# Oxford Industries Inc: Form 10-Q for the period ended May 4, 2024

- Company: [Oxford Industries Inc](/companies/oxm.md) (CIK 75288)
- Form: 10-Q
- Filed: 2024-06-13
- Accepted by EDGAR: Jun 13, 2024, 13:32 ET
- Period: 2024-05-04
- Accession: 0000075288-24-000009
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/75288/000007528824000009/oxm-20240504x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/75288/000007528824000009/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-05-04.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-02-04 to 2024-05-04 | $398.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-02-04 to 2024-05-04 | $139.8m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-02-04 to 2024-05-04 | $258.4m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-02-04 to 2024-05-04 | $213.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-02-04 to 2024-05-04 | $52.5m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-02-04 to 2024-05-04 | $13.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-02-04 to 2024-05-04 | $38.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-02-04 to 2024-05-04 | $2.42 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-02-04 to 2024-05-04 | $2.46 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-02-04 to 2024-05-04 | 15,844,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-02-04 to 2024-05-04 | $32.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-02-04 to 2024-05-04 | $11.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2024-02-04 to 2024-05-04 | $10.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-05-04 | $7.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-05-04 | $298.4m | us-gaap:AssetsCurrent |
| Total assets | at 2024-05-04 | $1.16bn | us-gaap:Assets |
| Current liabilities | at 2024-05-04 | $225.6m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2024-05-04 | $18.6m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2024-05-04 | $592.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 60,221 characters.

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto contained in this report and the consolidated financial statements, notes to consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Fiscal 2023 Form 10-K.

### OVERVIEW

### Business Overview

We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers lifestyle brands.

Our business strategy is to drive excellence across a portfolio of lifestyle brands that create sustained, profitable growth. We consider lifestyle brands to be those brands that have a clearly defined and targeted point of view inspired by an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create an emotional connection can command greater loyalty and higher price points and create licensing opportunities. We believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products to consumers where and when they want them. We believe the principal competitive factors in the apparel industry are the reputation, value, and image of brand names; design of differentiated, innovative or otherwise compelling product; consumer preference; price; quality; marketing (including through rapidly shifting digital and social media vehicles); product fulfillment capabilities; and customer service. Our ability to compete successfully in the apparel industry is dependent on our proficiency in foreseeing changes and trends in fashion and consumer preference and presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to provide exciting, differentiated fashion products each season as well as certain core products that consumers expect from us.

During Fiscal 2023, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations. The remaining 20% of our net sales was generated through our wholesale distribution channels, which complement our direct to consumer operations and provide access to a larger base of consumers. Our wholesale operations consist of sales of products bearing the trademarks of our lifestyle brands to various specialty stores, better department stores, Signature Stores, multi-branded e-commerce retailers and other retailers.

For additional information about our business and our operating groups, see Part I, Item 1. Business of our Fiscal 2023 Form 10-K. Important factors relating to certain risks which could impact our business are described in Part I. Item 1A. Risk Factors of our Fiscal 2023 Form 10-K.

### Industry Overview

We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the apparel industry, and our competitors vary by operating group and distribution channel. The apparel industry is cyclical and very dependent on the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional, domestic and international economic conditions change. Also, in recent years consumers have chosen to spend less of their discretionary spending on certain product categories, including apparel, while spending more on services and other product categories. Further, negative economic conditions often have a longer and more severe impact on the apparel industry than on other industries due, in part, to apparel purchases often being more of a discretionary purchase.

This competitive and evolving environment requires that brands and retailers approach their operations, including marketing and advertising, very differently than they have historically and may result in increased operating costs and investments to generate growth or even maintain existing sales levels. While the competition and evolution present significant risks, especially for traditional retailers who fail or are unable to adapt, we believe it also presents a tremendous opportunity for brands and retailers to capitalize on the changing consumer environment.

The current macroenvironment, with heightened concerns about continuing inflationary trends, a global economic recession, geopolitical issues, the availability and cost of credit and elevated interest rates for prolonged periods has resulted in lower levels of consumer sentiment that has driven the consumer to become more cautious in her discretionary spending despite most other economic indicators remaining positive. These factors, when combined with heightened promotional activity in our industry, is creating a complex and challenging retail environment, which continues to impact our businesses and financial results during Fiscal 2024 and has exacerbated some of the inherent challenges to our operations and may continue to do so in the future. There remains significant uncertainty in the macroeconomic environment, and the impact of these and other factors could have a major effect on our businesses.

However, we believe our lifestyle brands have true competitive advantages, and we continue to invest in our brands’ direct to consumer initiatives and distribution capabilities while further leveraging technology to serve our consumers when and where they want to be served. We continue to believe that our lifestyle brands, with their strong emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various challenges facing our industry in the current environment.

### Key Operating Results:

The following table sets forth our consolidated operating results (in thousands, except per share amounts) for the First Quarter of Fiscal 2024 compared to the First Quarter of Fiscal 2023:

| ​ ​ ​ | ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ | ​ ​ Fiscal 2023 |
| --- | --- | ---: | --- | ---: |
| Net sales | ​ | $398,184 | ​ | $420,097 |
| Operating income | ​ | $52,451 | ​ | $80,301 |
| Net earnings | ​ | $38,373 | ​ | $58,538 |
| Net earnings per diluted share | ​ | $2.42 | ​ | $3.64 |
| Weighted average shares outstanding - diluted | ​ | 15,844 | ​ | 16,071 |

Net earnings per diluted share were $2.42 in the First Quarter of Fiscal 2024 compared to $3.64 in the First Quarter of Fiscal 2023. The 34% decrease in net earnings per diluted share was primarily due to a 34% decrease in net earnings. The decreased net earnings were primarily due to (1) lower operating income in each of our operating groups, (2) a higher operating loss at Corporate and Other and (3) a higher effective tax rate. These decreases were partially offset by decreased interest expense.

### COMPARABLE SALES

We often disclose comparable sales to provide additional information regarding changes in our results of operations between periods. Our disclosures of comparable sales include net sales from our full-price retail stores and e-commerce sites. We believe that the inclusion of both full-price retail stores and e-commerce sites in the comparable sales disclosures is a more meaningful way of reporting our comparable sales results, given similar inventory planning, allocation and return policies, as well as our cross-channel marketing and other initiatives for the direct to consumer channels. For our comparable sales disclosures, we exclude (1) outlet store sales as those clearance sales are used primarily to liquidate end of season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally occur at lower gross margins than our non-clearance direct to consumer sales, and (2) food and beverage sales, as we do not currently believe that the inclusion of food and beverage sales in our comparable sales disclosures is meaningful in assessing our branded apparel businesses. Historically, we also excluded from our comparable sales disclosures e-commerce flash clearance sales used to liquidate excess inventory; however, given the evolving cadence of marking down retail sales prices associated with our e-commerce operations, we are now including those sales for purposes of our comparable sales disclosures. Comparable sales information reflects net sales, including shipping and handling revenues, if any, associated with product sales.

For purposes of our disclosures, comparable sales consists of sales through e-commerce sites and any physical full-price retail stores that were owned and open as of the beginning of the prior fiscal year and which did not have during the relevant periods, and is not within the current fiscal year scheduled to have, (1) a remodel or other event which would result in a closure for an extended period of time (which we define as a period of two weeks or longer), (2) a greater than 15% change in the size of the retail space due to expansion, reduction or relocation to a new retail space or (3) a relocation to a new space that is significantly different from the prior retail space. For those stores which are excluded based on the preceding sentence, the stores continue to be excluded from comparable sales until the criteria for a new store is met subsequent to the remodel, relocation, or other event. A full-price retail store that is remodeled will generally continue to be included in our comparable sales metrics as a store is not typically closed for longer than a two-week period during a remodel; however, a full-price retail store that is relocated generally will not be included in our comparable sales metrics until that store has been open in the relocated space for the entirety of the prior fiscal year because the size or other characteristics of the store typically change significantly from the prior location. Any stores that were closed during the prior fiscal year or current fiscal year, or which we expect to close or vacate in the current fiscal year, as well as any pop-up or temporary store locations, are excluded from our comparable sales metrics.

Definitions and calculations of comparable sales differ among companies, and therefore comparable sales metrics disclosed by us may not be comparable to the metrics disclosed by other companies.

### DIRECT TO CONSUMER LOCATIONS

The table below provides information about the number of direct to consumer locations for our brands as of the dates specified. The amounts below include our permanent locations and exclude any pop-up or temporary store locations which have an initial lease term of 12 months or less.

| ​ ​ ​ | ​ ​ | ​ May 4, 2024 | ​ ​ | ​ February 3, 2024 | ​ ​ | ​ April 29, 2023 | ​ ​ | ​ January 28, 2023 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Tommy Bahama full-price retail stores |  | 102 |  | 102 |  | 103 |  | 103 |
| Tommy Bahama retail-food & beverage locations |  | 23 |  | 22 |  | 21 |  | 21 |
| Tommy Bahama outlets |  | 35 |  | 34 |  | 33 |  | 33 |
| Total Tommy Bahama locations |  | 160 |  | 158 |  | 157 |  | 157 |
| Lilly Pulitzer full-price retail stores |  | 60 |  | 60 |  | 59 |  | 59 |
| Johnny Was full-price retail stores | ​ | 75 | ​ | 72 | ​ | 65 | ​ | 65 |
| Johnny Was outlets | ​ | 3 | ​ | 3 | ​ | 2 | ​ | 2 |
| Total Johnny Was locations | ​ | 78 | ​ | 75 | ​ | 67 | ​ | 67 |
| Southern Tide full-price retail stores | ​ | 20 | ​ | 19 | ​ | 9 | ​ | 6 |
| TBBC full-price retail stores | ​ | 4 | ​ | 3 | ​ | 3 | ​ | 3 |
| Total Oxford direct to consumer locations |  | 322 |  | 315 |  | 295 |  | 292 |

### RESULTS OF OPERATIONS

### FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023

The discussion and tables below compare our statements of operations for the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023. Each dollar and percentage change provided reflects the change between these fiscal periods unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share amounts. We have calculated all percentages based on actual data, and percentage columns in tables may not add due to rounding. Individual line items of our consolidated statements of operations, including gross profit, may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company.

The following table sets forth the specified line items in our unaudited condensed consolidated statements of operations both in dollars (in thousands) and as a percentage of net sales as well as the dollar change and the percentage change as compared to the same period of the prior year. The table also includes net earnings per diluted share and diluted weighted average shares outstanding (in thousands), as well as the change and the percentage change for each of these items as compared to the same period of the prior year.

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ First Quarter Fiscal 2024 ​ ​ | ​ ​ | ​ ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Fiscal 2023 ​ ​ | ​ ​ | ​ ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ ​ $ Change ​ ​ | ​ ​ ​ | ​ ​ ​ % Change ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Net sales |  | $398,184 |  | 100.0% | ​ | $420,097 | ​ | 100.0% | ​ | $(21,913) |  | (5.2)% |
| Cost of goods sold | ​ | 139,823 |  | 35.1% | ​ | 144,968 |  | 34.5% | ​ | (5,145) |  | (3.5)% |
| **Gross profit** | ​ | $258,361 |  | 64.9% | ​ | $275,129 |  | 65.5% | ​ | $(16,768) |  | (6.1)% |
| SG&A | ​ | 213,103 |  | 53.5% | ​ | 203,149 |  | 48.4% | ​ | 9,954 |  | 4.9% |
| Royalties and other operating income | ​ | 7,193 |  | 1.8% | ​ | 8,321 |  | 2.0% | ​ | (1,128) |  | (13.6)% |
| **Operating income** | ​ | $52,451 |  | 13.2% | ​ | $80,301 |  | 19.1% | ​ | $(27,850) |  | (34.7)% |
| Interest expense, net | ​ | 874 |  | 0.2% | ​ | 2,342 |  | 0.6% | ​ | (1,468) |  | (62.7)% |
| **Earnings before income taxes** | ​ | $51,577 |  | 13.0% | ​ | $77,959 |  | 18.6% | ​ | $(26,382) |  | (33.8)% |
| Income tax expense | ​ | 13,204 |  | 3.3% | ​ | 19,421 |  | 4.6% | ​ | (6,217) |  | (32.0)% |
| **Net earnings** | ​ | $38,373 |  | 9.6% | ​ | $58,538 |  | 13.9% | ​ | $(20,165) |  | (34.4)% |
| **Net earnings per diluted share** | ​ | $2.42 | ​ | ​ ​ | ​ | $3.64 | ​ | ​ ​ | ​ | $(1.22) | ​ | (33.5)% |
| Weighted average shares outstanding - diluted | ​ | ​ 15,844 |  | ​ ​ | ​ | ​ 16,071 |  | ​ ​ | ​ | ​ (227) |  | (1.4)% |

### Net Sales

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ | ​ ​ Fiscal 2023 | ​ | ​ ​ ​ $ Change | ​ ​ ​ ​ ​ ​ % Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | ---: |
| Tommy Bahama | ​ | $225,617 | ​ | $239,435 | ​ | $(13,818) | (5.8)% |
| Lilly Pulitzer | ​ | 88,421 | ​ | 97,450 | ​ | (9,029) | (9.3)% |
| Johnny Was | ​ | ​ 51,212 | ​ | 49,491 | ​ | 1,721 | 3.5% |
| Emerging Brands | ​ | 33,001 | ​ | 33,991 | ​ | (990) | (2.9)% |
| Corporate and Other | ​ | (67) | ​ | (270) | ​ | 203 | NM% |
| **Consolidated net sales** | ​ | $398,184 | ​ | $420,097 | ​ | $(21,913) | (5.2)% |

Consolidated net sales were $398 million in the First Quarter of Fiscal 2024 compared to net sales of $420 million in the First Quarter of Fiscal 2023. The 5% decrease in net sales included decreased sales in Tommy Bahama, Lilly Pulitzer and Emerging Brands. These decreases were partially offset by increased sales in Johnny Was.

The changes in net sales by distribution channel consisted of the following:

- a decrease in wholesale sales of $17 million, or 16%, including (1) a $11 million decrease in Tommy Bahama, (2) a $3 million decrease in Emerging Brands, (3) a $2 million decrease in Lilly Pulitzer and (4) a $1 million decrease in Johnny Was;
- a decrease in e-commerce sales of $6 million, or 5%, including (1) a $5 million decrease in Lilly Pulitzer and (2) a $2 million decrease in Tommy Bahama. These decreases were partially offset by a $2 million increase in Johnny Was;
- a decrease in full-price retail sales of $3 million, or 2%, including (1) a $4 million decrease in Tommy Bahama and (2) a $2 million decrease in Lilly Pulitzer. These decreases were partially offset by (1) a $2 million increase in Emerging Brands as we continue to open new retail locations and (2) a $1 million increase in Johnny Was;
- an increase in food and beverage sales of $3 million, or 8%; and
- an increase in outlet sales of $1 million, or 6%, primarily driven by a $1 million increase in Tommy Bahama.

The following table presents the proportion of our consolidated net sales by distribution channel for each period presented. We have calculated all percentages below on actual data, and percentages may not add to 100 due to rounding.

| ​ ​ ​ ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ Fiscal 2023 ​ |
| --- | ---: | ---: |
| Retail | 39% | 37% |
| E-commerce | 30% | 30% |
| Food & beverage | 9% | 8% |
| Wholesale | 22% | 25% |
| **Total** | 100% | 100% |

#### Tommy Bahama:

Tommy Bahama net sales decreased $14 million, or 6%, in the First Quarter of Fiscal 2024, with a decrease in (1) wholesale sales of $11 million, or 20%, driven primarily by decreases in sales to off-price, department store, and specialty store wholesale customers, (2) full-price retail sales of $4 million, or 5%, and (3) e-commerce sales of $2 million, or 5%. These decreases were partially offset by an increase in (1) food and beverage sales of $3 million, or 8%, and (2) outlet sales of $1 million, or 4%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:

| ​ ​ ​ ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 |
| --- | ---: | ---: |
| Retail | 45% | 44% |
| E-commerce | 21% | 21% |
| Food & beverage | 15% | 13% |
| Wholesale | 19% | 22% |
| Total | 100% | 100% |

#### Lilly Pulitzer:

Lilly Pulitzer net sales decreased $9 million, or 9%, in the First Quarter of Fiscal 2024, with a decrease in (1) e-commerce sales of $5 million, or 11%, primarily resulting from a change in promotional activity with Lilly Pulitzer replacing a website-wide 30% off event in the First Quarter of 2023 with a smaller flash sale on select product with higher discounts in the First Quarter of Fiscal 2024, (2) retail sales of $2 million, or 6%, and (3) wholesale sales of $2 million, or 10%. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

| ​ ​ ​ ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 |
| --- | ---: | ---: |
| Retail | 35% | 34% |
| E-commerce | 46% | 47% |
| Wholesale | 19% | 19% |
| **Total** | 100% | 100% |

#### Johnny Was:

Johnny Was net sales increased $2 million, or 3%, in the First Quarter of Fiscal 2024, with an increase in (1) e-commerce sales of $2 million, or 11%, and (2) retail sales of $1 million, or 4%. These increases were partially offset by decreased wholesale sales of $1 million, or 10%. The following table presents the proportion of net sales by distribution channel for Johnny Was for each period presented:

| ​ ​ ​ ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 |
| --- | ---: | ---: |
| Retail | 37% | 36% |
| E-commerce | 40% | 38% |
| Wholesale | 23% | 26% |
| **Total** | 100% | 100% |

#### Emerging Brands:

Emerging Brands net sales decreased $1 million, or 3%, in the First Quarter of Fiscal 2024 due to lower off-price wholesale sales and lower promotional e-commerce sales at Southern Tide and TBBC. Off-price wholesale sales and promotional e-commerce sales were higher in in the First Quarter of Fiscal 2023 to liquidate previously marked down inventory. These decreases were partially offset by (1) sales in Jack Rogers, which was acquired in the Fourth Quarter of Fiscal 2023 and (2) increased sales in Duck Head. By distribution channel, the $1 million decrease included a decrease in wholesale sales of $3 million, or 15%. This decrease was partially offset by an increase in retail sales of $2 million, or 88%, as we opened new retail locations. The following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ |
| --- | --- | ---: | ---: |
| Retail | **​** | 15% | 7% |
| E-commerce |  | 36% | 36% |
| Wholesale |  | 49% | 57% |
| **Total** |  | 100% | 100% |

#### Corporate and Other:

Corporate and Other net sales primarily consist of the elimination of any sales between operating groups.

### Gross Profit

The tables below present gross profit by operating group and in total for the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, as well as the dollar change and percentage change between those two periods, and gross margin by operating group and in total. Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company.

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 | ​ ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ ​ % Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Tommy Bahama | ​ | $148,308 | ​ | $158,242 | ​ | $(9,934) |  | (6.3)% |
| Lilly Pulitzer | ​ | 59,279 | ​ | 68,296 | ​ | (9,017) |  | (13.2)% |
| Johnny Was | ​ | 33,249 | ​ | 33,588 | ​ | (339) |  | (1.0)% |
| Emerging Brands | ​ | 19,528 | ​ | 15,632 | ​ | 3,896 |  | 24.9% |
| Corporate and Other | ​ | (2,003) | ​ | (629) | ​ | (1,374) |  | NM% |
| **Consolidated gross profit** | ​ | $258,361 | ​ | $275,129 | ​ | $(16,768) |  | (6.1)% |
| **Notable items included in amounts above:** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| LIFO adjustments in Corporate and Other | ​ | $2,248 | ​ | $1,326 | ​ |  |  | ​ |

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 ​ | ​ ​ ​ Fiscal 2023 ​ |
| --- | --- | ---: | ---: |
| Tommy Bahama |  | 65.7% | 66.1% |
| Lilly Pulitzer |  | 67.0% | 70.1% |
| Johnny Was | ​ | 64.9% | 67.9% |
| Emerging Brands |  | 59.2% | 46.0% |
| Corporate and Other |  | NM% | NM% |
| **Consolidated gross margin** |  | 64.9% | 65.5% |

The decreased gross profit of 6% was primarily due to the 5% decrease in net sales. The decreased gross margin included (1) sales during promotional events representing a higher proportion of net sales at Tommy Bahama, Lilly Pulitzer and Johnny Was and (2) a $1 million higher LIFO accounting charge in the First Quarter of Fiscal 2024 compared to the First Quarter of Fiscal 2023. These decreases were partially offset by (1) higher gross margin in Emerging Brands driven by decreased promotional and off-price sales resulting from improved inventory levels and (2) a change in sales mix with wholesale sales representing a lower proportion of net sales.

#### Tommy Bahama:

The lower gross margin for Tommy Bahama was primarily due to sales during promotional events, including the semi-annual Friends & Family event, representing a higher proportion of net sales. This decrease was partially offset by (1) a change in sales mix with wholesale sales representing a lower proportion of net sales and (2) improved gross margin at food & beverage locations primarily resulting from higher menu prices.

#### Lilly Pulitzer:

The lower gross margin for Lilly Pulitzer was primarily due to (1) sales during promotional events, including the e-commerce flash clearance events, representing a higher proportion of net sales and (2) higher loyalty reward discounts driven by increased participation in Lilly Pulitzer’s loyalty program. These decreases were partially offset by a change in sales mix with off-price wholesale sales representing a lower proportion of wholesale sales.

#### Johnny Was:

The lower gross margin for Johnny Was was primarily due to efforts to reduce inventory in advance of the Fiscal 2024 movement of Johnny Was’ distribution center operations from Los Angeles, California to Lyons, Georgia resulting in (1) increased off-price wholesale sales and (2) increased promotional events. These decreases were partially offset by a change in sales mix with wholesale sales representing a lower proportion of net sales.

#### Emerging Brands:

The higher gross margin for Emerging Brands was primarily due to (1) improved inventory levels resulting in lower off-price wholesale sales and lower promotional e-commerce sales and (2) a change in sales mix with retail sales representing a larger proportion of net sales.

#### Corporate and Other:

The gross profit in Corporate and Other primarily reflects the impact of LIFO accounting adjustments, which was a $2 million charge in the First Quarter of Fiscal 2024 and a $1 million charge in the First Quarter of Fiscal 2023. The LIFO accounting impact in Corporate and Other in each period includes the net impact of (1) a charge in Corporate and Other when inventory that had been marked down in an operating group in a prior period was ultimately sold, (2) a credit in Corporate and Other when inventory had been marked down in an operating group in the current period, but had not been sold as of period end and (3) the change in the LIFO reserve, if any.

### SG&A

| ​ ​ ​ | ​ ​ | ​ ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | ---: | --- | --- | --- |
| SG&A | ​ | $213,103 ​ | $203,149 ​ | $9,954 |  | 4.9% |
| SG&A (as a % of net sales) | ​ | 53.5% | 48.4% |  |  | ​ |
| **Notable items included in amounts above:** | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ |
| Amortization of Johnny Was intangible assets | ​ | $2,718 ​ | $3,463 ​ | ​ ​ | ​ | ​ ​ |

SG&A was $213 million in the First Quarter of Fiscal 2024 compared to $203 million in the First Quarter of Fiscal 2023. The 5% increase in total SG&A in the First Quarter of Fiscal 2024 included the following: (1) increased employment costs of $4 million, primarily due to increased head count, pay rate increases and other employment cost increases, including in our direct to consumer and distribution center operations, partially offset by lower incentive compensation amounts, (2) a $3 million increase in depreciation expense, (3) a $2 million increase in occupancy expense, (4) a $1 million increase in software subscription and consulting expense and (5) a $1 million increase in advertising expense. These increases were partially offset by a $1 million decrease in amortization of intangible assets.

### Royalties and other operating income

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 | ​ ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | --- | ---: | --- | --- | --- | --- |
| Royalties and other operating income | ​ | $7,193 | ​ | $8,321 | ​ | $(1,128) |  | (13.6)% |
| **Notable items included in amounts above:** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Gain on sale of Merida manufacturing facility | ​ | $— | ​ | $(1,756) | ​ | ​ ​ | ​ | ​ ​ |

Royalties and other operating income typically consists primarily of income received from third parties from the licensing of our brands. The decreased royalties and other operating income was primarily due to the absence of a $2 million gain recorded in the First Quarter of 2023 on the sale of the Merida manufacturing facility in Mexico previously operated by our Lanier Apparel operating group, which we exited in Fiscal 2021. This decrease was partially offset by royalties received from the Tommy Bahama Miramonte Resort & Spa that was opened in the Third Quarter of Fiscal 2023.

### Operating income (loss)

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 | ​ ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Tommy Bahama | ​ | $42,639 | ​ | $55,521 | ​ | $(12,882) |  | (23.2)% |
| Lilly Pulitzer | ​ | 15,544 | ​ | 24,516 | ​ | (8,972) |  | (36.6)% |
| Johnny Was | ​ | ​ 333 | ​ | ​ 2,484 | ​ | ​ (2,151) |  | (86.6)% |
| Emerging Brands | ​ | 3,798 | ​ | 3,913 | ​ | (115) |  | (2.9)% |
| Corporate and Other | ​ | (9,863) | ​ | (6,133) | ​ | (3,730) |  | NM% |
| **Consolidated operating income** | ​ | $52,451 | ​ | $80,301 | ​ | $(27,850) |  | (34.7)% |
| **Notable items included in amounts above:** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| LIFO adjustments in Corporate and Other | ​ | $2,248 | ​ | $1,326 | ​ |  |  | ​ |
| Amortization of Johnny Was intangible assets | ​ | $2,718 | ​ | $3,463 | ​ | ​ ​ | ​ | ​ ​ |
| Gain on sale of Merida manufacturing facility | ​ | $— | ​ | $(1,756) | ​ | ​ ​ | ​ | ​ ​ |

Operating income was $52 million in the First Quarter of Fiscal 2024 compared to $80 million in the First Quarter of Fiscal 2023. The decreased operating income included (1) lower operating income in each of our operating groups and (2) a higher operating loss in Corporate and Other. Changes in operating income (loss) by operating group are discussed below.

#### Tommy Bahama:

| ​ ​ ​ | ​ ​ | ​ ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | ---: | ---: | --- | ---: |
| Net sales | ​ | $225,617 ​ | $239,435 ​ | $(13,818) |  | (5.8)% |
| Gross profit | ​ | $148,308 ​ | $158,242 ​ | $(9,934) | ​ | (6.3)% |
| Gross margin | ​ | 65.7% | 66.1% |  |  | ​ |
| Operating income | ​ | $42,639 ​ | $55,521 ​ | $(12,882) |  | (23.2)% |
| Operating income as % of net sales | ​ | 18.9% | 23.2% |  |  | ​ |

The decreased operating income for Tommy Bahama was due to (1) decreased net sales, (2) increased SG&A and (3) lower gross margin. The increased SG&A was primarily due to (1) $2 million in increased depreciation and (2) $1 million in increased occupancy expense, both driven primarily by the increase in brick and mortar locations and the conversion of full-price retail stores to Marlin Bar locations with retail and food & beverage operations.

#### Lilly Pulitzer:

| ​ ​ ​ | ​ ​ | ​ ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | ---: | ---: | --- | ---: |
| Net sales | ​ | $88,421 ​ | $97,450 ​ | $(9,029) |  | (9.3)% |
| Gross profit | ​ | $59,279 ​ | $68,296 ​ | $(9,017) | ​ | (13.2)% |
| Gross margin | ​ | 67.0% | 70.1% |  |  | ​ |
| Operating income | ​ | $15,544 ​ | $24,516 ​ | $(8,972) |  | (36.6)% |
| Operating income as % of net sales | ​ | 17.6% | 25.2% |  |  | ​ |

The decreased operating income for Lilly Pulitzer was due to (1) decreased net sales and (2) lower gross margin. SG&A was comparable in the First Quarter of 2024 and the First Quarter of 2023 with a $1 million decrease in advertising expense offset by a $1 million increase in depreciation.

#### Johnny Was:

| ​ ​ ​ | ​ ​ | ​ ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | ---: | ---: | --- | --- |
| Net sales | ​ | $51,212 ​ | $49,491 ​ | $1,721 |  | 3.5% |
| Gross profit | ​ | $33,249 ​ | $33,588 ​ | $(339) | ​ | (1.0)% |
| Gross margin | ​ | 64.9% | 67.9% |  |  | ​ |
| Operating income (loss) | ​ | $333 ​ | $2,484 ​ | $(2,151) |  | (86.6)% |
| Operating income (loss) as % of net sales | ​ | 0.7% | 5.0% |  |  | ​ |
| **Notable items included in amounts above:** | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ |
| Amortization of Johnny Was intangible assets | ​ | $2,718 ​ | $3,463 ​ | ​ ​ | ​ | ​ ​ |

The decreased operating income for Johnny Was was due to (1) increased SG&A and (2) lower gross margin. These decreases were partially offset by higher net sales. The increased SG&A was primarily due to higher SG&A associated with new retail store operations, including related employment costs, occupancy costs and administrative expenses. These increases were partially offset by $1 million in decreased amortization of acquired intangible assets.

#### Emerging Brands:

| ​ ​ ​ | ​ ​ | ​ ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | ---: | ---: | --- | ---: |
| Net sales | ​ | $33,001 ​ | $33,991 ​ | $(990) |  | (2.9)% |
| Gross profit | ​ | $19,528 ​ | $15,632 ​ | $3,896 | ​ | 24.9% |
| Gross margin | ​ | 59.2% | 46.0% |  |  | ​ |
| Operating income | ​ | $3,798 ​ | $3,913 ​ | $(115) |  | (2.9)% |
| Operating income as % of net sales | ​ | 11.5% | 11.5% |  |  | ​ |
| ​ | ​ | ​ ​ ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ |

The decreased operating income for Emerging Brands was primarily due to (1) increased SG&A and (2) lower net sales. These decreases were partially offset by higher gross margin. The increased SG&A included (1) higher SG&A associated with new retail store operations, including related employment costs, occupancy costs and administrative expenses and (2) higher advertising expense.

#### Corporate and Other:

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 | ​ ​ | ​ ​ ​ ​ $ Change | ​ ​ | ​ ​ ​ % Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | --- |
| Net sales | ​ | $(67) | ​ | $(270) | ​ | $203 |  | NM% |
| Gross profit | ​ | $(2,003) | ​ | $(629) | ​ | $(1,374) | ​ | NM% |
| Operating loss | ​ | $(9,863) | ​ | $(6,133) | ​ | $(3,730) |  | NM% |
| **Notable items included in amounts above:** | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| LIFO adjustments in Corporate and Other | ​ | $2,248 | ​ | $1,326 | ​ | ​ ​ | ​ | ​ ​ |
| Gain on sale of Merida manufacturing facility | ​ | $— | ​ | $(1,756) | ​ | ​ ​ | ​ | ​ ​ |

The increased operating loss in Corporate and Other was primarily a result of (1) the absence of a $2 million gain on the sale of the Merida manufacturing facility in Mexico that was recognized in the First Quarter of Fiscal 2023 and (2) higher SG&A primarily from $1 million of higher employment expense.

### Interest expense, net

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 | ​ ​ | ​ ​ ​ ​ $ Change | ​ ​ ​ ​ ​ % Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | ---: |
| Interest expense, net | ​ | $874 | ​ | $2,342 | ​ | $(1,468) | (62.7)% |

The decreased interest expense in the First Quarter of Fiscal 2024 was primarily due to a lower average outstanding debt balance during the First Quarter of Fiscal 2024 than the First Quarter of Fiscal 2023.

### Income tax

| ​ ​ ​ | ​ ​ | ​ ​ ​ First Quarter Fiscal 2024 | ​ ​ ​ Fiscal 2023 ​ | ​ ​ ​ ​ $ Change | ​ ​ ​ ​ ​ % Change ​ |
| --- | --- | ---: | ---: | ---: | ---: |
| Income tax expense | ​ | $13,204 ​ | $19,421 ​ | $(6,217) | (32.0)% |
| Effective tax rate | ​ | 25.6% | 24.9% |  | ​ |

For the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023 our effective income tax rate was 25.6% and 24.9%, respectively. The increase in our effective tax rate was driven primarily by the remeasurement of deferred tax assets and an increase to uncertain tax positions partially offset by a favorable return-to provision adjustment for a foreign subsidiary.

### Net earnings

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 |
| --- | --- | ---: | --- | ---: |
| Net sales | ​ | $398,184 | ​ | $420,097 |
| Operating income | ​ | $52,451 | ​ | $80,301 |
| Net earnings | ​ | $38,373 | ​ | $58,538 |
| Net earnings per diluted share | ​ | $2.42 | ​ | $3.64 |
| Weighted average shares outstanding - diluted | ​ | 15,844 | ​ | 16,071 |

Net earnings per diluted share were $2.42 in the First Quarter of Fiscal 2024 compared to $3.64 in the First Quarter of Fiscal 2023 reflecting (1) decreased net sales, (2) increased SG&A, (3) decreased gross margin, (4) decreased royalties and other operating income and (5) an increased effective income tax rate. These decreases were partially offset by (1) decreased interest expense and (2) share repurchases during Fiscal 2023.

### FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Our primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of branded apparel products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers lifestyle brands. We primarily distribute our products to our customers via direct to consumer channels of distribution, but we also distribute our products via wholesale channels of distribution.

Our primary uses of cash flow include the purchase of our branded apparel products from third party suppliers located outside of the United States, as well as operating expenses, including employee compensation and benefits, operating lease commitments and other occupancy-related costs, marketing and advertising costs, information technology costs, variable expenses, distribution costs, other general and administrative expenses and the periodic payment of interest. Additionally, we use our cash to fund capital expenditures and other investing activities, dividends, share repurchases and repayment of indebtedness, if any. In the ordinary course of business, we maintain certain levels of inventory, extend credit to our wholesale customers and pay our operating expenses. Thus, we require a certain amount of ongoing working capital to operate our business. Our need for working capital is typically seasonal with the greatest working capital requirements to support our larger spring, summer and holiday direct to consumer seasons. Our capital needs depend on many factors including the results of our operations and cash flows, anticipated growth rates, the need to finance inventory levels and the success of our various products.

We have a long history of generating sufficient cash flows from operations to satisfy our cash requirements for our ongoing capital expenditure needs as well as payment of dividends and repayment of our debt. Thus, we believe our anticipated future cash flows from operating activities will provide (1) sufficient cash over both the short and long term to satisfy our ongoing operating cash requirements, (2) ample funds to continue to invest in our businesses, (3) additional cash flow to repay outstanding debt and (4) sufficient cash for other strategic initiatives. Also, if cash inflows are less than cash outflows, we have access to amounts under our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”), subject to its terms, which is described below.

### Working Capital

*($ in thousands)*

| ​ ​ | ​ ​ | ​ ​ May 4, 2024 | ​ ​ | ​ ​ February 3, 2024 | ​ ​ | ​ ​ April 29, 2023 | ​ ​ | ​ ​ January 28, 2023 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Total current assets | ​ | $298,363 | ​ | $293,115 | ​ | $327,704 | ​ | $330,463 |
| Total current liabilities | ​ | $225,585 | ​ | $240,644 | ​ | $242,046 | ​ | $269,639 |
| Working capital | ​ | $72,778 | ​ | $52,471 | ​ | $85,658 | ​ | $60,824 |
| Working capital ratio | ​ | 1.32 | ​ | 1.22 | ​ | 1.35 | ​ | 1.23 |

Our working capital ratio is calculated by dividing total current assets by total current liabilities. Current assets as of May 4, 2024, decreased from April 29, 2023, primarily due to (1) decreased inventories of $35 million and (2) decreased cash and cash equivalents of $2 million. These decreases were partially offset by (1) increased receivables of $6 million and (2) increased prepaid expenses and other current assets of $2 million. Current liabilities as of May 4, 2024, decreased from April 29, 2023 primarily due to (1) decreased taxes payable of $12 million due to timing and decreased net earnings and (2) decreased accrued compensation of $5 million due to the timing of payments.

### Balance Sheet

The following tables set forth certain information included in our consolidated balance sheets (in thousands). Below each table are explanations for any significant changes in the balances as of May 4, 2024 as compared to April 29, 2023.

#### Current Assets:

| ​ ​ ​ | ​ ​ | ​ ​ May 4, 2024 | ​ ​ | ​ ​ February 3, 2024 | ​ ​ | ​ ​ April 29, 2023 | ​ ​ | ​ ​ January 28, 2023 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Cash and cash equivalents | ​ | $7,657 | ​ | $7,604 | ​ | $9,712 | ​ | $8,826 |
| Receivables, net | ​ | 87,918 | ​ | 63,362 | ​ | 81,483 | ​ | 43,986 |
| Inventories, net | ​ | 144,373 | ​ | 159,565 | ​ | 179,608 | ​ | 220,138 |
| Income tax receivable | ​ | ​ 19,437 | ​ | ​ 19,549 | ​ | ​ 19,442 | ​ | ​ 19,440 |
| Prepaid expenses and other current assets | ​ | 38,978 | ​ | 43,035 | ​ | 37,459 | ​ | 38,073 |
| Total current assets | ​ | $298,363 | ​ | $293,115 | ​ | $327,704 | ​ | $330,463 |

Cash and cash equivalents were $8 million as of May 4, 2024, compared to $10 million as of April 29, 2023. The cash and cash equivalents balance as of May 4, 2024 represents typical cash amounts maintained on an ongoing basis in our operations, which generally ranges from $5 million to $10 million at any given time. Any excess cash is generally used to repay amounts outstanding under our U.S. Revolving Credit Agreement.

The increased receivables, net as of May 4, 2024, was primarily due to (1) increased tenant improvement allowance receivables due from landlords resulting from our increased store openings during Fiscal 2023 and Fiscal 2024 and (2) an insurance claim filed as a result of the wildfire on the island of Maui that destroyed the Tommy Bahama Marlin Bar in Lahaina, Hawaii in the Third Quarter of Fiscal 2023. These increases were partially offset by lower wholesale trade receivables primarily resulting from lower wholesale sales in all operating groups in the First Quarter of Fiscal 2024 compared to the First Quarter of Fiscal 2023.

Inventories, net, included a $84 million and $76 million LIFO reserve as of May 4, 2024, and April 29, 2023, respectively. Inventories decreased in all operating groups except for Johnny Was primarily due to continued initiatives to closely manage inventory purchases and reduce on-hand inventory levels. We believe that inventory levels in all operating groups are appropriate to support anticipated sales plans.

#### Non-current Assets:

| ​ ​ ​ | ​ ​ | ​ ​ May 4, 2024 | ​ ​ | ​ ​ February 3, 2024 | ​ ​ | ​ ​ April 29, 2023 | ​ ​ | ​ ​ January 28, 2023 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Property and equipment, net | ​ | $193,702 | ​ | $195,137 | ​ | $181,601 | ​ | $177,584 |
| Intangible assets, net | ​ | 259,147 | ​ | 262,101 | ​ | 280,785 | ​ | 283,845 |
| Goodwill | ​ | 27,185 | ​ | 27,190 | ​ | 122,056 | ​ | 120,498 |
| Operating lease assets | ​ | ​ 319,308 | ​ | ​ 263,934 | ​ | ​ 245,099 | ​ | ​ 240,690 |
| Other assets, net | ​ | ​ 41,183 | ​ | ​ 32,188 | ​ | ​ 33,637 | ​ | ​ 32,209 |
| Deferred income taxes | ​ | 18,088 | ​ | 24,179 | ​ | 3,348 | ​ | 3,376 |
| Total non-current assets | ​ | $858,613 | ​ | $804,729 | ​ | $866,526 | ​ | $858,202 |

Property and equipment, net as of May 4, 2024, increased primarily due to the capital expenditures exceeding depreciation during the 12 months ended May 4, 2024.

The decrease in goodwill and intangible assets, net as of May 4, 2024, was primarily due to the $99 million and $12 million goodwill and intangible assets, net, impairment charges recorded in Johnny Was during the Fourth Quarter of Fiscal 2023, respectively, as disclosed in Note 5 of our Fiscal 2023 Form 10-K. Intangible assets, net as of May 4, 2024, further decreased due to the amortization of intangible assets acquired in the acquisition of Johnny Was. The decrease in goodwill resulting from the Johnny Was impairment charge was partially offset by (1) the acquisition of Jack Rogers in the Fourth Quarter of Fiscal 2023, (2) the acquisition of three former Southern Tide signature stores in the Fourth Quarter of Fiscal 2023 and (3) measurement period adjustments recorded in Fiscal 2023 related to the acquisition of Johnny Was.

Operating lease assets as of May 4, 2024, increased primarily due to the addition of new leased locations, or the extension of existing leased locations, exceeding the recognition of amortization related to existing operating leases and the termination or reduced term of certain operating leases.

The increase in other assets, net as of May 4, 2024, was primarily due to an increase in capitalizable implementation costs associated with cloud computing arrangements.

Deferred income taxes increased as of May 4, 2024, due primarily to the impairment of the Johnny Was goodwill and intangible asset balances in the Fourth Quarter of Fiscal 2023 that resulted in a change from a net deferred income tax liability position to a net deferred income tax asset position.

#### Liabilities:

| ​ ​ ​ | ​ ​ | ​ ​ May 4, 2024 | ​ ​ | ​ ​ February 3, 2024 | ​ ​ | ​ ​ April 29, 2023 | ​ ​ | ​ ​ January 28, 2023 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Total current liabilities | ​ | $225,585 | ​ | $240,644 | ​ | $242,046 | ​ | $269,639 |
| Long-term debt | ​ | 18,630 | ​ | 29,304 | ​ | 94,306 | ​ | 119,011 |
| Non-current portion of operating lease liabilities | ​ | 296,080 | ​ | 243,703 | ​ | 223,167 | ​ | 220,709 |
| Other non-current liabilities | ​ | 23,806 | ​ | 23,279 | ​ | 19,561 | ​ | 20,055 |
| Deferred income taxes | ​ | ​ — | ​ | ​ — | ​ | ​ 7,725 | ​ | ​ 2,981 |
| Total liabilities | ​ | $564,101 | ​ | $536,930 | ​ | $586,805 | ​ | $632,395 |

Current liabilities decreased as of May 4, 2024, primarily due to decreased taxes payable due to timing and decreased net earnings and (2) decreased accrued compensation due to the timing of payments. The reduction in long-term debt was the result of continuing initiatives to pay down our long-term debt balance.

The non-current portion of operating lease liabilities increased as of May 4, 2024, due to the addition of new leased locations, or the extension of existing leased locations, exceeding the payments related to existing operating leases and the termination or reduced term of certain operating leases.

Deferred income taxes decreased as of May 4, 2024, due primarily to the impairment of the Johnny Was goodwill and intangible asset balances that resulted in a change from a net deferred income tax liability position to a net deferred income tax asset position.

### Statement of Cash Flows

The following table sets forth the net cash flows for the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023 (in thousands):

| ​ ​ ​ | ​ ​ | ​ ​ First Quarter Fiscal 2024 | ​ | ​ ​ Fiscal 2023 |
| --- | --- | ---: | --- | ---: |
| Cash provided by operating activities | ​ | $32,923 | ​ | $52,557 |
| Cash used in investing activities | ​ | (12,134) | ​ | (15,534) |
| Cash used in financing activities | ​ | (20,710) | ​ | (36,114) |
| Net change in cash and cash equivalents | ​ | $79 | ​ | $909 |

Changes in cash flows in the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023 related to operating activities, investing activities and financing activities are discussed below.

#### Operating Activities:

In the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, operating activities provided $33 million and $53 million of cash, respectively. The cash flow from operating activities for each period primarily consisted of net earnings for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization of intangible assets, equity-based compensation, gain on sale of assets, and other non-cash items as well as the net impact of changes in deferred income taxes and operating assets and liabilities.

In the First Quarter of Fiscal 2024, the net change in operating assets and liabilities was primarily due to an increase in receivables and a decrease in current liabilities and other balance sheet changes that decreased cash flow from operations, partially offset by a decrease in inventories that increased cash flow from operations. In the First Quarter of Fiscal 2023, the net change in operating assets and liabilities was primarily due to an increase in receivables and a decrease in current liabilities that decreased cash flow from operations, partially offset by a decrease in inventories that increased cash flow from operations.

#### Investing Activities:

In the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, investing activities used $12 million and $16 million of cash, respectively. On an ongoing basis, our cash flow used in investing activities primarily consists of our capital expenditures, which totaled $12 million and $17 million in the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, respectively. During the First Quarter of Fiscal 2023, we also received $2 million from the sale of the Merida manufacturing facility in Mexico and acquired three former Southern Tide Signature Stores.

#### Financing Activities:

In the First Quarter of Fiscal 2024 and the First Quarter of Fiscal 2023, financing activities used $21 million and $36 million of cash, respectively. In the First Quarter of Fiscal 2024, we paid $11 million in dividends. In the First Quarter of Fiscal 2023, we paid $10 million in dividends and $2 million in deferred financing costs associated with the amendment of the U.S. Revolving Credit Agreement.

If net cash requirements are less than our net cash flows, we may repay amounts outstanding on our U.S. Revolving Credit Agreement, if any, consistent with our net repayment of $11 million of long-term debt in the First Quarter of Fiscal 2024. Alternatively, to the extent we are in a net debt position, and our net cash requirements exceed our net cash flows, we may borrow amounts from our U.S. Revolving Credit Agreement.

### Liquidity and Capital Resources

We have a long history of generating sufficient cash flows from operations to satisfy our cash requirements for our ongoing capital expenditure needs as well as payment of dividends and repayment of our debt. Thus, we believe our anticipated future cash flows from operating activities will provide (1) sufficient cash over both the short and long term to satisfy our ongoing operating cash requirements, (2) funds to complete our multi-year project to build a new distribution center in Lyons, Georgia to enhance the direct to consumer throughput capabilities of our brands, (3) funds to continue to invest in our businesses, including direct to consumer initiatives and information technology projects, (4) additional cash flow to repay outstanding debt and (5) sufficient cash for other strategic initiatives.

To the extent cash flow needs, for acquisitions or otherwise, in the future exceed cash flow provided by our operations, we will have access, subject to its terms, to our $325 million U.S. Revolving Credit Agreement to provide funding for operating activities, capital expenditures and acquisitions, if any, and any other investing or financing activities. The U.S. Revolving Credit Agreement was amended in Fiscal 2023, and the maturity of the facility extended to March 2028 as disclosed in Note 6 of our Fiscal 2023 Form 10-K.

We issue standby letters of credit under the U.S. Revolving Credit Agreement. Outstanding letters of credit under the U.S. Revolving Credit Agreement reduce the amount of borrowings available to us when issued and, as of May 4, 2024, February 3, 2024, and April 29, 2023, totaled $5 million, $5 million and $7 million, respectively.

As of May 4, 2024, February 3, 2024, and April 29, 2023, we had $19 million, $29 million, and $94 million of borrowings outstanding and $301 million, $288 million, and $224 million in unused availability under the U.S. Revolving Credit Agreement, respectively.

Our cash, short-term investments and debt levels in future periods may not be comparable to historical amounts as we continue to assess, and possibly make changes to, our capital structure, including borrowings from additional credit facilities, sales of debt or equity securities or the repurchase of shares of our stock in the future. Changes in our capital structure, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

#### Compliance with Covenants

The U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of financial information, compliance with law, maintenance of property, insurance requirements and conduct of business. Also, the U.S. Revolving Credit Agreement is subject to certain negative covenants or other restrictions including, among other things, limitations on our ability to (1) incur debt, (2) guaranty certain obligations, (3) incur liens, (4) pay dividends to shareholders, (5) repurchase shares of our common stock, (6) make investments, (7) sell assets or stock of subsidiaries, (8) acquire assets or businesses, (9) merge or consolidate with other companies or (10) prepay, retire, repurchase or redeem debt.

Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10% of availability. In such case, our fixed charge coverage ratio as defined in the U.S. Revolving Credit Agreement must not be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered. This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit Agreement of more than the greater of (1) $23.5 million or (2) 10% of availability for 30 consecutive days.

We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the U.S. Revolving Credit Agreement are customary for those included in similar facilities entered into at the time we amended the U.S. Revolving Credit Agreement. During Fiscal 2024 and as of May 4, 2024, no financial covenant testing was required pursuant to the U.S. Revolving Credit Agreement, as the minimum availability threshold was met at all times. As of May 4, 2024, we were compliant with all applicable covenants related to the U.S. Revolving Credit Agreement.

#### Operating Lease Commitments:

Refer to Note 4 in our unaudited condensed consolidated financial statements included in this report for additional information about our operating lease commitments as of May 4, 2024.

#### Dividends:

On June 11, 2024, our Board of Directors approved a cash dividend of $0.67 per share payable on August 2, 2024 to shareholders of record as of the close of business on July 19, 2024. Although we have paid dividends each quarter since we became a public company in July 1960, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt instruments or applicable law limit our ability to pay dividends. We may borrow to fund dividends or repurchase shares in the short term subject to the terms and conditions of our credit facility, other debt instruments and applicable law. All cash flow from operations will not be paid out as dividends.

#### Capital Expenditures:

We anticipate capital expenditures for Fiscal 2024, including the $12 million incurred in the First Quarter of Fiscal 2024, to be approximately $170 million, as compared to $74 million for Fiscal 2023. The planned increase in capital expenditures includes approximately $90 million of spend associated with a multi-year project to build a new distribution center in Lyons, Georgia to ensure best-in-class direct to consumer throughput capabilities for our brands. Additionally, we plan to invest in new brick and mortar locations, relocations and remodels of existing locations resulting in a year-over-year net increase of full price stores of approximately 25 by the end of Fiscal 2024. We will also continue with our investments in our various technology systems initiatives, including e-commerce and omnichannel capabilities, data management and analytics, customer data and insights, cybersecurity, automation including artificial intelligence and infrastructure.

#### Other Liquidity Items:

Our contractual obligations as of May 4, 2024 except for the decreased debt outstanding, as discussed above, have not changed materially from the contractual obligations outstanding at February 3, 2024, as disclosed in our Fiscal 2023 Form 10-K. We have not entered into agreements which meet the SEC’s definition of an off balance sheet financing arrangement, other than operating leases, and have made no financial commitments or guarantees with respect to any unconsolidated subsidiaries or special purpose entities.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP in a consistent manner. The preparation of these financial statements requires the selection and application of accounting policies. Further, the application of GAAP requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions. We believe it is possible that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts. We believe that we have appropriately applied our critical accounting policies. However, in the event that inappropriate assumptions or methods were used relating to the critical accounting policies, our consolidated statements of operations could be materially misstated.

Our critical accounting policies and estimates are discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2023 Form 10-K. There have not been any significant changes to our critical accounting policies and estimates during the First Quarter of Fiscal 2024. A detailed summary of significant accounting policies is included in Note 1 to our consolidated financial statements contained in our Fiscal 2023 Form 10-K.

### SEASONAL ASPECTS OF OUR BUSINESS

Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may vary significantly depending on the time of year. As a result, our quarterly operating results and working capital requirements fluctuate significantly from quarter to quarter. Typically, the demand for products for our larger brands is higher in the spring, summer and holiday seasons and lower in the fall season (the third quarter of our fiscal year). Thus, our third quarter historically has had the lowest net sales and net earnings compared to other quarters. Further, the impact of certain unusual or non-recurring items, economic conditions, our e-commerce flash clearance sales, wholesale product shipments, weather, acquisitions or other factors affecting our operations may vary from one year to the next. Therefore, due to the potential impact of these items, we do not believe that net sales or operating income in the First Quarter of Fiscal 2024 is indicative of the expected proportion of amounts by quarter for future periods.

## Market risk

As filed, 445 characters.

We are exposed to certain interest rate, foreign currency, commodity and inflation risks as discussed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our Fiscal 2023 Form 10-K. There have not been any material changes in our exposure to these risks during the First Quarter of Fiscal 2024 other than our decreased exposure to interest rates resulting from our decreased borrowings relative to February 3, 2024.

## Controls and procedures

As filed, 934 characters.

### Evaluation of Disclosure Controls and Procedures

Our company, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act during the First Quarter of Fiscal 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 557 characters.

Our business is subject to numerous risks. Investors should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Fiscal 2023 Form 10-K, which could materially affect our business, financial condition or operating results. We operate in a competitive and rapidly changing business environment and additional risks and uncertainties that we currently consider immaterial or not presently known to us may also adversely affect our business. The risks described in our Fiscal 2023 Form 10-K are not the only risks facing our company.

Filed Jun 13, 2024.
Source: SEC EDGAR, the filing index for accession 0000075288-24-000009. Last ingested by Listed: Nov 6, 2026, 12:42 ET. No prices; not investment advice.