Two Steps Forward, One Step Back. Lilly Slows as TB Recovers. Reiterate Neutral.

Research evidence excerpt

Two Steps Forward, One Step Back. Lilly Slows as TB Recovers. Reiterate Neutral.

ing margin expands ~60 bps in 2026, followed by ~50 bps of leverage in 2027

Founded in 1942, and going public inEQUITY 1960, Oxford Industries is a leading

Upside Scenario: $50/sh branded apparel company that designs,

■ Revs are up LSD% YoY in 2026, followed by MSD% growth in 2027 sources, markets, and distributes

■ Gross margin expands 150+ bps YoY in 2026, as outsized DTC growth supports products from its portfolio of seven

expansion while the company is able to offset tariff headwinds to a greater degree distinct lifestyle brands: Tommy Bahama,

than initially expected Lilly Pulitzer, Southern Tide, JohnnyRESEARCH ■ SG&A leverages 20+ bps in 2026 on the stronger top line Was, The Beaufort Bonnet Company

■ Op margin expand 170+ bps in 2026 (TBBC), Duck Head, and Jack Rogers. The

■ EPS of ~$3.25 in '26. Applying a ~15x P/E multiple, slightly below recent highs but company distributes primarily through

relatively in-line with the peer group, implies a ~$50 fair value its own full-price stores, outlets, and

e-commerce websites, along with its

Tommy Bahama food and beverage Downside Scenario: $10/sh locations. The company also distributes

■ Revenue declines LSD% YoY in 2026 and is ~flat YoY in 2027 through the wholesale channel to various

■ Gross margin is up <50 bps YoY in 2026 as the consumer environment deteriorates specialty stores, department stores,

further and the promo environment remains elevated for longer, while tariff multi-branded e-commerce retailers, and

mitigation takes longer than expected and/or tariff rates are raised other retailers.

■ SG&A rate delevers 100+ bps in 2026 off the slower top line

■ Operating margin contracts 50+ bps in 2026

■ EPS of ~$1.60 in '26.