Oxford Industries Earnings Preview: Q4 EPS Expected to Be 35.2% Higher

Oxford Industries

is scheduled to report its fourth-quarter fiscal 2011 results tomorrow, March 27, after the markets close. This leading apparel designer said that holiday sales accelerated throughout Christmas, both at stores and online, and that it managed to maintain a healthy gross margin at the same time. The questions is, what does that mean for sales and profits in the fourth quarter?

Analysts on average predict that Oxford will say that per-share earnings rose 35.2% to $0.54. That estimate has not changed in the past 60 days. But note that analysts have underestimated Oxford's EPS for more than eight quarters. Fourth-quarter revenue is forecast to have jumped 21.9% from the same period of last year to total $192.3 million. Looking back to the third quarter, the company said its net income fell 71.4% to $1.6 million, or earnings of $0.10 per share. The year-ago quarter included profit from a division since sold. Revenues increased 22.0% year over year to $170.3 million. Both numbers exceeded analysts' expectations. The company said its Tommy Bahama and Lilly Pulitzer brands attracted shoppers despite the weak economy, and that it will accelerate Lilly Pulitzer store openings to help drive sales in the future. For the full fiscal year, analysts expect to see earnings that are 20% higher year over year to $2.35 per share. That estimate has not changed over the past 60 days. Also, the analysts anticipate that revenue for the year will be up 24.5% to $751.6 million.

Oxford Industries is an international apparel design and marketing company with a diverse portfolio of owned and licensed brands. Its brands include Tommy Bahama, Lilly Pulitzer and Billy London. The company holds exclusive licenses to produce and sell certain product categories under the Kenneth Cole, Dockers and other labels. It also operates retail stores, restaurants and Internet websites. Oxford is headquartered in Atlanta, was founded in 1942, and now has a market cap of $798.8 million. Competitors include Perry Ellis

, PVH

and Ralph Lauren

. Perry Ellis posted lower Q4 EPS and said it will cut jobs and some brands this year. PVH is also scheduled to report earnings Tuesday, and analysts are looking for EPS to have grown 14.7% and sales 7.0% higher year over year. Ralph Lauren posted better-than-expected EPS for the most recent quarter and raised its fiscal year sales forecast.

and

During the three months that ended in January, Oxford Industries saw holiday sales accelerate through the shopping season both in its stores and online. Analyst Brean Murray Carret raised its price target on the stock, citing store expansion, inventory controls and improved margins.

Oxford Industries has a long-term earnings per share growth forecast of 15.0% and a dividend yield of 1.1%. The operating margin is higher than the industry average. Like PVH and Ralph Lauren, Oxford's P/E ratio is higher than the industry average. And short interest is 6.7% of the float. All five analysts polled who follow the stock recommend buying shares. Their mean price target on the shares is more than 9% higher than the current share price. The share price is more than 30% higher than six months ago, despite pulling back more than 6% in the past month. It has fallen below the 200-day moving average for the first time since early December. Over the past six months, the stock has outperformed the broader markets and competitors Perry Ellis and Ralph Lauren.