Oxford Industries (OXM)

Fashion conglomerate Oxford Industries (NYSE:OXM) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 4% year on year to $403.1 million. Next quarter’s revenue guidance of $302.5 million underwhelmed, coming in 2.1% below analysts’ estimates. Its non-GAAP profit of $1.26 per share was 6.8% above analysts’ consensus estimates.

Company Overview

The parent company of Tommy Bahama, Oxford Industries (NYSE:OXM) is a lifestyle fashion conglomerate with brands that embody outdoor happiness.

Thanks to social media and the internet, not only are styles changing more frequently today than in decades past but also consumers are shifting the way they buy their goods, favoring omnichannel and e-commerce experiences. Some apparel and accessories companies have made concerted efforts to adapt while those who are slower to move may fall behind.

Oxford Industries's primary competitors include PVH Corp (NYSE: PVH), Ralph Lauren (NYSE: RL), VF Corp (NYSE: VFC), Perry Ellis (NASDAQ: PERY), and Columbia Sportswear (NASDAQ: COLM).

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Oxford Industries grew its sales at a 10.9% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Oxford Industries’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.4% annually.

This quarter, Oxford Industries missed Wall Street’s estimates and reported a rather uninspiring 4% year-on-year revenue decline, generating $403.1 million of revenue. Company management is currently guiding for a 1.8% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 1.8% over the next 12 months. While this projection implies its newer products and services will fuel better top-line performance, it is still below average for the sector.

Oxford Industries’s operating margin has been trending up over the last 12 months and averaged 3.7% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for a consumer discretionary business.

This quarter, Oxford Industries generated an operating margin profit margin of 6.3%, down 6.2 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Oxford Industries’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q2, Oxford Industries reported adjusted EPS of $1.26, down from $2.77 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 6.8%. Over the next 12 months, Wall Street expects Oxford Industries’s full-year EPS of $4.34 to shrink by 19.7%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Oxford Industries has shown poor cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 4.4%, lousy for a consumer discretionary business.

Oxford Industries’s free cash flow clocked in at $52.31 million in Q2, equivalent to a 13% margin. This result was good as its margin was 1.7 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, causing temporary swings. Long-term trends are more important.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Oxford Industries’s management team makes decent investment decisions and generates value for shareholders. Its five-year average ROIC was 16.7%, slightly better than typical consumer discretionary business.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Oxford Industries’s ROIC has decreased significantly over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

Oxford Industries reported $6.88 million of cash and $513.4 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $154.1 million of EBITDA over the last 12 months, we view Oxford Industries’s 3.3× net-debt-to-EBITDA ratio as safe. We also see its $1.68 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was great to see Oxford Industries’s EPS top analysts’ expectations. We were also glad its full-year EPS guidance, which was reaffirmed, outperformed Wall Street’s estimates as well. On the other hand, the company's revenue missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. It seems like the market is willing to overlook topline weakness due to bottom-line strength. The stock traded up 12.3% to $45.40 immediately after reporting.

Updated: December 4, 2025 at 9:53 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Oxford Industries.

Oxford Industries doesn’t pass our quality test. To kick things off, its revenue growth was weak over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its astounding EPS growth over the last five years shows its profits are trickling down to shareholders, the downside is its same-store sales performance has disappointed. On top of that, its projected EPS for the next year is lacking.

Oxford Industries’s P/E ratio based on the next 12 months is 12.3x. This valuation multiple is fair, but we don’t have much confidence in the company. There are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $46 on the company (compared to the current share price of $39.77).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.