Good day ladies and gentlemen, and welcome to the Oxford’s First Quarter 2017 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the floor over to Ms. Anne Shoemaker for opening remarks and introductions. Anne Shoemaker Thank you Denise, and good afternoon everyone. Before we begin, I would like to remind participants that certain statements made on today’s call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K. We undertake no duty to update any forward-looking statements. During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of non-GAAP to GAAP financial measures in our press release issued earlier today and in our December 6, 2016 release, both of which are posted under the Investor Relations tab of our website, at oxfordinc.com. Please note that all financial results and outlook information discussed on this call, unless otherwise noted, are from continuing operation, and all per share amounts are on a diluted basis. As a reminder, the results from the Ben Sherman business are reflected as discontinued operations for all periods presented. Also, on April 19, 2016, the Company acquired Southern Tide representing two weeks of Oxford’s first quarter fiscal 2016. Please also note that fiscal 2017 which ends February 3, 2018 is a 53-week year. And now I’d like to introduce today’s call participants. With me today are Tom Chubb, Chairman and CEO; and Scott Grassmyer, CFO. Thank you for your attention. And now I’d like to turn the call over to Tom Chubb.

Good afternoon and thank you for joining us. On our call on March 23, I’ve spent a fair amount of time describing our view of the current retail environment, the trends we are seeing, and how they are impacting our industry and Oxford, we discussed the significant shift in consumer shopping patterns from brick and mortar to e-commerce fueled in large part by technological innovation and the rise of the digitally native millennial generation. We also discussed the rapid growth of the outlet, off-priced, and fast fashion channels of distribution as well as the impact of Amazon and its foray into fashion. And finally, we elaborated on the pressure on traditional channels as department stores struggle and no longer pull traffic to themselves or the malls they anchor. You only need to have been reading the headline since our last call to know that these trends are continuing and possibly even accelerating. I also pointed out that we believe Oxford with our portfolio of exciting brands and clean distribution is uniquely and well positioned to succeed. We believe our brands, Tommy Bahama, Lilly Pulitzer, and Southern Tide are very specific and definite in what they stand for and importantly they remain true to their brand message and their communications, the beautiful products they create, and where and how they choose to connect their products to their guests. Against this backdrop, I am pleased to report Oxford's very solid first quarter results. Our 6% sales increase reinforces the effectiveness of our strategy to manage a dynamic portfolio of brands. The increase in sales came from several different and important initiatives, including the addition of Southern Tide to our portfolio, sales associated with new full-priced retail stores, increased sales in our restaurants, and a 2% increase in comparable store sales. These increases…

Thanks Tom. I'd like to walk you through a selection of highlights from a consolidated results for the first quarter as well as our guidance for the second quarter and full year. Please refer to our press release issued earlier today for additional information. First quarter 2017 net sales increased 6% to 272 million. As Tom mentioned, Tommy Bahama had a very good quarter. Their 6% sales increase came from all channels of distribution, with a 5% increase in comparable store sales, incremental sales from additional full-priced retail stores, increased sales at restaurants and higher off-priced wholesale sales. Importantly, Tommy’s adjusted operating margin also improved year-over-year increasing to 110 basis points to 9.5%. Lilly Pulitzer reported a modest sales decrease of $1.4 million or 2%. As Tom mentioned the primary driver behind the sales decrease were lower wholesale sales as we continues to carefully manage this channel of distribution. Lilly Pulitzer operating margin remained very strong at 28%. Sales at Lanier Apparel were lower than last year, essentially in line with what we had planned for the first quarter. And last but certainly not least, was the sales contribution made in the quarter by Southern Tide, with good growth in their wholesale door count, Southern Tide contributed almost 13 million of sales in the quarter and adjusted operating margin of 17% in its historically strongest quarter of the year. Our consolidated adjusted operating income in the first quarter was 32 million compared to 33 million in the same period of the prior year. Adjusted EPS in the quarter was $1.12 compared to a $1.26 in the first quarter of 2016. As we mentioned in our call in March, our EPS in the first quarter was impacted by a meaningful increase in our effective tax rate. The higher rate of 41%…

[Operator Instructions] Our first question comes from Ed Yruma with KeyBanc Capital Markets.

Hi, this is Matt in for Ed. Thanks for taking our questions. You’ve introduced some new Tommy products with higher price points? Have you had any success there? Are these new customers or customers trading up?

Yes, we have had success there. The price points that we've been adding in the past are not entirely new to us, and I think it would generally be the same customer base that's just willing to pay more for a product that's got more.

And on Tommy women’s, obviously you took the write down last quarter to clean up inventory. How is the more focused assortment been performing and what's working, what hasn't and we just heard in the industry that dresses are outperforming pretty much everything else in women's versus last year. Can you comment on dresses at Tommy and Lilly and how you think you are positioned there for the rest of the year?

Yes. Well, first of all women's performed well during the quarter, it was men's performed well in Tommy, women's performed even better that was led by our swim category which is a particular strength of Tommy Bahama, and it did incredibly well during the quarter. But the rest of women's, the sportswear portion of the line including dresses did well also. We've always done a nice job in dresses at Tommy Bahama, and that continued this spring and I expect will continue through the balance of the year. And the same is really true at Lilly Pulitzer, I mean, Lilly is known for its dresses, always has been and I expect always will be.

Our next question comes from Corinna Van der Ghinst with Citi Research, go ahead.

I have a few questions from my end. Just first on the 2% decline at Lilly Pulitzer. First on the wholesale decline, you gave some interesting color on the brand this quarter. Could you give us a little bit more color on what's happening on the wholesale side, did you actually exit any doors in the quarter or really was it just a pullback in the shipments? And then also, it sounds like you are maintaining your topline guidance for the brand for the year, but should we expect the rest of the year to be impacted by this pullback that you guys are talking about?

Well, on the Lilly first quarter wholesale scenario that was really pretty much as planned, that was mostly within majors, so think department stores where the reduction came in, and we did exit a few doors as we always to. Door counts are always a little bit dynamic. They're not static with us and we add and subtract depending on performance and opportunity and that kind of thing, but the more important reduction in that wholesale sales to majors was really as a result of our letting them buy to their full priced selling plans and trying to avoid selling them merchandise that was just going to end up on an end-of-season clearance sale. So it’s about running a very well controlled full-priced high sell through quick turning business which is what we wanted to do. So the wholesale piece of Lilly’s performance for the quarter again was really pretty close to what we expected.

And that's mostly pronounced in the first quarter, the other quarters, some quarters would be up a little and some kind of flattish, so it’s primarily a first quarter issue.

And then, just my follow up on the Lilly question was just beyond the lack of opening price point items that you called out in the brick and mortar stores. Have you made the immediate adjustments that drove the improvement into May in the assortment or how quickly can those actually be adjusted?

Well, some of those - there were two things that we talked about, we talked about having less markdown inventory in store and that's something that can be adjusted really most immediately, and then the second thing or items where the initial price is really what we're talking about is items less than $50. So these are the things like water bottles, iPhone covers, make up bags, cups those type - sunglass straps, those types of little items that can be $18, $28, $38 price points like that. And on those that really will take us a little bit of time to have those back in the store, I think will have them in resort in more abundance than we’ve had, but Cori, obviously we've factored all that into the guidance.

Okay, and just to that point also, were there more promotional pressures on your direct-to-consumer business this quarter coming from the wholesale channel at all?

You mean directly or indirectly, in other words from people that are carrying our brands or just general marketplace condition?

Both I guess.

Well, I mean obviously from the - on the direct basis, people that carry our brands, the answer is not really and that's why we control our distribution and how much we sell these guys so tightly. On an indirect basis, yes, there is a lot of discounting going on in the marketplace, a tremendous amount. Some of it on an unsustainable basis as people are going out of business and liquidating, but that's clearly a headwind out there. All that said as we noted, we actually increased gross margin in both Tommy Bahama and Lilly Pulitzer during the quarter.

And then my second question is…

So when you look at our results, Cori, I think you have, you know, you got to take account of that. Tommy not only posted the results they did, but they enhanced their gross margin at the same time and that flowed through to operating margin. And in Lilly Pulitzer, while we did have a very modest sales decline, we fully hung on to our gross margin and still posted a 28% operating margin and then a lot of our other KPIs and goals that we set out to achieve during the quarter about being even less promotional than the very unpromotional Lilly that's always existed. We achieved, our customer account is up year over year, we're selling each customer more merchandise, so many, many positives. This is a very strong business and I think what you're seeing are signs of strength not really weakness there.

And then my second question was just, it looks like you raised the low end of your topline guidance for the year. Is that just due to Tommy and/or Southern Tide being better than you are expecting the last time we spoke with you?

I think it's really the result of them you know everything being on track and men our -- probably, our earlier forecast didn’t take full account of some of the inventory clearance that we’re doing. So you saw that Tommy's inventory number for the first quarter was way down and that was because they did a incredibly good job of getting after really clearing out pretty much any and all aged inventory that we have. Scott, anything to add.

Yeah. That’s right. I don’t think we fully baked in the liquidation sales as Tom mentioned and we did -- we made great progress in Q1 and I think by the time Q2 is over, we should -- all that inventory writedown at year end should be out the door.

And I would again draw your attention to the inventory and cash flow numbers because we think it's a very, very strong story in a marketplace that is admittedly a tough market, but we think we accomplished a lot in the quarter apart from just the sales and earnings.

Okay, great. And then the inventory did look extremely clean and you called out Tommy and Lanier. And you did mention that you feel comfortable with the inventories at Lilly, but could you give a little bit more color on why those inventories might look higher and also how you’re feeling about the inventory for all the brands in the wholesale channel right now?

Well, the inventories in Lilly, they are growing and they’ve got more stores than they did a year ago and the inventories are only up slightly.

And Lilly, it was about $1 million. So pretty insignificant considering the additional store count we have and as we mentioned, the flash sale, it would have been less promotional in our full priced stores in the first quarter and we will have a little bit more to clear in the flash sale. But nothing that we’re concerned about.

We’ll take our next question from Jeff Van Sinderen with B. Riley.

Great work at Tommy by the way, especially good to see the improvement in women's there. Just wanted to drill down a little bit more on the drivers for the Lilly comp store sales. Was it mostly weather do you think or was it mostly opening price point? And then are there any other things to consider about marketing or anything else that may have had an impact and any categories I guess that may have also swayed with the weather more such. Just trying to get a sense I guess how much was overall traffic. And then also thinking about Lilly for Q2, just wondering what sort of comp level we should be looking to, given the shift in the flash sale timing.

Yeah. So I think it's pretty straightforward in terms of the comp story in Q1 and Jeff, we did a couple of things that were all about making sure that we're maintaining the very pristine and pure nature of this brand. So we put less merchandise out at mark down, that was a very deliberate strategy and we had, as a result, less sales at markdown in stores during the quarter. Than as we mentioned, we also had a big reduction in the amount of opening price merchandise, especially in that under $50 category. And then to your question about marketing support, we did do a little bit less in the way of promotional type marketing support, particularly gift with purchase events. So we dialed those back a bit and as you know, those are a big part of the Lilly equation. We did less of that in the first quarter. We don't want to overdo the gift with purchase events and so as compared to the prior year, there were less of those and when you combine that and you're doing those things in the quarter in which the overall market traffic trends are not great and then they’re sort of exacerbated by a cold wet spring through most of our Lilly Pulitzer footprint, it just wasn't a great combination of factors and that led to a little bit of a comp store sales decline. We did comp up nicely in ecomm, but bricks and mortar were down a bit, but we think it’s a pretty straight forward and understandable scenario.

Okay. And then if we can maybe shift over to the restaurants, just wondering I guess, what you're seeing there? I know you said they were positive, anything -- I guess, any other color you could give us on Marlin Bar, how that might evolve for the future rollout? I think you're working on maybe a kind of a new concept that might have been a little bit more of a hybrid, maybe you can touch on that?

So restaurants were strong during the quarter. We were very pleased with the way they performed and the stores that are connected with the restaurant comped a little bit higher than the regular stores. So, our whole strategy of leveraging off those restaurants to help bring the brand to life, I think was successful in the quarter as it has been for a long time, but particularly in the first quarter of this year. And then the Marlin bar down in Coconut Point, Florida, continues to perform very well for us. We continue to be excited about that concept and we're taking what we're learning there and we're going to apply that really in any future restaurant as we do. So we've got a couple upcoming that won't be exactly like Coconut Point, but they will incorporate some of the -- some of the learnings that we've had there and then in the future, I expect we'll have some that looked even more like Coconut Point.

Okay, good. And then just, if I could squeeze one more in on Southern Tide, just wondering how we should think about the growth there, it seems to be progressing pretty well and then also how we should think about operating margin, which frankly was really strong based on what you're seeing.

Yes. So we're very happy with Southern Tide. Obviously, they're like everybody else. The market out there is tough, but they're performing very, very nicely. We're just now obviously entering our comp period, so quarters two through four will be comping against next year and we're expecting good growth and a good operating margin. I'll let Scott elaborate.

Yeah. We still, yes -- at the beginning of the year, we said a low teen operating margin. And the first quarter is the strongest operating margin for the initial spring shipments. So that 17 I don’t think will hold at quite that higher level, but we still expect Q2 through 4 some good year over year growth.

Our next question comes from Eric Beder with Wunderlich.

Good afternoon. Let me add my congratulations. Could you talk a little bit about, I know last conference call, you talked about a number of changes you were making in the Tommy Bahama outlet business to make it more competitive and more kind of better able to hold the pricing. Could you talk about what's happened there and [indiscernible] plan on doing to that part of the channel?

Well, a big part of that overall plan was to clear out a lot of sort of excess inventory that we had and we've really been focused on that in a lot of ad inventory drop that you saw in the first quarter and that Scott mentioned that we're going to see in the second quarter is really us getting rid of sort of the over inventory position that we had. So I think that’s the first step is doing, getting those inventory levels in line, so that outlet stores can function the way that they are supposed to function. So I think we’re on great path there. I think Scott and I feel good about that.

Great. And could you give us an update on what's going on with the international operations.

Yeah. We’re seeing nice comps in Japan, which is very encouraging. Yeah. The goal for this year was to take a couple of million on that loss. So we’re on track to do that. Hong Kong, we’re still operating that store and it does lose money. So hopefully, early next year, we’ll be able to exit that store. But right now, we’re on track with what we thought at the beginning of the year in Japan, getting better and we're -- we would still like to find a good partner.

Our next question comes from Andrew Burns with DA Davidson.

On the Live the Island Life catalog, given the success, how are you thinking about larger full brand catalogs as the marketing push going forward, perhaps more than one a year and on that, do you think that it was a store traffic driver for a sustained period or really just around mailing?

So Andrew, with respect to the first question, will we do it again? I think the answer is absolutely and I think we’re working on one for the December holiday selling period that will be similar in concept, I think in terms of being a broad sort of exposition of the brand and then I would guess although I don't know that we've nailed those down completely that our cadence on these will probably end up being sort of two a year, one in the spring and one in the holiday time period. But it's very exciting and then in terms of the impact it had, obviously it had a big impact around the time of the mailing, but we believe that it continued for quite a while and I'm not sure about we're done reaping the full benefit of that catalog, because I believe you’ve got a copy of it and it is the kind of thing that people are less inclined to throw away and maybe keep hanging around on the coffee table for a while and going back to it and so we're not sure that it’s fully burned off at this point.

Great. Thanks. And then on Lilly, could you, Scott, maybe clarify commentary on the flash sale. I think exiting last quarter, you were reporting that down year-over-year, but now it sounds a bit larger. Did I understand that correctly and is that primarily --?

That is correct. And the initial plan was that it was going to be kind of flattish to even down, just a little bit. Now, we're planning to be up a little bit and part of that is we did not put much on sale and we did comp negative in Q1. So there's a little bit more inventory. So those two things together, leaving the opportunity to have a bigger flash sale and that will be in Q3.

[Operator Instructions] We’ll take our next question from Pam Quintiliano with SunTrust.

So a quick one on Tommy. I know we have, there has been a lot of questions already on it, but just Hawaii, can you touch upon the performance in Hawaii and if you’re pleased with that and what’s going on tourism wise there and if you think that also benefited Japan. And then the women's business, are you attracting a new customer do you think there or is your existing customer just happier with the assortments and buying more.

On the Hawaii question, I think we were replaced with the way Hawaii performed during the quarter. They did their part to contribute to the success in the quarter and I think that the data would indicate that maybe the tourist situation is not fully recovered there, but it sure seems like they're more willing to spend a little money than maybe they were a year or 18 months ago. So Hawaii seems to be headed in the right direction. I think we talked about it on the last call or two, but we've definitely seen a connection between our Hawaiian operation and our efforts in Japan, particularly with the Waikiki store, which has gotten a lot of publicity in Japan and from Japanese media. So that's a positive as well. And then on the women's business, I believe that’s more about giving our existing female guest what she expects to have from Tommy Bahama. So we've always been strong in swim. We sort of doubled down on that for this spring and really did some things to try to drive the women's swim business and including the swim cabana that we put in the New York store that hopefully Pam you've seen at this point. And it worked and then from that, we also did very, very well in what I would call, easy to wear breezy sort of quintessentially Tommy Bahama styles. So, some, we had a linen shift that did extremely well. We had a number of little linen sort of jacket that did really well. There were styles that, a T-shirt dress or two that did really well and they were again easy to wear breezy things that are the type of items that come to mind I believe when somebody thinks about Tommy Bahama women’s.

That's very helpful. And then I guess just online, can you provide any additional color, I apologize if I missed this, just growth by concept, was it what you expected, were there any surprises and any updated thoughts on the ultimate penetration of online, especially just given what's going on overall in wholesale?

I think online, I don't think we were disappointed anywhere in the business with our results for the quarter. I think we met or exceeded our objectives in online. So we were very happy with that in terms of the long-term penetration of online, I'm not sure what the limit is. I think some in the industry have suggested that at some point, it might be a 50-50 proposition and that doesn’t seem crazy to me, but we've still got a ways to go before we get there.

And then just last question on [indiscernible]. We've heard a lot of commentary that the premium center seems to be doing better, but we've also heard from a few folks that there's more opportunity to get in some centers now, just with everything that's going on and all the disruption out there. As you think about your topical store growth, are you seeing any changes in the opportunity or any centers that you would then dying to get into, but couldn’t get the exact spot you wanted where there is some flexibility recently.

Well, I think the -- obviously with our small footprint of stores, 42, I think in Lilly Pulitzer at this point and I think we’ve got a 110 or so full priced domestic Tommy Bahama stores and so out of that, 152 only, half or less or really in all, so our exposure to malls is quite small. It's all in the very best malls and I think Tam overall, the best malls are still the best malls and they are the ones that people are still fighting to get into. So we're happy with the stores that we have, but I don't know that it's gotten a whole lot easier yet to get into the best malls.

Our next question comes from Danielle McCoy with Telsey Advisory Group. Please go ahead.

So in terms of Southern Tide, can you talk about some of the wholesale door growth you're seeing, is it new accounts or existing accounts and then on the retail side of things, can you talk about some of the learnings from the three initial signature stores and what gives you confidence to open more of those locations and how many there could possibly be over time? Thanks.

Okay. So on the wholesale door count growth, I mean some of it’s with existing customers that have multiple doors obviously. And then some of it is new doors. That's a little bit of both, but I think we're being very, very deliberate and strategic in the way that we’re growing the wholesale business and it's building up very nicely. We've got primarily an independent specialty store count base that we're filling in certain geographies where there's a good opportunity and a good fit with some of the very best department store operators in the country, but doing it in a very -- again deliberate and strategic way and building a very nice distribution network. Then on the signature stores, they obviously -- we've got three in place. There was once that was existed before we bought the brand. So I think it's been around about two years now. And then two that we've added since we've owned the brand and they're working -- they're still early stage, but they are working and we know this model really well and the combination of the fact that the store -- the ones we have are working and our familiarity with model and knowledge about the Southern Tide brand is why we believe that we're going forward. So as we mentioned, we've got three more signed up to open later this year and are continuing to work on additional opportunities.

And we’ll take our last question from Rick Patel with Needham & Company.

I have a question on e-commerce, so you have a very strong platform through Lilly and I think a lot of that stems from your social media efforts and your success in being able to really engage that customer. To what extent do the brand teams share best practices that can be applied to other concepts? I'm asking because I'm curious if there is opportunity for Tommy and Southern Tide to benefit from those best practices or if it's apples and oranges, given they target different customers.

Well, first of all, I would say that, yes, Lilly does have a very strong e-commerce platform, but I would say that and Tommy does also, I mean they are doing over $100 million on e-commerce and it's a very large and important part of their business and Southern tide, I think in 16 for the period that we owned them, it was 23% of their business. So they’ve all got strong e-commerce businesses and platforms as well as great teams that are the people that are behind them and running them. All that said, there is opportunity for them to learn from each other and it's not all one direction. They all have different things that they're doing that they're trying experimenting with et cetera. So there's a good deal of communicating and sharing that goes on amongst and between them. Some of that facilitated taught me or someone else in the corporate office and some of it on them in formal basis just between the folks running those businesses. So definitely a lot of opportunities there and definitely a good bit of that happens including a meeting this week where some of the folks from the different groups are getting together to compare notes.

And can you update us on your thoughts for acquisitions, I guess where does this fall on your list of priorities and given that we are in a rapidly changing retail landscape towards digital. As your thinking changed about the right type of concept that would be appropriate for your portfolio?

So we're as you know Rick I think since you've known us, we've always been looking for acquisitions, we fully digested the Southern Tide acquisition at this point from a management standpoint and from a financial standpoint we've almost paid for it with cash flow at this point. But even apart from that we've got the financial wherewithal to do acquisitions and we're looking all the time. In terms of the target, what our target might look like. I don't think it's changed drastically. It's still about having a highly differentiated and very specific and strong brand that’s at the top of the list and I think that’s if anything more important than it’s ever been before. So brands like Tommy, Lilly and Southern Tide are still the types of things that we're looking for.

With no more questions in the queue, I’ll turn the conference back over to Mr. Tom Chubb for any additional or closing remarks.

Thank you again for your time this afternoon everyone. We appreciate your interest and look forward to speaking to you again in August.

That does conclude today’s presentation. Thank you for your participation, you may now disconnect.