Oxford Industries Stock (OXM) Underperforming Into Earnings – What To Expect

Oxford Industries, Inc. (NYSE: OXM), the apparel conglomerate behind iconic brands like Tommy Bahama and Lilly Pulitzer, finds itself having a difficult year in markets. The OXM stock price is currently holding on tight above $40, down 48% year to date heading into today's earnings.

The next earnings report, scheduled after market close, will be crucial in determining whether the company can turn the tide. Analysts expect Oxford Industries to report earnings per share (EPS) of $1.18 for the upcoming quarter, a significant decline from $2.77 in the same period last year, reflecting a sharp year-over-year drop in profitability.

Revenue is projected to reach $406.12 million, representing a 3.28% decline compared to the prior year, as the company also faces headwinds in sales growth. These estimates indicate cautious sentiment around Oxford Industries' near-term performance.

The company's journey through fiscal 2025 has been marked by headwinds, leaving markets questioning whether OXM can regain its footing in an increasingly competitive and unpredictable market.

The immediate trigger for the stock's recent downward trajectory was the release of the second quarter fiscal 2025 results. While revenue remained relatively flat year-over-year at $419.9 million, it fell short of analyst expectations. More concerning was the significant drop in net income, a 21% decrease compared to the same quarter last year, landing at $40.6 million.

Earnings per share (EPS) also disappointed, coming in at $2.60, below the $3.31 reported in the prior year and missing analyst estimates by a noticeable 9.6%. This shortfall sent immediate ripples through the market, causing the stock to plummet nearly 14% in the immediate aftermath.

Several factors contributed to this underperformance. A key culprit was a contraction in profit margin, which declined from 12% to 9.7%. This squeeze was attributed to a confluence of pressures, including increased freight expenses, higher markdowns to clear inventory, and, most significantly, a $40 million hit from newly implemented U.S. tariffs.

The tariff impact far exceeded the company’s initial estimates, highlighting the unpredictable nature of the current global trade environment and its potential to significantly impact profitability.

The disappointing earnings and revised outlook have prompted a wave of analyst revisions. Citigroup downgraded its price target for OXM to $65.00 with a “sell” rating, signaling a lack of confidence in the company's near-term prospects. UBS Group also lowered its price target to $80.00, maintaining a “neutral” rating, suggesting a wait-and-see approach.

Even Telsey Advisory Group, while reaffirming a “market perform” rating, lowered its price target to $86.00. This broad-based downward revision reflects a growing consensus that OXM faces significant challenges in the coming quarters.

However, the market may be overreacting to a single quarter's disappointing results. Oxford Industries has a history of strong brand recognition and a loyal customer base. While tariffs and increased costs are undeniable challenges, the company has demonstrated resilience in the past.