Oxford Industries Inc "Some Signs of Progress, but Topline Challenges..."

研报英文原文证据摘录

Oxford Industries Inc "Some Signs of Progress, but Topline Challenges..."

Oxford Industries Inc UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: How fast will the US apparel industry grow?

We anticipate the overall industry will rise at a 2% growth rate. Within channels, we expect Specialty

Retail sales will grow at a 1-2% annual pace. This channel will likely lose share against other channels

with a more appealing value proposition, such as Online Pureplays and Off-Price retailers.

Q: Can OXM deliver solid top-line growth in a competitive retail landscape?

Yes. We believe OXM's sales should benefit from its leverage to a relatively resilient high-income

customer. We model incremental revenues from retail footprint expansion and higher digital sales,

partially offset by weaker wholesale revenues to Department Stores partners. We estimate this should

lead to a 3% 5-yr. sales CAGR.

Q: Can OXM return to the operating margins achieved in FY21-22?

No. We see channel mix shift to a more profitable DTC channel as a gross margin driver. At the same

time, we anticipate SG&A deleverage given investments in store openings, distribution, marketing.

We estimate the combination of these factors should take OXM's operating margin to 5.0% by FY30,

well below 16.6% in FY22 and weaker vs. its pre-pandemic level of 8.8%.

UBS VIEW We rate OXM Neutral. We think OXM has a decent portfolio of lifestyle brands capable of delivering

LT sales and EPS growth. We expect OXM's earnings to gradually rebound, but see near-term

earnings pressure given tariff headwinds and SG&A deleverage. We model a 14% 5-yr. EPS CAGR,

which still implies long-term EPS below with pre-pandemic levels. We believe this type of growth