other income of a loss of $2
million, loss of $1 million and income of $12 million, respectively. The income in Fiscal 2021 was related to our minority
ownership interests in an unconsolidated entity that was redeemed upon that entity consummating a change in control
transaction, resulting in proceeds to us of $15 million and a gain on sale of $12 million.
Impairment of Long-Lived Assets, other than Goodwill and Intangible Assets with Indefinite Lives
We assess our long-lived assets other than goodwill and intangible assets with indefinite lives for impairment
whenever events indicate that the carrying amount of the asset or asset group may not be fully recoverable. This
recoverability and impairment assessment is performed for a specific asset or asset group and includes any property and
equipment, operating lease assets, intangible assets with finite lives and other non-current assets included in the asset
group. Events that would typically result in such an assessment would include a change in the estimated useful life of the
assets, including a change in our plans of the anticipated period of operating a leased direct to consumer location, the
decision to vacate a leased space before lease expiration, the abandonment of an asset or other factors. These events may
also result in a change in the determination of the assets included in an asset group for impairment testing. To analyze
recoverability, we consider undiscounted net future cash flows over the remaining life of the asset or asset group. If the
amounts are determined to not be recoverable an impairment is recognized resulting in the write-down of the asset or asset
group and a corresponding charge to our consolidated statements of operations. Impairment losses are measured based on
the difference between the carrying amount and the estimated fair value of the assets. For any assets impaired during Fiscal
2023, Fiscal 2022 and Fiscal 2021, there was no significant fair value at the date of impairment testing.
During Fiscal 2023, Fiscal 2022 and Fiscal 2021, we recognized $1 million, $1 million and $2 million,
respectively, of property and equipment impairment charges, which were primarily included in SG&A.
During Fiscal 2023 and Fiscal 2022, we did not recognize any operating lease asset impairment charges. During
Fiscal 2021, we recognized $5 million of operating lease asset impairment charges, which were primarily included in
SG&A. During Fiscal 2021, these charges primarily related to our Tommy Bahama New York office and showroom lease,
which was vacated in Fiscal 2021 and provides the landlord the ongoing right to terminate the lease.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
No impairment of intangible assets with finite lives was recognized during Fiscal 2023, Fiscal 2022, or Fiscal
2021.
Accounts Payable, Accrued Compensation and Accrued Expenses and Other Liabilities
Liabilities for accounts payable, accrued compensation and accrued expenses and other liabilities are carried at
cost, which approximates the fair value of the consideration expected to be paid in the future for goods and services
received, whether or not billed to us as of the balance sheet date. Accruals for medical insurance and workers’
compensation, which are included in accrued expenses and other liabilities in our consolidated balance sheets, include
estimated settlements for known claims, as well as accruals for estimates of incurred but not reported claims based on our
claims experience and statistical trends.
Legal and Other Contingencies
We are subject to certain litigation, claims and assessments in the ordinary course of business. The claims and
assessments may relate, among other things, to disputes about trademarks and other intellectual property, employee
relations matters, real estate, licensing arrangements, importing or exporting regulations, product safety requirements,
taxation or other topics. For those matters where it is probable that we have incurred a loss and the loss, or range of loss,
can be reasonably estimated, we have recorded reserves in accrued expenses and other liabilities or other non-current
liabilities in our consolidated financial statements for the estimated loss and related expenses, such as legal fees. In other
instances, because of the uncertainties related to both the probable outcome or amount or range of loss, we are unable to
make a reasonable estimate of a liability, if any, and therefore have not recorded a reserve. As additional information
becomes available or as circumstances change, we adjust our assessment and estimates of such liabilities accordingly.
Additionally, for any potential gain contingencies, we do not recognize the gain until the period that all contingencies have
been resolved and the amounts are realizable. We believe the outcome of outstanding or pending matters, individually and
in the aggregate, will not have a material impact on our consolidated financial statements, based on information currently
available.
In connection with acquisitions, we may enter into contingent consideration arrangements, which provide for the
payment of additional purchase price consideration to the sellers if certain performance criteria are achieved during a
specified period. We recognize the fair value of the contingent consideration based on its estimated fair value at the date of
acquisition. Such valuation requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount
rates and other factors. Each of these assumptions may involve a significant amount of uncertainty. Subsequent to the date
of acquisition, we periodically adjust the liability for the contingent consideration to reflect the fair value of the contingent
consideration by reassessing our valuation assumptions as of that date. A change in assumptions related to contingent
consideration amounts could have a material impact on our consolidated financial statements. Any change in the fair value
of the contingent consideration is recognized in SG&A in our consolidated statements of operations.
A change in the fair value of contingent consideration of $1 million associated with the 2017 acquisition of TBBC
was recognized in our consolidated statements of operations in Fiscal 2021. As of February 3, 2024, and January 28, 2023,
no contingent consideration related to the TBBC acquisition was recognized as a liability in our consolidated balance sheet.
In the aggregate, $4 million was earned by the sellers pursuant to the four year contingent consideration arrangement,
which ended on January 29, 2022, with the final payment of $2 million paid in Fiscal 2022. One of the sellers of TBBC is
an employee and continues to manage the operations of TBBC.
Other Non-current Liabilities
Amounts included in other non-current liabilities primarily consist of deferred compensation amounts and
amounts related to uncertain tax positions.
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Leases
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In the ordinary course of business, we enter into real estate lease agreements for our direct to consumer locations,
which include both retail and food and beverage locations, office and warehouse/distribution space, as well as leases for
certain equipment. Our real estate leases have varying terms and expirations and may have provisions to extend, renew or
terminate the lease agreement at our discretion, among other provisions. Our real estate lease terms are typically for a
period of ten years or less and typically require monthly rent payments with specified rent escalations during the lease
term. Our real estate leases usually provide for payments of our pro rata share of real estate taxes, insurance and other
operating expenses applicable to the property, and certain of our leases require payment of sales taxes on rental payments.
Also, our direct to consumer location leases often provide for contingent rent payments based on sales if certain sales
thresholds are achieved. For many of our real estate lease agreements, we obtain lease incentives from the landlord for
tenant improvement or other allowances. Our lease agreements do not include any material residual value guarantees or
material restrictive financial covenants. Substantially all of our leases are classified as long-term operating leases.
For our leases, we recognize operating lease liabilities equal to our obligation to make lease payments arising
from the leases on a discounted basis and operating lease assets which represent our right to use, or control the use of, a
specified asset for a lease term. Operating lease liabilities, which are included in current portion of operating lease
liabilities and non-current portion of operating lease liabilities in our consolidated balance sheets, are recognized at the
lease commencement date based on the present value of lease payments over the lease term. The significant judgments in
calculating the present value of lease obligations include determining the lease term and lease payment amounts, which are
dependent upon our assessment of the likelihood of exercising any renewal or termination options that are at our discretion,
as well as the discount rate applied to the future lease payments. The operating lease assets, which are included in operating
lease assets in our consolidated balance sheets, at commencement represent the amount of the operating lease liability
reduced for any lease incentives, including tenant improvement allowances. Typically, we do not include any renewal or
termination options at our discretion in the underlying lease term at the time of lease commencement as the probability of
exercise generally is not reasonably certain. Variable rental payments for real estate taxes, sales tax, insurance, other
operating expenses and contingent rent based on a percentage of net sales or adjusted periodically for inflation are not
included in lease expense used to calculate the present value of lease obligations recognized in our consolidated balance
sheet, but instead are recognized as incurred.
Lease expense for operating leases is generally recognized on a straight-line basis over the lease term, even if
there are fixed escalation clauses, lease incentives for rent holidays, or other similar items from the date that we take
possession of the space. Substantially all of our lease expense is recognized in SG&A in our consolidated statements of
operations.
We account for the underlying operating lease at the individual lease level. The lease guidance requires us to
discount future lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, our
estimated incremental borrowing rate. As our leases do not provide an implicit rate, we use an estimated incremental
borrowing rate based on information available at the applicable commencement date. Our estimated incremental borrowing
rate for a lease is the rate of interest we estimate we would have to pay on a collateralized basis over the lease term to
borrow an amount equal to the lease payments.
Foreign Currency
We are exposed to foreign currency exchange risk when we generate net sales or incur expenses in currencies
other than the functional currency of the respective operations. The resulting assets and liabilities denominated in amounts
other than the respective functional currency are re-measured into the respective functional currency at the rate of exchange
in effect on the balance sheet date, and income and expenses are re-measured at the average rates of exchange prevailing
during the relevant period. The impact of any such re-measurement is recognized in our consolidated statements of
operations in that period. Net losses (gains) included in our consolidated statements of operations related to foreign
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
currency transactions recognized in Fiscal 2023, Fiscal 2022 and Fiscal 2021 were less than $1 million, $2 million and $1
million, respectively.
Additionally, the financial statements of our operations for which the functional currency is a currency other than
the U.S. dollar are translated into U.S. dollars at the rate of exchange in effect on the balance sheet date for the balance
sheet and at the average rates of exchange prevailing during the relevant period for the statements of operations. The
impact of such translation is recognized in accumulated other comprehensive income (loss) in our consolidated balance
sheets and included in other comprehensive income (loss) in our consolidated statements of comprehensive income
resulting in no impact on net earnings for the relevant period. We view our foreign investments as long term, and we
generally do not hedge such foreign investments.
As of February 3, 2024, our foreign currency exchange risk exposure primarily results from our businesses
operating outside of the United States, which are primarily related to (1) our Tommy Bahama operations in Canada and
Australia purchasing goods in U.S. dollars or other currencies and (2) certain other transactions, including intercompany
transactions. During Fiscal 2023, Fiscal 2022 and Fiscal 2021, we did not enter into and were not a party to any foreign
currency exchange contracts.
Interest Rate Risk
As all of our indebtedness is variable-rate debt, we are exposed to market risk from changes in interest rates. If we
determine that our exposure to interest rate changes is higher than we believe is appropriate, we may attempt to limit the
impact of interest rate changes on earnings and cash flow through a mix of variable-rate and fixed-rate debt or by entering
into interest rate swap arrangements. Our assessment of appropriate levels of exposure to changes in interest rates also
considers our need for flexibility in our borrowing arrangements resulting from the significant seasonality of our business
and cash flows, anticipated future cash flows and our expectations about the risk of future interest rate changes, among
other factors. During Fiscal 2023, Fiscal 2022 and Fiscal 2021, we did not enter into and were not a party to any interest
rate swap agreements.
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy that categorizes
the inputs to valuation techniques into three broad levels. Level 1 inputs utilize quoted prices in active markets for identical
assets or liabilities. Level 2 inputs are based on other observable market data, such as quoted prices for similar assets and
liabilities, and inputs other than quoted prices that are observable such as interest rates and yield curves. Level 3 inputs are
developed from unobservable data reflecting our assumptions and include situations where there is little or no market
activity for the asset or liability.
As of February 3, 2024, our financial instruments consist primarily of our cash and cash equivalents, accounts
receivable, accounts payable, accrued expenses, other current liabilities and debt. Given their short-term nature, the
carrying amounts of cash and cash equivalents, receivables, accounts payable, accrued expenses and other current liabilities
generally approximate their fair values. The fair values of any cash and cash equivalents invested on an overnight basis in
money market funds, as well as short-term investments, are based upon the quoted prices in active markets provided by the
holding financial institutions, which are considered Level 1 inputs in the fair value hierarchy. Additionally, we believe the
carrying amounts of our variable-rate borrowings, if any, approximate fair value.
We have determined that our operating lease assets, property and equipment, intangible assets, goodwill and
certain other non-current assets included in our consolidated balance sheets are non-financial assets measured at fair value
on a non-recurring basis. We have determined that our approaches for determining fair values of each of these non-current
assets are generally based on Level 3 inputs as discussed in “Goodwill and Intangibles” above.
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Equity Compensation
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We have certain equity compensation plans as described in Note 9, which provide for the ability to grant restricted
shares, restricted share units, options and other equity awards to our employees and non-employee directors. We recognize
compensation expense related to equity awards to employees and non-employee directors in SG&A in our consolidated
statements of operations based on the fair value of the awards on the grant date. The fair value of restricted share awards
that are service and performance-based are determined based on the fair value of our common stock on the grant date. The
fair value of restricted share awards that are market-based (e.g. relative total shareholder return (“TSR”)) are determined
based on a Monte Carlo simulation model, which models multiple TSR paths for our common stock as well as the
comparator group, as applicable, to evaluate and determine the estimated fair value of the restricted share award.
For awards with specified service requirements, the fair value of the awards granted to employees is recognized
over the requisite service period. For performance-based awards (e.g. awards based on our earnings per share), during the
performance period we assess expected performance versus the predetermined performance goals and adjust the
cumulative equity compensation expense to reflect the relative expected performance achievement. The fair value of the
performance-based awards, if earned, is recognized on a straight-line basis over the aggregate performance period and any
additional required service period. For market-based awards (e.g. TSR-based awards) with specified service requirements
that are equal to or longer than the market-based specification period, the fair value of the awards granted to employees is
recognized over the requisite service period, regardless of whether, and to the extent to which, the market condition is
ultimately satisfied. The impact of stock award forfeitures on compensation expense is recognized at the time of forfeiture
as no estimate of future forfeitures is considered in our calculation of compensation expense for our service-based,
performance-based or market-based awards.
Comprehensive Income and Accumulated Other Comprehensive Loss
Comprehensive income consists of net earnings and specified components of other comprehensive income (loss).
Other comprehensive income (loss) includes changes in assets and liabilities that are not included in net earnings pursuant
to GAAP, such as foreign currency translation adjustments between the functional and reporting currencies and certain
unrealized gains (losses), if any. For us, other comprehensive income for each period presented primarily consists of the
impact of the foreign currency translation of our international operations. These other comprehensive income (loss)
amounts are deferred in accumulated other comprehensive loss, which is included in shareholders’ equity in our
consolidated balance sheets. As of February 3, 2024, the amounts included in accumulated other comprehensive loss in our
consolidated balance sheet primarily consist of the net foreign currency translation adjustment related to our Tommy
Bahama operations in Canada and Australia. No material amounts of accumulated other comprehensive loss were
reclassified from accumulated other comprehensive loss into our consolidated statements of operations during Fiscal 2023,
Fiscal 2022 or Fiscal 2021.
Dividends
Dividends are accrued at the time declared by our Board of Directors and typically paid within the same fiscal
quarter. Certain restricted share units, as described in Note 9, earn dividend equivalents which are accrued at the time of
dividend declaration by the Board of Directors in accrued expenses and other liabilities, but only paid if the restricted share
units are ultimately earned. Dividends accrued related to these restricted share units, which are included in accrued
expenses and other current liabilities in our consolidated balance sheet, were $1 million and $1 million, as of February 3,
2024 and January 28, 2023, respectively.
Share Repurchases
From time to time, we may repurchase shares of our stock under an open market repurchase program or otherwise.
We account for share repurchases for open market transactions by charging the excess of repurchase price over the par
value entirely to retained earnings based on the trade settlement date.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Concentration of Credit Risk and Significant Customers
We are exposed to concentrations of credit risk as a result of our receivables balances, for which the total exposure
is limited to the amount recognized in our consolidated balance sheets. We sell our merchandise to wholesale customers
operating in a number of distribution channels in the United States and other countries. We extend credit to certain
wholesale customers based on an evaluation of the customer’s credit history and financial condition, usually without
requiring collateral. Credit risk is impacted by conditions or occurrences within the economy and the retail industry and is
principally dependent on each customer’s financial condition. As of February 3, 2024, one customer represented 14% and
another customer represented 12% of our receivables, net included in our consolidated balance sheet.
No individual customer represented greater than 10% of our consolidated net sales in Fiscal 2023, Fiscal 2022 or
Fiscal 2021. However, a decision by the controlling owner of a group of stores or any significant customer to decrease the
amount of merchandise purchased from us or to cease carrying our products could have an adverse effect on our results of
operations in future periods.
Income Taxes
Income taxes included in our consolidated financial statements are determined using the asset and liability
method. Under this method, income taxes are recognized based on amounts of income taxes payable or refundable in the
current year as well as the impact of any items that are recognized in different periods for consolidated financial statement
reporting and tax return reporting purposes. Prepaid income taxes and income taxes payable are recognized in prepaid
expenses and other accrued expenses and liabilities, respectively, in our consolidated balance sheets.
As certain amounts are recognized in different periods for consolidated financial statement and tax return
reporting purposes, financial statement and tax bases of assets and liabilities differ, resulting in the recognition of deferred
tax assets and liabilities. The deferred tax assets and liabilities reflect the estimated future tax effects attributable to these
differences, as well as the impact of net operating loss, capital loss and federal and state credit carry-backs and carry-
forwards, each as determined under enacted tax laws at rates expected to apply in the period in which such amounts are
expected to be realized or settled. We account for the effect of changes in tax laws or rates in the period of enactment.
We recognize deferred tax assets to the extent we believe it is more likely than not that these assets will be
realized. In making such a determination, we consider all available positive and negative evidence, including future
reversals of existing taxable temporary differences, projected future taxable income, taxable income in any carry-
back years, tax-planning strategies, and recent results of operations.
Valuation allowances are established when we determine that it is more likely than not that some portion or all of
a deferred tax asset will not be realized. Valuation allowances are analyzed periodically and adjusted as events occur or
circumstances change that would indicate adjustments to the valuation allowances are appropriate. If we determine that we
are more likely than not to realize our deferred tax assets in the future in excess of their net recorded amount, we will
reduce the deferred tax asset valuation allowance, which will reduce income tax expense.
Also, we use a two-step approach for evaluating uncertain tax positions. Under the two-step method, recognition
occurs when we conclude that a tax position, based solely on technical merits, is more likely than not to be sustained upon
examination. The second step, measurement, is only addressed if step one has been satisfied. The tax benefit recorded is
measured as the largest amount of benefit determined on a cumulative probability basis that is more likely than not to be
realized upon ultimate settlement. Those tax positions failing to qualify for initial recognition are recognized in the first
subsequent interim period they meet the more likely than not threshold or are resolved through settlement or litigation with
the relevant taxing authority, upon expiration of the statute of limitations or otherwise. Alternatively, de-recognition of a
tax position that was previously recognized occurs when we subsequently determine that a tax position no longer meets the
more likely than not threshold of being sustained.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In the case of foreign subsidiaries, there are certain exceptions to the requirement that deferred tax liabilities be
recognized for the difference in the financial statement and tax bases of assets. If we consider the investment to be
essentially permanent in duration and the financial statement basis of the investment in a foreign subsidiary, excluding
undistributed earnings, exceeds the tax basis in such investment, the deferred tax liability is not recognized. Further,
deferred tax liabilities are not required to be recognized for undistributed earnings of foreign subsidiaries when we consider
those earnings to be permanently reinvested outside the United States. While distributions of foreign subsidiary earnings
are generally not subject to federal tax, there are other possible tax impacts, including state taxes and foreign withholding
tax, that must be considered if the earnings are not considered to be permanently reinvested. Further, a gain realized upon
the sale of a foreign subsidiary, if any, is not exempt from federal tax and consideration must therefore be given to the
impact of differences in the book and tax basis of foreign subsidiaries not arising from earnings when determining whether
a liability must be recorded if the investment is not considered permanently reinvested.
Additionally, United States tax regulations currently include certain tax provisions including a tax on global
intangible low-taxed income (“GILTI”), disallowance of deductions for certain payments (the base erosion anti-abuse tax,
or “BEAT”) and certain deductions enacted for certain foreign-derived intangible income (“FDII”). While the calculations
for GILTI, BEAT and FDII are complex calculations, these provisions did not have a material impact on our effective tax
rate in Fiscal 2023, Fiscal 2022 and Fiscal 2021. We recognize the impact of GILTI as a period cost.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law,
with applicable provisions reflected in our financial statements upon enactment. This law included several taxpayer
favorable provisions which impacted us, including allowing the carry-back of our Fiscal 2020 net operating losses to years
prior to the enactment of the United States Tax Cuts and Jobs Act in 2017 (“U.S. Tax Reform”), resulting in an increased
benefit for those losses, accelerated depreciation of certain leasehold improvement costs, relaxed interest expense
limitations and certain non-income tax benefits including deferral of employer FICA payments and an employee retention
credit. Substantially all of the income tax receivable in our consolidated balance sheets as of February 3, 2024 and January
28, 2023 relates to the carry-back of our Fiscal 2020 net operating losses to prior years.
We file income tax returns in the United States and various state, local and foreign jurisdictions. Our federal, state,
local and foreign income tax returns filed for years prior to Fiscal 2020, with limited exceptions, are no longer subject to
examination by tax authorities. We are currently under federal audit. The audit may conclude in the next 12 months and the
unrecognized tax benefits recognized in relation to the audits may differ from actual settlement amounts. It is not possible
to estimate the effect, if any, of the amount of such change during the next 12 months to previously recognized uncertain
tax positions in connection with the audits; however, we do not anticipate that total unrecognized tax benefits will
significantly change in the next 12 months.
Earnings Per Share
Basic net earnings per share amounts are calculated by dividing the net earnings amount by the weighted average
shares outstanding during the period. Shares repurchased, if any, are removed from the weighted average number of shares
outstanding upon repurchase based on the trade settlement date.
Diluted net earnings per share amounts are calculated similarly to the amounts above, except that the weighted
average shares outstanding in the diluted net earnings per share calculation also include the potential dilution using the
treasury stock method that could occur if dilutive securities, including restricted share awards or other dilutive awards,
were converted to shares. The treasury stock method assumes that shares are issued for any restricted share awards, options
or other dilutive awards that are "in the money," and that we use the proceeds received to repurchase shares at the average
market value of our shares for the respective period. For purposes of the treasury stock method, proceeds consist of future
compensation expense to be recognized and any cash to be paid. Performance-based and market-based restricted share
units are included in the computation of diluted shares only to the extent that the underlying performance or market
conditions (1) have been satisfied as of the end of the reporting period or (2) if the measurement criteria has been satisfied
and the result would be dilutive, even if the contingency period has not ended as of the end of the reporting period.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In periods that we incur a loss, we exclude restricted shares or restricted share unit awards as including the awards
would be anti-dilutive. No restricted shares or restricted share units were excluded from the diluted earnings per share
calculation for Fiscal 2023 or Fiscal 2022.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
Use of Estimates
The preparation of our consolidated financial statements in conformity with GAAP requires us to make certain
estimates and assumptions that affect the amounts reported as assets, liabilities, revenues and expenses in the consolidated
financial statements and accompanying notes. Actual results could differ from those estimates. Changes to our estimates
and assumptions could have a material impact on our consolidated financial statements.
Accounting Standards Adopted in Fiscal 2023
No recently issued guidance adopted in Fiscal 2023 had a material impact on our consolidated financial statements
upon adoption or is expected to have a material impact in future periods.
Recently Issued Accounting Standards Applicable to Future Years
In November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update
(ASU) 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which expands
annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about
significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim
periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the
updated standard will have on our financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax
Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and
income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption
permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement
disclosures.
Note 2. Operating Groups
We identify our operating groups based on the way our management organizes the components of our business for
purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused
management approach, emphasizing operational coordination and resource allocation across each brand’s direct to
consumer, wholesale and licensing operations, as applicable. With our acquisition of Johnny Was on September 19, 2022,
our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups.
Results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021.
Tommy Bahama, Lilly Pulitzer and Johnny Was each design, source, market and distribute apparel and related
products bearing their respective trademarks and may license their trademarks for other product categories. The Emerging
Brands operating group, which was organized in Fiscal 2022, consists of the operations of our smaller, earlier stage
Southern Tide, TBBC, Duck Head and Jack Rogers, which is a footwear brand acquired during Fiscal 2023. Prior to Fiscal
2022, Southern Tide was reported as a separate operating group, while both TBBC and Duck Head were included in
Corporate and Other. All prior year amounts have been restated to conform to the current year presentation.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Each of the brands included in Emerging Brands designs, sources, markets and distributes apparel and related
products bearing its respective trademarks and is supported by Oxford’s emerging brands team that provides certain
support functions to the smaller brands, including marketing and advertising execution, analysis and other functions. The
shared resources provide for operating efficiencies and enhanced knowledge sharing across the brands.
Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices,
substantially all financing activities, the elimination of inter-segment sales, any other items that are not allocated to the
operating groups, including LIFO inventory accounting adjustments as our LIFO pool does not correspond to our operating
group definitions, and the operations of our Lyons, Georgia distribution center and our Oxford America business, which we
exited in Fiscal 2022.
The tables below present certain financial information (in thousands) about our reportable operating groups, as
well as Corporate and Other.
Net sales
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands
Lanier Apparel (2)
Corporate and Other
Consolidated net sales
Depreciation and amortization
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands
Lanier Apparel (2)
Corporate and Other
Consolidated depreciation and amortization
Operating income (loss)
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands (3)
Lanier Apparel (2)
Corporate and Other (4)
Consolidated operating income
Interest expense, net
Earnings before income taxes
$
Fiscal
2023
898,807
343,499
202,859
126,825
$
Fiscal
2022
880,233
339,266
72,591
116,484
—
—
(515)
$ 1,571,475
2,954
$ 1,411,528
Fiscal
2021
$
724,305
298,995
—
90,053
24,858
3,868
$ 1,142,079
$
$
$
$
$
$
26,133
16,603
18,794
2,003
26,807
12,784
7,199
1,582
—
533
64,066
$
—
663
49,035
$
27,830
11,678
—
1,298
107
685
41,598
$
160,543
56,110
(104,776)
6,714
$
172,761
67,098
(1,544)
15,602
—
—
(37,609)
80,982
6,036
74,946
$
(35,143)
218,774
3,049
215,725
$
111,733
63,601
—
16,649
4,888
(31,368)
165,503
944
164,559
(1)
(2)
In Fiscal 2023, the operating loss for Johnny Was resulted from a $111 million impairment charge for goodwill and
intangible assets with no such charges in Fiscal 2022. Financial information for Fiscal 2022 consists of 19 weeks from
the September 19, 2022, acquisition date through January 28, 2023, only.
In Fiscal 2021, we exited our Lanier Apparel business, which is discussed in more detail in Note 12.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(3) The operating income for Emerging Brands in Fiscal 2023 included a $2 million impairment charge related to an
unconsolidated entity.
(4) The operating loss for Corporate and Other included a LIFO accounting charge of $10 million, $3 million and $16
million in Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively. The operating loss for Corporate and Other in Fiscal
2022 also included $3 million of transaction expenses and integration costs associated with the Johnny Was
acquisition. Fiscal 2021 also included a gain on sale of an unconsolidated entity of $12 million, respectively.
Fiscal 2023 Fiscal 2022 Fiscal 2021
Purchases of Property and Equipment
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands
Lanier Apparel (2)
Corporate and Other
Purchases of Property and Equipment
Total Assets
Tommy Bahama (3)
Lilly Pulitzer (4)
Johnny Was (1)
Emerging Brands (5)
Corporate and Other (6)
Total Assets
$ 39,060
24,100
6,105
3,768
$ 17,019
23,990
1,655
3,176
$
—
—
828
$ 46,668
$
1,065
$ 74,098
12,887
17,305
—
1,405
5
292
31,894
February 3,
2024
January 28,
2023
$
556,431
194,871
251,429
98,816
(3,703)
$ 1,097,844
$
569,833
211,119
334,603
91,306
(18,196)
$ 1,188,665
(1) The financial information for Johnny Was for Fiscal 2022 consists of 19 weeks from the September 19, 2022,
acquisition date through January 28, 2023, only. The decrease in Johnny Was total assets during Fiscal 2023 relates
primarily to the $111 million impairment charge for goodwill and intangible assets.
(2) Lanier Apparel was exited during Fiscal 2021.
(3)
Increase in Tommy Bahama total assets includes increases in receivables, operating lease assets and property plant and
equipment partially offset by reductions in inventories.
(4) Decrease in Lilly Pulitzer total assets includes reductions in inventories partially offset by increases in receivables.
(5)
Increase in Emerging Brands total assets includes increases in operating lease assets and property plant and equipment
from the opening of new retail store locations. Goodwill and intangible assets also increased related to the current year
acquisition of Jack Rogers and six former Southern Tide Signature Stores. These increase were partially offset by
reductions in inventories.
(6) Decrease in Corporate and Other total assets includes reductions in inventories, primarily due to the impact of LIFO
accounting.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Net book value of our property and equipment and net sales by geographic area are presented in the tables below
(in thousands). The other foreign amounts primarily relate to our Tommy Bahama operations in Canada and Australia.
Net Book Value of Property and Equipment
United States
Other foreign
Net Sales
United States
Other foreign
February 3,
2024
January 28,
2023
$
$
192,329
2,808
195,137
$
$
174,044
3,540
177,584
Fiscal 2023 Fiscal 2022 Fiscal 2021
$ 1,532,100
39,375
$ 1,571,475
$ 1,372,278
39,250
$ 1,411,528
$ 1,112,384
29,695
$ 1,142,079
The tables below quantify net sales, for each operating group and in total (in thousands), and the percentage of net
sales by distribution channel for each operating group and in total, for each period presented, except that the amounts
included for Johnny Was in Fiscal 2022 represent the post-acquisition period only. We have calculated all percentages
below based on actual data, and percentages may not add to 100 due to rounding.
Net Sales
Retail E‑commerce Food & Beverage Wholesale Other
Fiscal 2023
Tommy Bahama
Lilly Pulitzer
Johnny Was
Emerging Brands
Corporate and Other
Consolidated net sales
Tommy Bahama
Lilly Pulitzer
Johnny Was (1)
Emerging Brands
Corporate and Other
Consolidated net sales
Tommy Bahama
Lilly Pulitzer
Johnny Was
Emerging Brands
Lanier Apparel
Corporate and Other
Consolidated net sales
Net Sales
Retail E‑commerce Food & Beverage Wholesale Other
25 %
51 %
41 %
43 %
— %
34 %
Fiscal 2022
13 %
— %
— %
— %
— %
7 %
17 % — %
16 % — %
21 % — %
46 % — %
— % NM %
20 % — %
24 %
51 %
42 %
42 %
— %
33 %
Fiscal 2021
13 %
— %
— %
— %
— %
8 %
17 % — %
16 % — %
22 % — %
52 % — %
— % NM %
20 % — %
25 %
50 %
— %
39 %
— %
— %
32 %
13 %
— %
— %
— %
— %
— %
8 %
15 % — %
16 % — %
— % — %
56 % — %
100 % — %
61 %
39 %
20 % — %
$
$
$
898,807
343,499
202,859
126,825
45 %
33 %
38 %
11 %
(515) — %
39 %
$ 1,571,475
880,233
339,266
72,591
116,484
46 %
33 %
36 %
6 %
2,954 — %
39 %
$ 1,411,528
724,305
298,995
47 %
34 %
— — %
90,053
5 %
24,858 — %
3,868 — %
39 %
$ 1,142,079
93
Net Sales
Retail E‑commerce Food & Beverage Wholesale Other
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 3. Property and Equipment, Net
Property and equipment, net, is summarized as follows (in thousands):
Land
Buildings and improvements
Furniture, fixtures, equipment and technology
Leasehold improvements
Less accumulated depreciation and amortization
Property and equipment, net
Note 4. Business Combinations
February 3,
2024
2,887
32,651
315,810
270,861
622,209
(427,072)
195,137
$
$
January 28,
2023
$
$
3,090
32,495
278,589
255,955
570,129
(392,545)
177,584
During Fiscal 2023, we completed business combinations that were insignificant, individually and in the
aggregate, to the consolidated financial statements for an aggregate purchase price of $11 million. The business
combinations included the acquisition of certain assets from Jack Rogers LLC and Jack Rogers Holding Company LLC
and their subsidiaries (collectively “Jack Rogers”) and the acquisition of six former Southern Tide signature stores. The
assets acquired and liabilities assumed were recorded based on the provisional estimated fair values, including intangible
assets of $5 million, inventory of $3 million and goodwill of $3 million. See "Note 5—Intangible Assets and Goodwill" for
the allocation of goodwill to the respective segments. The operating results of each acquisition have been included in the
consolidated financial statements since the respective acquisition dates.
Johnny Was
On September 19, 2022, we acquired 100% of the ownership interests in JW Holdings, LLC and its subsidiaries
(collectively “Johnny Was”). Johnny Was owns the Johnny Was California lifestyle brand and its related operations
including the design, sourcing, marketing and distribution of collections of affordable luxury, artisan-inspired bohemian
apparel, accessories and home goods.
This acquisition was accounted for under the acquisition method of accounting for business combinations. The
preliminary purchase price for the acquisition of Johnny Was totaled $270 million in cash. After giving effect to the initial
working capital adjustment, the purchase price paid at closing was $271 million, including acquired cash of $7 million. We
used cash and short-term investments on hand and borrowings under our U.S. Revolving Credit Agreement to fund the
transaction. During Fiscal 2023, additional consideration of $2 million was transferred related to measurement period
adjustments. There were no contingent consideration arrangements associated with this transaction.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The final estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed,
including a reconciliation to the total purchase consideration, were as follows (in thousands):
Cash and cash equivalents
Receivables
Inventories
Prepaid expenses and other assets
Property and equipment
Intangible assets
Goodwill
Operating lease assets
Accounts payable, accrued expenses and other liabilities
Non-current portion of operating lease liabilities
Purchase price
Provisional
Amounts at
January 28, 2023
7,296
$
8,777
23,434
6,353
21,108
134,640
96,637
54,859
(34,777)
(47,009)
271,318
$
Measurement
Period Adjustments
$
— $
—
(28)
—
(947)
—
Final Amounts at
February 3, 2024
7,296
8,777
23,406
6,353
20,161
134,640
99,236
54,859
(34,078)
(47,009)
273,641
$
2,599
—
699
—
2,323
$
Goodwill represents the amount by which the cost to acquire Johnny Was exceeds the fair value of individual
acquired assets less liabilities of the business at acquisition. We made measurement-period adjustments, as shown in the
table above, that increased the amount of provisional goodwill by $3 million. Substantially all the goodwill is deductible
for income tax purposes.
We acquired tradenames and trademarks as well as customer relationships as part of the acquisition. We used the
relief from royalty method to estimate the fair value of trademarks and tradenames and the multi-period excess earnings
method under the income approach to estimate the fair value of customer relationships. Intangible assets allocated in
connection with our preliminary purchase price allocation consisted of the following (in thousands):
Finite lived intangible assets acquired, primarily consisting of customer relationships
Trade names and trademarks
Useful life
8 - 13 years
Indefinite
$
Johnny Was
acquisition
56,740
77,900
134,640
$
The consolidated pro forma information presented below (in thousands, except per share data) gives effect to the
September 19, 2022 acquisition of Johnny Was as if the acquisition had occurred as of the beginning of Fiscal 2021. The
information presented below is for illustrative purposes only, is not indicative of results that would have been achieved if
the acquisition had occurred as of the beginning of Fiscal 2021 and is not intended to be a projection of future results of
operations. The consolidated pro forma information has been prepared from historical financial statements for Johnny Was
and us for the periods presented, including without limitation, purchase accounting adjustments, but excluding any seller
specific management/advisory or similar expenses and any synergies or operating cost reductions that may be achieved
from the combined operations in the future.
Net sales
Earnings before income taxes
Net earnings
Earnings per share:
Basic
Diluted
Fiscal 2022
Fiscal 2021
$
$
$
$
$
1,546,371
237,919
182,380
11.47
11.22
$
$
$
$
$
1,327,875
169,832
135,276
8.02
8.13
95
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Fiscal 2022 pro forma information above includes amortization of acquired intangible assets, but excludes the
transaction expenses and integration costs associated with the transaction and the $4 million of incremental cost of goods
sold associated with the step-up of inventory at acquisition that was recognized by us in our Fiscal 2022 consolidated
statement of operations. The Fiscal 2021 pro forma information above includes amortization of acquired intangible assets,
transaction expenses and integration costs associated with the transaction and the $4 million of incremental cost of goods
sold associated with the step-up of inventory at acquisition. Additionally, the pro forma adjustments for each period prior to
the September 2022 acquisition reflect an estimate of incremental interest expense associated with additional borrowings
and income tax expense that would have been incurred subsequent to the acquisition.
Note 5. Intangible Assets and Goodwill
Intangible assets by category are summarized below (in thousands):
February 3,
Intangible assets with finite lives
Accumulated amortization and impairment
Total intangible assets with finite lives, net
Intangible assets with indefinite lives:
Tommy Bahama Trademark
Lilly Pulitzer Trademark
Johnny Was Trademark
Southern Tide Trademark
Total intangible assets with indefinite lives
Total intangible assets, net
$
$
$
$
2024
113,413 $
(64,812)
48,601
January 28,
2023
108,513
(50,068)
58,445
110,700 $
27,500
66,000
9,300
213,500 $
110,700
27,500
77,900
9,300
225,400
262,101 $
283,845
Intangible assets, by operating group and in total, for Fiscal 2021, Fiscal 2022 and Fiscal 2023 are as follows (in
thousands):
Balance, January 30, 2021
Acquisition
Impairment
Amortization
Balance, January 29, 2022
Acquisition
Impairment
Amortization
Balance, January 28, 2023
Acquisition
Impairment
Amortization
Balance, February 3, 2024
Johnny
Was
Tommy
Bahama
$ 110,700
—
—
—
$ 110,700
—
—
—
$ 110,700
—
—
—
$ 110,700
Lilly
Pulitzer
$ 28,317
—
—
$
(220)
$ 28,097
—
—
$
(238)
$ 27,859
—
—
(227)
$ 27,632
Total
and Other
Brands
— $ 17,170
—
—
—
—
—
(660)
— $ 16,510
—
—
Emerging Lanier Corporate
Apparel
$ — $
—
—
—
$ — $
—
—
—
$ — $
—
—
—
$ — $
— $ 156,187
—
—
—
—
—
(880)
— $ 155,307
134,640
—
—
—
—
(6,102)
— $ 283,845
4,899
—
(11,900)
—
—
(14,743)
— $ 262,101
(670)
$ 15,840
4,899
(664)
$ 20,075
—
—
134,640
(5,194)
$ 129,446
—
(11,900)
(13,852)
$ 103,694
Based on the current estimated useful lives assigned to our intangible assets, amortization expense for each of the
next five years is expected to be $12 million, $9 million, $6 million, $5 million and $4 million.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Goodwill, by operating group and in total, for Fiscal 2021, Fiscal 2022 and Fiscal 2023 is as follows (in
thousands):
Balance, January 30, 2021
Other, including foreign currency
Balance January 29, 2022
Acquisition
Other, including foreign currency
Balance, January 28, 2023
Acquisition
Measurement-period adjustments
Impairment
Other, including foreign currency
Balance, February 3, 2024
Emerging Corporate
Brands
3,600
and Other
$
—
$
$
$
Tommy
Bahama
788
(41)
747
—
(8)
739
—
—
—
(42)
697
$
$
Lilly
Pulitzer
$ 19,522
$
—
$
$ 19,522
—
—
$ 19,522
—
—
—
—
$
$ 19,522
Johnny
Was
— $
—
— $
96,637
—
$
$ 96,637
—
2,599
(99,236)
—
— $
3,600
—
—
$
3,600
3,371
—
—
—
$
6,971
Total
23,910
— $
(41)
—
23,869
— $
96,637
—
—
(8)
— $ 120,498
3,371
—
2,599
—
(99,236)
—
—
(42)
27,190
— $
Goodwill and Other Intangible Assets Impairment Testing
We assess the recoverability of goodwill and other indefinite-lived intangible assets annually, at the beginning of
the fourth quarter of each fiscal year, and between annual tests if an event occurs or circumstances change that would
indicate that it is more likely than not that the carrying amount may be impaired. Intangible assets with finite lives are
amortized over their estimated useful life and are tested for impairment, along with other long-lived assets, when events
and circumstances indicate that the assets might be impaired. Please see Note 1, “Summary of Significant Accounting
Policies,” for discussion of the Company’s goodwill and intangible assets impairment testing process.
Based on our annual quantitative assessment as of October 29, 2023, and in conjunction with our fourth quarter
annual forecasting process for 2024 which impacts key assumptions used in our impairment assessments, it was determined
that the Johnny Was reporting unit and intangible assets with an indefinite life were impaired. The impairment charges for
Johnny Was reflect the current challenging macroeconomic environment that has resulted in a more cautious consumer and
an increase in interest rates. The more cautious consumer has both negatively impacted Johnny Was’ wholesale customers
and direct to consumer operations resulting in Johnny Was not performing as originally projected in Fiscal 2023 and the
moderation of forecasted revenue and operating income in future years. Interest rates also increased significantly after the
acquisition of Johnny Was in September 2022 leading to an increase in discount rates used in our impairment analyses. We
recorded $111 million of noncash impairment charges during the fourth quarter of Fiscal 2023, including a goodwill
impairment of $99 million and an intangible asset impairment of $12 million, which were included in Impairment of
goodwill, intangible assets and equity method investments in our Consolidated Statements of Operations.
Note 6. Debt
On March 6, 2023, we entered into a Second Amendment to the Fourth Amended and Restated Credit Agreement
(the “U.S. Revolving Credit Agreement”). The U.S. Revolving Credit Agreement provides for a revolving credit facility of
up to $325 million, which may be used to fund working capital, to fund future acquisitions and for general corporate
purposes. The U.S. Revolving Credit Agreement amended and restated our Fourth Amended and Restated Credit
Agreement (the “Prior Credit Agreement”). The U.S. Revolving Credit Agreement (1) extended the maturity of the facility
from July 2024 to March 2028 and (2) modified certain provisions of the agreement. In other non-current assets, we
capitalized debt issuance costs of $2 million in connection with commitments upon entering into the U.S. Revolving Credit
Agreement.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Pursuant to the U.S. Revolving Credit Agreement, the interest rate applicable to our borrowings under the U.S.
Revolving Credit Agreement is based on either the Term Secured Overnight Financing Rate plus an applicable margin of
135 to 185 basis points or prime plus an applicable margin of 25 to 75 basis points.
The U.S. Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified
percentages of eligible categories of assets, (2) accrues variable-rate interest (weighted average interest rate of 7% as of
February 3, 2024), unused line fees and letter of credit fees based upon average utilization or unused availability, as
applicable, (3) requires periodic interest payments with principal due at maturity and (4) is secured by a first priority
security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts
receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory,
investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies,
supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal
property.
We have issued standby letters of credit of $5 million in the aggregate under the U.S. Revolving Credit Agreement
as of February 3, 2024. Outstanding letters of credit under the U.S. Revolving Credit Agreement reduce the amount of
borrowings available to us.
As of February 3, 2024, we had $29 million of borrowings outstanding and $288 million in unused availability
under the U.S. Revolving Credit Agreement. Under the Prior Credit Agreement as of January 28, 2023 we had $119
million of borrowings outstanding and $199 million of unused availability.
Compliance with Covenants
The U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of
financial information, compliance with law, maintenance of property, insurance requirements and conduct of business.
Also, the U.S. Revolving Credit Agreement is subject to certain negative covenants or other restrictions including, among
other things, limitations on our ability to (1) incur debt, (2) guaranty certain obligations, (3) incur liens, (4) pay dividends
to shareholders, (5) repurchase shares of our common stock, (6) make investments, (7) sell assets or stock of subsidiaries,
(8) acquire assets or businesses, (9) merge or consolidate with other companies or (10) prepay, retire, repurchase or redeem
debt.
Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess
availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10%
of availability. In such case, our fixed charge coverage ratio as defined in the U.S. Revolving Credit Agreement must not
be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered.
This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit
Agreement of more than the greater of (1) $23.5 million or (2) 10% of availability for 30 consecutive days.
We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the
U.S. Revolving Credit Agreement are customary for those included in similar facilities entered into at the time we amended
the U.S. Revolving Credit Agreement. During Fiscal 2023 and as of February 3, 2024, no financial covenant testing was
required pursuant to our U.S. Revolving Credit Agreement, or the Prior Credit Agreement, as applicable, as the minimum
availability threshold was met at all times. As of February 3, 2024, we were compliant with all applicable covenants related
to the U.S. Revolving Credit Agreement.
Note 7. Leases and Other Commitments
For Fiscal 2023, operating lease expense, which includes amounts used in determining the operating lease liability
and operating lease asset was $71 million and variable lease expense was $48 million, resulting in total lease expense of
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
$119 million. For Fiscal 2022, operating lease expense, which includes amounts used in determining the operating lease
liability and operating lease asset was $61 million and variable lease expense was $43 million, resulting in total lease
expense of $104 million. For Fiscal 2021, operating lease expense was $58 million and variable lease expense was $35
million, resulting in total lease expense of $93 million. As of both February 3, 2024 and January 28, 2023, the weighted-
average remaining operating lease term was six years. The weighted-average discount rate for operating leases was 5.7%
and 4.7% as of February 3, 2024 and January 28, 2023, respectively. Cash paid for lease amounts included in the
measurement of operating lease liabilities in Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $89 million, $75 million and
$70 million, respectively.
As of February 3, 2024, the required lease liability payments, which include base rent amounts but excludes
payments for real estate taxes, sales taxes, insurance, other operating expenses and contingent rents incurred under
operating lease agreements, for the fiscal years specified below were as follows (in thousands):
2024
2025
2026
2027
2028
After 2028
Total lease payments
Less: Difference between discounted and undiscounted lease payments
Present value of lease liabilities
Note 8. Shareholders’ Equity
Common Stock
Operating lease
78,886
64,045
58,746
45,053
39,334
82,348
368,412
60,133
308,279
$
$
We had 60 million shares of $1.00 par value per share common stock authorized for issuance as of February 3,
2024 and January 28, 2023. As of February 3, 2024 and January 28, 2023, we had 16 million shares and 16 million shares,
respectively, of common stock issued and outstanding.
Dividends
During Fiscal 2023, Fiscal 2022 and Fiscal 2021, we paid $42 million, $35 million and $28 million, respectively,
of dividends to our shareholders. Although we have paid dividends in each quarter since we became a public company in
July 1960, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital,
including payment of outstanding debt, funding of acquisitions, funding of capital expenditures or repurchases of
outstanding shares, may be in our best interest; if our expectations of future cash flows and future cash needs outweigh the
ability to pay a dividend; or if the terms of our credit facility, other debt instruments or applicable law limit our ability to
pay dividends.
Share Repurchases
During Fiscal 2023, Fiscal 2022 and Fiscal 2021, we repurchased $20 million, $92 million and $8 million,
respectively in open market transactions. Additionally, during Fiscal 2023, Fiscal 2022 and Fiscal 2021, we purchased $10
million, $3 million and $3 million, respectively, of shares from our employees to cover employee tax liabilities related to
the vesting of shares of our stock.
99
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
On December 7, 2021, our Board of Directors authorized us to spend up to $150 million to repurchase shares of
our stock in open market transactions. This authorization superseded and replaced all previous authorizations to repurchase
shares of our stock and has no automatic expiration. Pursuant to the Board of Directors’ December 7, 2021, authorization,
we repurchased 196,000 shares of our common stock for $20 million, an average price of $102 per share, in open market
transactions during Fiscal 2023. As of February 3, 2024, $30 million of the authorization remained available for future
repurchases of our common stock.
Preferred Stock
We had 30 million shares of $1.00 par value preferred stock authorized for issuance as of February 3, 2024 and
January 28, 2023. No preferred shares were issued or outstanding as of February 3, 2024 or January 28, 2023.
Note 9. Equity Compensation
Long-Term Stock Incentive Plan and Equity Compensation Expense
As of February 3, 2024, shares available for issuance under our Long-Term Stock Incentive Plan (the “Long-
Term Stock Incentive Plan”) were less than 1 million shares, which includes the additional shares approved for grant under
the Long-Term Stock Incentive Plan by shareholders in June 2022. The Long-Term Stock Incentive Plan allows us to grant
equity-based awards to employees and non-employee directors in the form of, among other things, stock options, stock
appreciation rights, restricted shares and/or restricted share units. No additional shares are available under any predecessor
plans.
The specific provisions of restricted share awards are evidenced by agreements with the employee as determined
by the compensation committee of our Board of Directors. Restricted shares and restricted share units granted to officers
and other key employees in recent years generally vest three years from the date of grant if (1) the performance or market
threshold, if any, was met and (2) the employee is still employed by us on the vesting date. The employee generally is
restricted from transferring or selling any restricted shares or restricted share units and forfeits the awards upon the
termination of employment prior to the end of the vesting period. The restricted share unit awards granted during Fiscal
2022 and Fiscal 2023 include certain clauses related to accelerated vesting upon the occurrence of qualifying retirement,
death or disability of the employee prior to the vesting date, while the restricted share awards granted in prior years did not
include such clauses.
In recent years, we have granted a combination of service-based restricted share awards and awards based on total
shareholder return (“TSR”) to certain of our employees. As of February 3, 2024, there was $20 million of unrecognized
compensation expense related to the unvested service-based and TSR-based restricted share awards included in the tables
below, which have been granted to employees but have not yet vested. As of February 3, 2024, the weighted average
remaining life of the outstanding service-based and TSR-based awards was one year and two years, respectively.
Service-Based and Performance-Based Restricted Share Awards
During Fiscal 2023 and Fiscal 2022, we granted service-based restricted share and restricted share unit awards,
while in Fiscal 2021 and years prior we granted service-based restricted shares. At the time that service-based restricted
share unit awards are granted, the employee is generally, subject to the terms of the respective agreement, entitled to
dividend equivalents, payable at the time of payment of any dividends paid on our common stock as long as the awards are
outstanding, but do not have any voting rights. Whereas, at the time that service-based restricted share awards were issued,
the shareholder is generally, subject to the terms of the respective agreement, entitled to the same dividend and voting
rights as other holders of our common stock as long as the restricted shares are outstanding.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Service-based Restricted Share Units
The table below summarizes the service-based restricted share awards, including both restricted shares and
restricted share units, and performance-based award activity for officers and other key employees during Fiscal 2023,
Fiscal 2022, and Fiscal 2021 (which do not include the TSR-based Restricted Share Unit activity described below):
Awards outstanding at beginning of year
Awards granted
Awards vested, including awards
repurchased from employees for
employees’ tax liability
Awards forfeited
Awards outstanding on February 3, 2024
Fiscal 2023
Weighted-
Number of
Shares or
Units
212,945
60,505
average
grant date
fair value
64
115
$
$
Fiscal 2022
Weighted-
Number of
Shares
or Units
238,889
67,965
average
grant date
fair value
61
89
$
$
Fiscal 2021
Weighted-
Number of
Shares
or Units
308,369
42,855
average
grant date
fair value
61
89
$
$
(111,095) $
(3,561) $
$
158,794
41
83
99
(83,324) $
(10,585) $
212,945
$
77
62
64
(81,283) $
(31,052) $
238,889
$
77
62
61
The following table summarizes information about unvested service-based restricted share awards, including both
restricted shares and restricted share units, as of February 3, 2024.
Description
Service-based restricted shares with May 2024 vesting date
Service-based restricted share units with May 2025 vesting date
Service-based restricted share units with May 2026 vesting date
Total service-based awards outstanding at end of year
Number of
Unvested
Share
Awards
34,455
64,134
60,205
158,794
Average
Fair Value
on
Date of Grant
89
$
89
$
115
$
99
$
Additionally, during the First Quarter of Fiscal 2024, we granted 0.1 million of service-based restricted share
units, subject to the recipient remaining an employee through the May 2027 vesting date.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
TSR-based Restricted Share Units
The table below summarizes the TSR-based restricted share unit activity for officers and other key employees (in
units) during Fiscal 2023, Fiscal 2022, and Fiscal 2021:
TSR-based awards outstanding at
beginning of year
TSR-based awards granted
TSR-based restricted shares earned and
vested, including restricted share units
repurchased from employees for
employees’ tax liability
TSR-based awards forfeited
TSR-based awards outstanding on
February 3, 2024
Fiscal 2023
Weighted-
Number of
Share Units
average
grant date
fair value
Fiscal 2022
Weighted-
Number of
Share Units
average
grant date
fair value
Fiscal 2021
Weighted-
Number of
Share Units
average
grant date
fair value
196,040
74,605
$
$
89
153
130,440
66,525
$
$
78
111
83,345
56,750
$
$
50
117
(76,340) $
(2,142) $
50
115
— $
(925) $
—
115
— $
(9,655) $
192,163
$
129
196,040
$
89
130,440
$
—
68
78
The restricted share units granted in the table above are at target. The TSR-based restricted share units are subject
to (1) our achievement of a specified TSR-based ranking by us relative to a comparator group during a period of
approximately three years from the date of grant and (2) generally the recipient remaining an employee through the vesting
date which is approximately three years from the date of grant. The number of shares ultimately earned, which will be
settled in shares of our common stock on the vesting date, will be between 0% and 200% of the restricted share units at
target. These TSR-based restricted share units are entitled to dividend equivalents for dividends declared on our common
stock prior to the vesting date, which are payable after vesting of the restricted shares, solely for the number of shares
ultimately earned. These TSR-based restricted share units do not have any voting rights prior to the vesting date.
The following table summarizes information about unvested TSR-based restricted share units as of February 3,
2024.
Description
TSR-based restricted share units (at target) with May 2024 vesting date
TSR-based restricted share units (at target) with May 2025 vesting date
TSR-based restricted share units (at target) with May 2026 vesting date
Total TSR-based restricted share units outstanding at end of year
Unvested
TSR-Based
Share/Unit
52,200
65,358
74,605
192,163
Fair Value
on
Date of Grant
117
$
111
$
153
$
129
$
Additionally, during the First Quarter of Fiscal 2024, we granted 0.1 million of TSR-based restricted share units at
target, subject to (1) our achievement of a specified TSR-based ranking by Oxford relative to a comparator group during a
period of approximately three years from the date of grant and (2) the recipient remaining an employee through the May
2027 vesting date. The number of shares ultimately earned will be between 0% and 200% of the restricted share units at
target.
Director Share Awards
In addition to shares granted to employees, we grant restricted share awards to our non-employee directors for a
portion of each non-employee director’s annual compensation. The non-employee directors must complete certain service
requirements; otherwise, the restricted shares are subject to forfeiture. On the date of issuance, the non-employee directors
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
are entitled to the same dividend and voting rights as other holders of our common stock. The non-employee directors are
restricted from transferring or selling the restricted shares prior to the end of the vesting period.
Employee Stock Purchase Plan
There were less than 1 million shares of our common stock authorized for issuance under our Employee Stock
Purchase Plan ("ESPP") as of February 3, 2024. The ESPP allows qualified employees to purchase shares of our common
stock on a quarterly basis, based on certain limitations, through payroll deductions. The shares purchased pursuant to the
ESPP are not subject to any vesting or other restrictions. On the last day of each calendar quarter, the accumulated payroll
deductions are applied toward the purchase of our common stock at a price equal to 85% of the closing market price on that
date. Equity compensation expense related to the employee stock purchase plan recognized was less than $1 million in
each of Fiscal 2023, Fiscal 2022 and Fiscal 2021.
Note 10. Defined Contribution Plans
We have a tax-qualified voluntary defined contribution retirement savings plan covering substantially all United
States employees. If an eligible participant elects to contribute, a portion of the contribution may be matched by us.
Additionally, we incur certain charges related to our non-qualified deferred compensation plan as discussed in Note 1. Our
aggregate expense under these defined contribution and non-qualified deferred compensation plans in Fiscal 2023, Fiscal
2022 and Fiscal 2021 was $7 million, $5 million and $4 million, respectively. The increase in Fiscal 2023 was primarily
due to an increase in the company match percentage for our defined contribution plan.
Note 11. Income Taxes
The following table summarizes our distribution between domestic and foreign earnings (loss) before income
taxes and the provision (benefit) for income taxes (in thousands):
Earnings (loss) before income taxes:
Domestic
Foreign
Earnings (loss) before income taxes
Income taxes:
Current:
Federal
State
Foreign
Deferred—Domestic
Deferred—Foreign
Income taxes
Fiscal
2023
Fiscal
2022
Fiscal
2021
$ 62,772
12,174
$ 74,946
$ 206,944
8,781
$ 215,725
$ 161,233
3,326
$ 164,559
$ 28,183
7,530
2,419
38,132
(24,083)
194
$ 14,243
$ 41,776
8,835
1,191
51,802
71
(1,883)
$ 49,990
$
$
24,998
3,780
409
29,187
4,155
(104)
33,238
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Reconciliations of the United States federal statutory income tax rates and our effective tax rates are summarized
as follows:
Statutory federal income tax rate
State income taxes—net of federal income tax benefit
Change in reserve for uncertain tax positions & method change
Impact of foreign operations rate differential
U.S. federal tax credits
Impact of prior year true-ups
Excess Tax Benefit, Restricted Stock Vesting
Impact of valuation allowances related to operating losses
Impact of valuation allowances related to capital losses
Impact of capital losses
Other, net
Effective tax rate for continuing operations
Fiscal
2023
Fiscal
2022
Fiscal
2021
21.0 %
1.6 %
1.5 %
0.3 %
(3.0)%
(1.9)%
(1.6)%
(0.9)%
— %
— %
2.0 %
19.0 %
21.0 %
3.6 %
0.2 %
0.1 %
(0.7)%
(0.3)%
(0.1)%
(1.6)%
— %
— %
1.0 %
23.2 %
21.0 %
3.7 %
(1.0)%
0.1 %
(0.6)%
(0.7)%
(0.3)%
(0.8)%
1.2 %
(2.9)%
0.5 %
20.2 %
Deferred tax assets and liabilities included in our consolidated balance sheets are comprised of the following (in
thousands):
Deferred Tax Assets:
Inventories
Accrued compensation and benefits
Receivable allowances and reserves
Operating lease liabilities
Operating loss and other carry-forwards
Other, net
Deferred tax assets
Deferred Tax Liabilities:
Operating lease assets
Depreciation and amortization
Acquired intangible assets
Deferred tax liabilities
Valuation allowance
Net deferred tax asset (liability)
February 3,
2024
January 28,
2023
$
$
21,254
10,982
2,433
77,150
709
5,902
118,430
(74,004)
(16,907)
(1,051)
(91,962)
(2,289)
24,179
$
$
20,561
9,637
2,580
71,871
757
4,901
110,307
(66,145)
(15,289)
(26,030)
(107,464)
(2,448)
395
The majority of our valuation allowance of $2 million as of February 3, 2024 and January 28, 2023 relates to our
capital loss carry-forwards. The amount of the valuation allowance could change in the future if our operating results or
estimates of future taxable operating results changes.
Certain amounts of foreign earnings are subject to U.S. federal tax currently pursuant to the GILTI rules regardless
of whether those earnings are distributed, and actual distributions of foreign earnings are generally no longer subject to
U.S. federal tax. We continue to assert that our investments in substantially all of our foreign subsidiaries and substantially
all of the related earnings are permanently reinvested outside the United States. We believe that any other taxes such as
foreign withholding or U.S. state tax payable would be immaterial if we were to repatriate the foreign earnings. Therefore,
we have not recorded any deferred tax liabilities related to these foreign investments and earnings in our consolidated
balance sheets as of February 3, 2024 and January 28, 2023.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accounting for income taxes requires that we offset deferred tax liabilities and assets within each tax jurisdiction
and present the net deferred tax amount for each jurisdiction as a net deferred tax amount in our consolidated balance
sheets. The amounts of deferred income taxes included in our consolidated balance sheets are as follows (in thousands):
Assets:
Deferred tax assets
Liabilities:
Deferred tax liabilities
Net deferred tax asset (liability)
February 3,
2024
January 28,
2023
$
$
24,179
$
3,376
—
$
24,179
(2,981)
395
A reconciliation of the changes in the gross amount of unrecognized tax benefits, which are included in other non-
current liabilities, is as follows (in thousands):
Balance of unrecognized tax benefits at beginning of year
Increase related to prior period tax positions
Decrease related to prior period tax positions
Increase related to current period tax positions
Decrease related to settlements with taxing authorities
Decrease related to lapse of statute of limitations
Balance of unrecognized tax benefits at end of year
Fiscal 2023
Fiscal 2022
Fiscal 2021
$
$
3,664
233
(2,027)
1,940
—
(100)
3,710
$
$
3,390
110
—
646
—
(482)
3,664
$
$
5,261
10
—
527
(2,305)
(103)
3,390
Approximately $2 million of our uncertain tax positions as of February 3, 2024, if recognized, would reduce the
future effective tax rate in the period settled. The total amount of unrecognized tax benefits relating to our tax positions is
subject to change based on future events including, but not limited to, settlements of ongoing audits and assessments and
the expiration of applicable statutes of limitation. The ultimate occurrence, outcomes, and timing of such events could
differ from our current expectations. Interest and penalties associated with unrecognized tax positions are recorded within
income tax expense in our consolidated statements of operations. During each of Fiscal 2023, Fiscal 2022 and Fiscal 2021,
we recognized less than $1 million of interest and penalties associated with unrecognized tax positions in our consolidated
statements of operations.
Inflation Reduction Act of 2022
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (“IRA”) into law. The IRA
implemented a corporate alternative minimum tax, subject to certain thresholds being met, and a 1% excise tax on share
repurchases effective beginning January 1, 2023. We do not currently expect that the tax-related provisions of the IRA will
have a material effect on our reported results, cash flows or financial position. For Fiscal 2023, excise taxes included as
part of the price of common stock repurchased during the period did not have a material effect on our reported results.
Pillar Two Directive
In December 2022, the EU Member States formally adopted the Pillar Two Directive, which generally provides
for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development
Pillar Two Framework. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the
directive. A significant number of other countries are expected to also implement similar legislation with varying effective
dates in the future. We are continuing to evaluate the potential effect on future periods of the Pillar Two Framework,
pending legislative adoption by additional individual countries.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12. Lanier Apparel Exit
In Fiscal 2021, we exited our Lanier Apparel business, which had been focused on moderately priced tailored
clothing and related products. The Lanier Apparel exit aligns with our stated business strategy of developing and marketing
compelling lifestyle brands. It also took into consideration the increased macroeconomic challenges faced by the Lanier
Apparel business, many of which were magnified by the COVID-19 pandemic.
During Fiscal 2021, we recognized in the Lanier Apparel operating group a benefit of $2 million related to the
Lanier Apparel exit primarily consisting of (1) $4 million of reductions in inventory markdowns previously recognized, of
which the substantial majority of this amount was reversed in Corporate and Other as part of LIFO accounting and (2) a $3
million gain on the sale of Lanier Apparel’s Toccoa, Georgia distribution center. These items were partially offset by (1) $2
million of severance and employee retention costs, (2) $2 million of termination charges related to certain license
agreements and (3) $1 million of additional charges related to the Merida manufacturing facility.
For Fiscal 2021 the estimated inventory markdown charges and manufacturing facility charges are included in
cost of goods sold in Lanier Apparel, while the charges for operating lease asset impairments, employee charges, and fixed
asset impairments are included in SG&A in Lanier Apparel. The gain on sale of the Toccoa, Georgia distribution center in
Fiscal 2021 is included in royalties and other income in Lanier Apparel. The $2 million gain on sale of the Merida
manufacturing facility in Mexico that was sold in the First Quarter of Fiscal 2023 is also included in royalties and other
income.
We do not expect to incur any additional Lanier Apparel exit charges. Substantially all of the cumulative accrued
employee charges, termination charges related to contractual commitments and charges related to the Merida
manufacturing facility have been paid. During Fiscal 2023, lease amounts totaling $2 million related to the Lanier Apparel
office leases that were previously impaired and vacated were paid, with no other anticipated significant future cash
requirements related to the Lanier Apparel business.
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SCHEDULE II
Oxford Industries, Inc.
Valuation and Qualifying Accounts
Column A
Description
Fiscal 2023
Deducted from asset accounts:
Accounts receivable reserves (1)
Provision for credit losses (2)
Fiscal 2022
Deducted from asset accounts:
Accounts receivable reserves (1)
Provision for credit losses (2)
Fiscal 2021
Deducted from asset accounts:
Accounts receivable reserves (1)
Provision for credit losses (2)
Column B
Balance at
Beginning
of Period
Column C
Additions
Charged to
Costs and
Expenses
Charged
to Other
Accounts–
Describe
(In thousands)
Column D
Column E
Deductions
–
Describe
Balance at
End of
Period
$
$
$
$
$
$
4,032
1,230
3,412
1,311
6,418
2,580
$
$
$
$
$
$
1,201
(382)
2,868
(262)
(1,140)
(1,190)
$
$
$
$
$
$
$
$
(2,592)(4) $
(348)(5) $
2,641
500
541 (3) $
200 (3) $
(2,789)(4) $
(19)(5) $
4,032
1,230
— $
— $
(1,866)(4) $
(79)(5) $
3,412
1,311
(1) Accounts receivable reserves includes estimated reserves for allowances, returns and discounts related to our
wholesale operations as discussed in our significant accounting policy disclosure for "Revenue Recognition and
Receivables" in Note 1 of our consolidated financial statements.
(2) Provision for credit losses consists of amounts reserved for our estimate of a wholesale customer’s inability to meet its
financial obligations as discussed in our significant accounting policy disclosure for "Revenue Recognition and
Receivables" in Note 1 of our consolidated financial statements.
(3) Addition due to the acquisition of Johnny Was in September 2022.
(4) Principally consists of amounts written off related to customer allowances, returns and discounts.
(5) Principally consists of accounts written off as uncollectible.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Oxford Industries, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Oxford Industries, Inc. (the Company) as of February 3,
2024 and January 28, 2023, the related consolidated statements of operations, comprehensive income, shareholders’ equity
and cash flows for each of the three years in the period ended February 3, 2024, and the related notes and financial
statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at February 3, 2024 and January 28, 2023, and the results of its operations and its cash flows for each of the three
years in the period ended February 3, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of February 3, 2024, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated April 1, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our
opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Table of Contents
Description of the
Matter
Valuation of Goodwill and Trademark Indefinite-lived Intangible Asset of the Johnny Was
Reporting Unit
As disclosed in Note 5 to the consolidated financial statements, in connection with the annual
impairment test, the Company recorded impairment charges of $99 million related to goodwill and
$12 million related to the trademark indefinite-lived intangible asset. As disclosed in Note 1 to the
consolidated financial statements, goodwill and indefinite-lived intangible assets are tested for
impairment at least annually on the first day of the fourth quarter or whenever changes in
circumstances may indicate the carrying amounts may not be recoverable. Subsequent to the
impairment charges recorded, the Company’s goodwill and trademark indefinite-lived intangible
asset balances for the Johnny Was reporting unit were $0 and $66 million, respectively, at February
3, 2024.
Auditing management’s goodwill and indefinite-lived intangible asset impairment tests for the
Johnny Was reporting unit was complex and highly judgmental due to the significant estimation
required to determine the fair values of the Johnny Was reporting unit and trademark indefinite-
lived intangible asset. In particular, the fair value estimate of the Johnny Was reporting unit for
purposes of assessing the amount of impairment was sensitive to significant assumptions such as
revenue growth rates, operating margin, and the discount rate. In addition, the fair value estimate of
the Johnny Was indefinite-lived intangible asset was sensitive to significant assumptions such as
royalty rates for the trademark, revenue growth rates, and discount rate. These significant
assumptions are affected by expectations about future market and economic conditions.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the
Company’s controls over the Johnny Was goodwill and indefinite-lived intangible asset impairment
processes. For example, we tested controls over management’s review of the significant
assumptions described above.
To test the estimated fair value of the Johnny Was reporting unit and trademark indefinite-lived
intangible asset, we performed audit procedures that included, among others, assessing
methodologies used by the Company, testing the significant assumptions discussed above, and
evaluating the completeness and accuracy of the underlying data used by the Company in its
analyses. For example, we compared the significant assumptions described above to current market
and economic trends; the assumptions used to value similar assets in acquisitions; historical results
of the business; and other guidelines used by companies in the same industry. We involved our
valuation specialists to assist in our evaluation of the Company's valuation methodology and certain
significant assumptions. In addition, we assessed the historical accuracy of management’s
prospective financial information and performed sensitivity analyses on significant assumptions to
evaluate the potential changes in the fair value of the Johnny Was reporting unit and trademark
indefinite-lived intangible asset that would result from changes in the assumptions. We also
recalculated the resulting impairment charges recorded by the Company.
We have served as the Company's auditor since 2002.
/s/ Ernst & Young, LLP
Atlanta, GA
April 1, 2024
109
Table of Contents
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our company, under the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, have evaluated the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal
financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures
were effective.
Changes in and Evaluation of Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting during the fourth quarter of Fiscal
2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
Report of Management on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). Our internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our consolidated financial statements for external purposes in accordance with accounting
principles generally accepted in the United States. Our internal control over financial reporting is supported by a program
of appropriate reviews by management, written policies and guidelines, careful selection and training of qualified
personnel, and a written code of conduct.
We assessed the effectiveness of our internal control over financial reporting as of February 3, 2024. In making
this assessment, management used the updated framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO") in Internal Control—Integrated Framework (2013). Based on this assessment, we
believe that our internal control over financial reporting was effective as of February 3, 2024.
Ernst & Young LLP, our independent registered public accounting firm, has audited our internal control over
financial reporting as of February 3, 2024, and its report thereon is included herein.
and
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
Chairman, Chief Executive Officer and
President
(Principal Executive Officer)
/s/ K. SCOTT GRASSMYER
K. Scott Grassmyer
Executive Vice President, Chief Financial Officer and Chief
Operating Officer
(Principal Financial Officer)
April 1, 2024
April 1, 2024
Limitations on the Effectiveness of Controls
Because of their inherent limitations, our disclosure controls and procedures and our internal controls over
financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future
periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. A control system, no matter how well designed and operated,
can provide only reasonable, not absolute, assurance that a control system’s objectives will be met.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Oxford Industries, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Oxford Industries, Inc.’s internal control over financial reporting as of February 3, 2024, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Oxford Industries, Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of February 3, 2024, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of Oxford Industries, Inc. as of February 3, 2024 and January 28, 2023,
the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of
the three years in the period ended February 3, 2024, and the related notes and financial statement schedule listed in the
Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) and our report dated April 1, 2024
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of
Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.
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Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Atlanta, Georgia
April 1, 2024
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Item 9B. Other Information
During the Fourth Quarter of Fiscal 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1
trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information required by this Item 10 of Part III will appear in our definitive proxy statement under the
headings "Corporate Governance and Board Matters—Directors," "Executive Officers," "Common Stock Ownership by
Management and Certain Beneficial Owners—Section 16(a) Beneficial Ownership Reporting Compliance," "Corporate
Governance and Board Matters—Website Information," "Additional Information—Submission of Director Candidates by
Shareholders," and "Corporate Governance and Board Matters—Board Meetings and Committees of our Board of
Directors," and is incorporated herein by reference.
Item 11. Executive Compensation
The information required by this Item 11 of Part III will appear in our definitive proxy statement under the
headings "Corporate Governance and Board Matters—Director Compensation," "Executive Compensation," "Nominating,
Compensation & Governance Committee Report" and "Compensation Committee Interlocks and Insider Participation" and
is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 of Part III will appear in our definitive proxy statement under the
headings "Equity Compensation Plan Information" and "Common Stock Ownership by Management and Certain
Beneficial Owners" and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 of Part III will appear in our definitive proxy statement under the
headings "Certain Relationships and Related Transactions" and "Corporate Governance and Board Matters—Director
Independence" and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
Our independent registered public accounting firm is Ernst & Young LLP, Atlanta, Georgia, Auditor Firm ID 42.
The information required by this Item 14 of Part III will appear in our definitive proxy statement under the
heading "Audit-Related Matters—Fees Paid to Independent Registered Public Accounting Firm" and "Audit-Related
Matters—Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors" and is
incorporated herein by reference.
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Item 15. Exhibits, Financial Statement Schedules
(a) 1. Financial Statements
PART IV
The following consolidated financial statements are included in Part II, Item 8 of this report:
● Consolidated Balance Sheets as of February 3, 2024 and January 28, 2023.
● Consolidated Statements of Operations for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
● Consolidated Statements of Comprehensive Income for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
● Consolidated Statements of Shareholders’ Equity for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
● Consolidated Statements of Cash Flows for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
● Notes to Consolidated Financial Statements for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
2. Financial Statement Schedules
● Schedule II—Valuation and Qualifying Accounts
All other schedules for which provisions are made in the applicable accounting regulation of the SEC are not
required under the related instructions or are inapplicable and, therefore, have been omitted.
(b) Exhibits
2.1
3.1
3.2
4.1
10.1
10.2
10.3
10.4
10.5
10.6
Unit Purchase Agreement, dated September 19, 2022 by and among JW Holdings, LLC, the sellers named
therein, Oxford Industries, Inc. and Endeavour Capital Fund VI, L.P. as sellers’ representative (filed as Exhibit
2.2 to the Company’s Form 8-K filed on September 19, 2022)
Restated Articles of Incorporation of Oxford Industries, Inc. (filed as Exhibit 3.1 to the Company’s Form 10-Q
for the fiscal quarter ended July 29, 2017)
Bylaws of Oxford Industries, Inc., as amended (filed as Exhibit 3.2 to the Company’s Form 8-K filed on
August 18, 2020)
Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit
4.1 to the Company’s Form 10-K for the fiscal year ended February 1, 2020)
Oxford Industries, Inc. Deferred Compensation Plan (as amended and restated effective June 13, 2012) (filed
as Exhibit 10.1 to the Company’s Form 10-Q for the fiscal quarter ended October 27, 2012)†
First Amendment to Oxford Industries, Inc. Deferred Compensation Plan dated July 1, 2016 (filed as Exhibit
10.3 to the Company’s Form 10-Q/A for the fiscal quarter ended on July 30, 2016)†
Second Amendment to Oxford Industries, Inc. Deferred Compensation Plan dated December 22, 2022†
(filed as Exhibit 10.9 to the Company’s Form 10-K filed on March 28, 2023)
Fourth Amended and Restated Pledge and Security Agreement, dated as of May 24, 2016, among Oxford
Industries, Inc.; Tommy Bahama Group, Inc.; the additional entities grantor thereto, as Grantors, and Truist
Bank f/k/a SunTrust Bank, as administrative agent (filed as Exhibit 10.2 to the Company’s Form 8-K filed on
May 24, 2016)
Form of Oxford Industries, Inc. Restricted Share Unit Award Agreement*
Second Amendment to Fourth Amended and Restated Credit Agreement, dated as of March 6, 2023, by and
among Oxford Industries, Inc., Tommy Bahama Group, Inc., the Persons party thereto from time to time as
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guarantors, the financial institutions party thereto from time to time as lenders, and Truist Bank, as
administrative agent (filed as Exhibit 99.1 to the Company’s Form 8-K filed on March 7, 2023)
Form of Oxford Industries, Inc. Restricted Stock Award Agreement (filed as Exhibit 10.1 to the Company’s
Form 8-K filed on June 29, 2020)†
Form of Oxford Industries, Inc. Performance-Based Restricted Share Unit Award Agreement (filed as Exhibit
10.2 to the Company’s Form 8-K filed on June 29, 2020)†
Oxford Industries, Inc. Amended and Restated Long-Term Stock Incentive Plan (filed as Exhibit 10.9 to the
Company’s Form 10-K filed on March 28, 2023)
Subsidiaries of Oxford Industries, Inc.*
Consent of Independent Registered Public Accounting Firm*
Power of Attorney*
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002*
10.7
10.8
10.9
21
23
24
31.1
31.2
32
97
Clawback Policy*
101INS XBRL Instance Document – the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL Document
101SCH XBRL Taxonomy Extension Schema Document
101CAL XBRL Taxonomy Extension Calculation Linkbase Document
101DEF XBRL Taxonomy Extension Definition Linkbase Document
101LAB XBRL Taxonomy Extension Label Linkbase Document
101PRE XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL Document
* Filed herewith
† Management contract or compensation plan or arrangement required to be filed as an exhibit to this form pursuant to
Item 15(b) of this report.
We agree to file upon request of the SEC a copy of all agreements evidencing long-term debt omitted from this
report pursuant to Item 601(b)(4)(iii) of Regulation S-K.
Item 16. Form 10-K Summary
None.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
SIGNATURES
Oxford Industries, Inc.
By:
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
Chairman, Chief Executive Officer and President
Date: April 1, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Capacity
Date
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
/s/ K. SCOTT GRASSMYER
K. Scott Grassmyer
Chairman of the Board of Directors,
Chief Executive Officer and President
(Principal Executive Officer)
Executive Vice President, Chief Financial Officer
and Chief Operating Officer
(Principal Financial Officer and Principal Accounting
Officer)
Helen Ballard
*
Virginia A. Hepner
*
John R. Holder
*
Stephen S. Lanier
*
Dennis M. Love
*
Milford W. McGuirt
*
Clarence H. Smith
*
Clyde C. Tuggle
*
E. Jenner Wood III
*
Carol B. Yancey
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
*By
/s/ SURAJ A. PALAKSHAPPA
Suraj A. Palakshappa
as Attorney-in-Fact
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April 1, 2024
April 1, 2024
OXFORD INDUSTRIES, INC.
RESTRICTED SHARE UNIT AWARD AGREEMENT
EXHIBIT 10.5
This Restricted Share Unit Award Agreement (this “Agreement”) is entered into as of ______
____, ____ (the “Effec ve Date”), by and between <
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