UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended November ~~3, 2018~~2, 2019

	or

¨ ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Commission File Number: 1-4365

OXFORD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


Georgia		58-0831862
~~Georgia~~		~~58-0831862~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

999 Peachtree Street, N.E., Suite 688, Atlanta, Georgia30309

(Address of principal executive offices) (Zip Code)

~~(404)~~

(404) 659-2424

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1 par value	OXM	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ☒ No ¨

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ☒ No ¨

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer x ☒	Accelerated filer o ☐	Non-accelerated filer ¨ ☐	Smaller reporting company ¨ ☐	Emerging growth company ¨ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No þ

~~Indicate the number~~☒

As of November 30, 2019, there were 17,040,004 shares ~~outstanding of each~~ of the ~~issuer’s classes of~~registrant’s common stock ~~as of the latest practicable date.~~ outstanding.



		~~Number of shares outstanding~~
~~Title of each class~~		~~as of November 30, 2018~~
~~Common Stock, $1 par value~~		~~16,954,191~~

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OXFORD INDUSTRIES, INC.

INDEX TO FORM 10-Q

For the Third Quarter of Fiscal ~~2018~~

2019


	Page
	~~Page~~

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)	4 5
Condensed Consolidated Statements of Operations (Unaudited)	5 6
Condensed Consolidated Statements of Comprehensive Income (Unaudited)	6 7
Condensed Consolidated Statements of Cash Flows (Unaudited)	7 8
Notes to Condensed Consolidated Financial Statements (Unaudited)	8 9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15 16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	39 40
Item 4. Controls and Procedures	39 41

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	39 42
Item 1A. Risk Factors	40 42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40 42
Item 3. Defaults Upon Senior Securities	40 42
Item 4. Mine Safety Disclosures	40 42
Item 5. Other Information	40 42
Item 6. Exhibits	40 43
~~Signatures~~SIGNATURES	41 44

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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

Our SEC filings and public announcements may include forward-looking statements about future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which typically are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, ~~competitive conditions,~~demand for our products, which may be impacted by competitive conditions and/or evolving consumer shopping patterns; ~~the~~macroeconomic factors that may impact ~~of economic conditions on~~ consumer ~~demand and~~ spending for apparel and related products; ~~demand for our~~costs of products as well as the raw materials used in those products; expected pricing levels; costs of labor; the timing of shipments requested by our wholesale customers; ~~expected pricing levels;~~changes, and the impact on our business operations of such changes, in international, federal or state tax, trade and other laws and regulations, including the imposition of additional duties, tariffs, taxes or other charges or barriers to trade resulting from ongoing trade developments with China and our ability to implement mitigating sourcing strategies; weather; retention of and disciplined execution by key management; the timing and cost of store and restaurant openings and ~~of planned capital expenditures; weather; changes in international, federal or state tax, trade and other laws and regulations; costs of products~~remodels as well as ~~the raw materials used in those products; costs of labor;~~other capital expenditures; acquisition and disposition activities, including our ability to timely recognize ~~our~~ expected synergies from ~~any acquisitions we pursue;~~acquisitions; expected outcomes of pending or potential litigation and regulatory actions; the impact of any restructuring initiatives we may undertake in one or more of our business lines; access to capital and/or credit markets; changes in accounting standards and related guidance; and factors that could affect our consolidated effective tax ~~rate, including the impact of the recently enacted U.S. Tax Reform.~~rate. Forward-looking statements reflect our expectations at the time such forward looking statements are made, based on information available at such time, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for Fiscal ~~2017~~,2018, and those described from time to time in our future reports filed with the SEC. We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

DEFINITIONS

As used in this report, unless the context requires otherwise, "our," "us" or "we" means Oxford Industries, Inc. and its consolidated subsidiaries; "SG&A" means selling, general and administrative expenses; "SEC" means the United States Securities and Exchange Commission; "FASB" means the Financial Accounting Standards Board; "ASC" means the FASB Accounting Standards Codification; "GAAP" means generally accepted accounting principles in the United States; ~~"discontinued operations" means the assets~~ and ~~operations of our former Ben Sherman operating group which we sold in 2015;~~ "TBBC" means The Beaufort Bonnet ~~Company, which we acquired in December 2017; and "U.S. Tax Reform" means the United States Tax Cuts and Jobs Act as enacted on December 22, 2017.~~Company. Unless otherwise indicated, all references to assets,

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liabilities, revenues, expenses or other information in this report reflect continuing operations. Additionally, the terms listed below reflect the respective period noted:


Fiscal 2020		52 weeks ending January 30, 2021
Fiscal 2019		52 weeks ending February 1, 2020
Fiscal 2018		52 weeks ~~ending~~ended February 2, 2019
Fiscal 2017		53 weeks ended February 3, 2018
~~Fiscal 2016~~		~~52 weeks ended January 28, 2017~~
Fourth Quarter Fiscal ~~2018~~2019		13 weeks ending February ~~2, 2019~~1, 2020
Third Quarter Fiscal 2019		13 weeks ended November 2, 2019
Second Quarter Fiscal 2019		13 weeks ended August 3, 2019
First Quarter Fiscal 2019		13 weeks ended May 4, 2019
Fourth Quarter Fiscal 2018		13 weeks ended February 2, 2019
Third Quarter Fiscal 2018		13 weeks ended November 3, 2018
Second Quarter Fiscal 2018		13 weeks ended August 4, 2018
First Quarter Fiscal 2018		13 weeks ended May 5, 2018
~~Fourth Quarter~~ First Nine Months Fiscal ~~2017~~2019		14 39 weeks ended ~~February 3, 2018~~November 2, 2019
~~Third Quarter Fiscal 2017~~		~~13 weeks ended October 28, 2017~~
~~Second Quarter Fiscal 2017~~		~~13 weeks ended July 29, 2017~~
~~First Quarter Fiscal 2017~~		~~13 weeks ended April 29, 2017~~
First Nine Months Fiscal 2018		39 weeks ended November 3, 2018
~~First Nine Months Fiscal 2017~~		~~39 weeks ended October 28, 2017~~

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par amounts)

(unaudited)

November 3,
2018 February 3,
2018 October 28,
2017
ASSETS

Current Assets

Cash and cash equivalents $ 7,413
$ 6,343
$ 6,077
Receivables, net 69,400
67,542
73,724
Inventories, net 138,150
126,812
127,301
Prepaid expenses and other current assets 36,937
35,421
27,619
Total Current Assets $ 251,900
$ 236,118
$ 234,721
Property and equipment, net 194,228
193,533
191,038
Intangible assets, net 176,735
178,858
175,057
Goodwill 66,618
66,703
63,443
Other non-current assets, net 23,272
24,729
24,250
Total Assets $ 712,753
$ 699,941
$ 688,509

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Accounts payable $ 64,429
$ 66,175
$ 59,230
Accrued compensation 25,426
29,941
24,434
Other accrued expenses and liabilities 34,984
36,802
30,542
Liabilities related to discontinued operations —
2,092
3,709
Total Current Liabilities $ 124,839
$ 135,010
$ 117,915
Long-term debt 32,211
45,809
72,131
Other non-current liabilities 73,434
74,029
73,487
Deferred taxes 16,922
15,269
16,829
Liabilities related to discontinued operations —
—
972
Commitments and contingencies

Shareholders’ Equity

Common stock, $1.00 par value per share 16,956
16,839
16,833
Additional paid-in capital 140,876
136,664
134,561
Retained earnings 312,604
280,395
260,809
Accumulated other comprehensive loss (5,089 ) (4,074 ) (5,028 )
Total Shareholders’ Equity $ 465,347
$ 429,824
$ 407,175
Total Liabilities and Shareholders’ Equity $ 712,753
$ 699,941
$ 688,509


	November 2,		February 2,		November 3,
	2019		2019		2018
ASSETS
Current Assets
Cash and cash equivalents	$	21,568	$	8,327	$	7,413
Receivables, net		64,593		69,037		69,400
Inventories, net		154,229		160,656		138,150
Prepaid expenses and other current assets		28,438		31,768		36,937
Total Current Assets	$	268,828	$	269,788	$	251,900
Property and equipment, net		190,537		192,576		194,228
Intangible assets, net		175,298		176,176		176,735
Goodwill		66,594		66,621		66,618
Operating lease assets		287,977		—		—
Other non-current assets, net		23,850		22,093		23,272
Total Assets	$	1,013,084	$	727,254	$	712,753
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	60,708	$	81,612	$	64,429
Accrued compensation		21,560		24,226		25,426
Current operating lease liabilities		49,901		—		—
Other accrued expenses and liabilities		31,949		36,371		34,984
Total Current Liabilities	$	164,118	$	142,209	$	124,839
Long-term debt		—		12,993		32,211
Non-current operating lease liabilities		293,775		—		—
Other non-current liabilities		17,365		75,286		73,434
Deferred taxes		21,010		18,411		16,922
Commitments and contingencies		—		—		—
Shareholders’ Equity
Common stock, $1.00 par value per share		17,040		16,959		16,956
Additional paid-in capital		147,448		142,976		140,876
Retained earnings		357,768		323,515		312,604
Accumulated other comprehensive loss		(5,440)		(5,095)		(5,089)
Total Shareholders’ Equity	$	516,816	$	478,355	$	465,347
Total Liabilities and Shareholders’ Equity	$	1,013,084	$	727,254	$	712,753

See accompanying notes.

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Net sales $ 233,662
$ 235,960
$ 808,931
$ 793,032
Cost of goods sold 104,383
110,784
336,209
342,477
Gross profit $ 129,279
$ 125,176
$ 472,722
$ 450,555
SG&A 128,687
127,091
414,747
393,193
Royalties and other operating income 3,113
3,039
10,616
10,123
Operating income $ 3,705
$ 1,124
$ 68,591
$ 67,485
Interest expense, net 489
683
1,872
2,355
Earnings before income taxes $ 3,216
$ 441
$ 66,719
$ 65,130
Income taxes 1,355
(631 ) 17,107
24,172
Net earnings $ 1,861
$ 1,072
$ 49,612
$ 40,958

Net earnings per share:

Basic $ 0.11
$ 0.06
$ 2.98
$ 2.47
Diluted $ 0.11
$ 0.06
$ 2.95
$ 2.45

Weighted average shares outstanding:

Basic 16,694
16,618
16,672
16,591
Diluted 16,870
16,735
16,826
16,710

Dividends declared per share $ 0.34
$ 0.27
$ 1.02
$ 0.81


	Third Quarter				First Nine Months
	Fiscal 2019		Fiscal 2018		Fiscal 2019		Fiscal 2018
Net sales	$	241,221	$	233,662	$	825,194	$	808,931
Cost of goods sold		108,241		104,383		346,620		336,209
Gross profit	$	132,980	$	129,279	$	478,574	$	472,722
SG&A		134,231		128,687		417,448		414,747
Royalties and other operating income		3,845		3,113		11,469		10,616
Operating income	$	2,594	$	3,705	$	72,595	$	68,591
Interest expense, net		81		489		1,171		1,872
Earnings before income taxes	$	2,513	$	3,216	$	71,424	$	66,719
Income taxes		845		1,355		18,263		17,107
Net earnings	$	1,668	$	1,861	$	53,161	$	49,612

Net earnings per share:
Basic	$	0.10	$	0.11	$	3.17	$	2.98
Diluted	$	0.10	$	0.11	$	3.15	$	2.95
Weighted average shares outstanding:
Basic		16,773		16,694		16,748		16,672
Diluted		16,934		16,870		16,896		16,826
Dividends declared per share	$	0.37	$	0.34	$	1.11	$	1.02

See accompanying notes.

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Net earnings $ 1,861
$ 1,072
$ 49,612
$ 40,958
Other comprehensive income (loss), net of taxes:

Net foreign currency translation (loss) income (150 ) (617 ) (1,015 ) 248
Comprehensive income $ 1,711
$ 455
$ 48,597
$ 41,206


	Third Quarter				First Nine Months
	Fiscal 2019		Fiscal 2018		Fiscal 2019		Fiscal 2018
Net earnings	$	1,668	$	1,861	$	53,161	$	49,612
Other comprehensive income (loss), net of taxes:
Net foreign currency translation adjustment		176		(150)		(345)		(1,015)
Comprehensive income	$	1,844	$	1,711	$	52,816	$	48,597

See accompanying notes.

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Cash Flows From Operating Activities:

Net earnings $ 49,612
$ 40,958
Adjustments to reconcile net earnings to net cash provided by operating activities:
   Depreciation 29,878
29,779
   Amortization of intangible assets 2,055
1,733
   Equity compensation expense 5,510
4,616
   Amortization of deferred financing costs 318
317
   Deferred income taxes 1,501
3,376
   Changes in working capital, net of acquisitions and dispositions:
       Receivables, net (2,286 ) (17,227 )
       Inventories, net (14,346 ) 17,017
       Prepaid expenses and other current assets 943
(2,713 )
       Current liabilities (9,244 ) (14,217 )
       Other non-current assets, net 1,113
(241 )
       Other non-current liabilities (436 ) 1,880
Cash provided by operating activities $ 64,618
$ 65,278
Cash Flows From Investing Activities:

Acquisitions, net of cash acquired (354 ) (5,055 )
Purchases of property and equipment (30,914 ) (26,356 )
Cash used in investing activities $ (31,268 ) $ (31,411 )
Cash Flows From Financing Activities:

Repayment of revolving credit arrangements (221,750 ) (199,765 )
Proceeds from revolving credit arrangements 208,152
180,387
Proceeds from issuance of common stock 1,170
1,071
Repurchase of equity awards for employee tax withholding liabilities (2,351 ) (2,206 )
Cash dividends declared and paid (17,286 ) (13,642 )
Cash used in financing activities $ (32,065 ) $ (34,155 )
Net change in cash and cash equivalents $ 1,285
$ (288 )
Effect of foreign currency translation on cash and cash equivalents (215 ) 33
Cash and cash equivalents at the beginning of year 6,343
6,332
Cash and cash equivalents at the end of the period $ 7,413
$ 6,077
Supplemental disclosure of cash flow information:

Cash paid for interest, net $ 1,598
$ 2,098
Cash paid for income taxes $ 16,133
$ 19,536


	First Nine Months
	Fiscal 2019		Fiscal 2018
Cash Flows From Operating Activities:
Net earnings	$	53,161	$	49,612
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		29,301		29,878
Amortization of intangible assets		878		2,055
Equity compensation expense		5,698		5,510
Amortization of deferred financing costs		298		318
Deferred income taxes		2,370		1,501
Changes in working capital, net of acquisitions and dispositions:
Receivables, net		4,559		(2,286)
Inventories, net		6,203		(14,346)
Prepaid expenses and other current assets		(2,348)		943
Current liabilities		(27,479)		(9,244)
Other balance sheet changes		2,565		677
Cash provided by operating activities	$	75,206	$	64,618
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired		—		(354)
Purchases of property and equipment		(26,877)		(30,914)
Cash used in investing activities	$	(26,877)	$	(31,268)
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements		(122,241)		(221,750)
Proceeds from revolving credit arrangements		109,248		208,152
Deferred financing costs paid		(952)		—
Proceeds from issuance of common stock		1,307		1,170
Repurchase of equity awards for employee tax withholding liabilities		(2,453)		(2,351)
Cash dividends declared and paid		(18,908)		(17,286)
Other financing activities		(1,033)		—
Cash used in financing activities	$	(35,032)	$	(32,065)
Net change in cash and cash equivalents	$	13,297	$	1,285
Effect of foreign currency translation on cash and cash equivalents		(56)		(215)
Cash and cash equivalents at the beginning of year		8,327		6,343
Cash and cash equivalents at the end of the period	$	21,568	$	7,413
Supplemental disclosure of cash flow information:
Cash paid for interest, net	$	1,162	$	1,598
Cash paid for income taxes	$	13,496	$	16,133

See accompanying notes.

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OXFORD INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

THIRD QUARTER OF FISCAL ~~2018~~

2019

~~Basis of Presentation:~~ The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe the accompanying unaudited condensed consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our full fiscal year. The significant accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Annual Report on Form 10-K for Fiscal ~~2017~~.

~~Recently Issued~~

1. Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe the accompanying unaudited condensed consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented. The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported as assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our full fiscal year.

The significant accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Annual Report on Form 10-K for Fiscal 2018, except for the adoption of the new lease accounting guidance in Fiscal 2019 as discussed below and in Note 5.

Accounting Standards ~~Applicable to Future Periods~~

Adopted in Fiscal 2019

In February 2016, the FASB issued revised lease accounting guidance. The guidance requires companies to record substantially all leases, including operating leases, as assets and liabilities on the balance sheet. For these leases, we ~~will be~~are required to recognize (1) ~~a right of use~~an operating lease asset which will represent our right to use, or control the use of, a specified asset for a lease term and (2) a lease liability equal to our obligation to make lease payments arising from a lease, measured on a discounted basis. ~~Also, the revised guidance requires additional qualitative and quantitative footnote disclosures in our consolidated financial statements.~~ The guidance ~~will be effective in~~was adopted on the first day of the First Quarter of Fiscal 2019 ~~with early adoption permitted. The guidance requires the use of the~~using a modified retrospective ~~transition~~approach. The modified retrospective approach which includes a number of optional practical expedients that companies may elect to apply. In March 2018, the FASB approved a new, optional transition method that will provide companies the option to use the effective date as the date of initial application on transition.

We continue to make progress in our preparation for the adoption of this new accounting standard, including implementing lease administration and accounting software, assessing the completeness of our lease arrangements, evaluating practical expedients and accounting policy elections, and determining the potential impact of the revised lease accounting guidance on our consolidated balance sheet, statement of operations and statement of cash flows. We have implemented a new third party lease administration software, including validation of the relevant lease information included in the lease administration software for real estate leases, and are currently in process of validating information in the related lease accounting module. We continue to perform reviews of contractual arrangements, including real estate and non-real estate leases, and assess the completeness of our inventory of lease agreements. We currently plan on electing the package of practical expedients which allows us to ~~not reassess our~~apply the standard and related disclosures to the financial statements for the period of adoption and apply the previous guidance in the prior conclusions related to lease identification, lease classification and initial direct costs and are evaluating other practical expedients under the guidance. We also plan on electing the practical expedient to use the effective date as of the date of initial application on transition, and as a result will not adjustyear comparative ~~period financial information or make the lease disclosures~~periods. The adoption of the new guidance ~~for periods prior to the effective date.~~

~~Considering the magnitude of our existing real estate leases, which are classified as operating leases, the new lease guidance is expected to have~~had a ~~significant~~material impact on our condensed consolidated balance sheet ~~by requiring~~as a result of the non-cash recognition of ~~a significant amount of lease-related right of use~~operating lease assets and operating lease ~~liabilities. While we are still assessing the potential impact of the revised guidance, we do~~liabilities, but did not ~~anticipate the adoption of the guidance will~~ have a material impact on our consolidated ~~statement~~statements of operations ~~and statement of~~or cash flows.

We elected the transition relief package practical expedients by applying previous accounting conclusions to all leases that existed prior to the adoption date. Therefore, we have not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases, or (3) the accounting for initial direct costs that were previously capitalized. We did not elect the practical expedient to use hindsight for leases existing at the adoption date. Refer to Note 5 for additional disclosures and information about accounting for leases.

Recently Issued Accounting Standards Applicable to Future Periods

In June 2016, the FASB issued guidance, as amended, on the measurement of credit losses on financial instruments. This guidance amends the impairment model by requiring that companies use a forward-looking approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables. This guidance will be effective in Fiscal 2020 ~~which will commence on February 2, 2020,~~ with early adoption permitted. We are currently assessing the impact that adopting this guidance will have on our consolidated financial statements.

Recent accounting pronouncements pending adoption not discussed above ~~or in our Annual Report on Form 10-K for Fiscal 2017~~ are either not applicable or ~~will not have or are~~ not expected to have a material impact on our consolidated financial statements.

2. Operating Group Information: We identify our operating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocation across each ~~brand's~~brand’s direct to consumer, wholesale and licensing operations, as applicable. Our business is primarily operated through our Tommy Bahama, Lilly Pulitzer, Lanier Apparel and Southern Tide operating groups.

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Tommy Bahama, Lilly Pulitzer and Southern Tide each design, source, market and distribute apparel and related products bearing their respective trademarks and

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license their trademarks for other product categories, while Lanier Apparel designs, sources and distributes branded and private label ~~men's~~men’s tailored clothing, sportswear and other products.

Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, the elimination of inter-segment sales and any other items that are not allocated to the operating groups, including LIFO accounting adjustments. Because our LIFO inventory pool does not correspond to our operating group definitions, LIFO inventory accounting adjustments are not allocated to the operating groups. Corporate and Other also includes the operations of other businesses which are not included in our operating ~~groups. The~~groups, including the operations of TBBC ~~which we acquired in December 2017,~~ and our Lyons, Georgia distribution ~~center are included in Corporate and Other.~~center. For a more extensive description of our operating groups, see Part I, Item 1. Business included in our Annual Report on Form 10-K for Fiscal ~~2017.~~

2018.

The table below presents certain financial information (in thousands) about our operating groups, as well as Corporate and Other.


	Third Quarter				First Nine Months
	Fiscal 2019		Fiscal 2018		Fiscal 2019		Fiscal 2018
Net sales
Tommy Bahama	$	127,023	$	123,130	$	480,623	$	482,990
Lilly Pulitzer		71,659		68,213		219,809		208,463
Lanier Apparel		29,377		29,037		76,871		72,806
Southern Tide		9,102		9,496		35,704		34,745
Corporate and Other		4,060		3,786		12,187		9,927
Total net sales	$	241,221	$	233,662	$	825,194	$	808,931

Depreciation and amortization
Tommy Bahama	$	7,073	$	7,131	$	20,820	$	22,457
Lilly Pulitzer		2,554		2,624		7,618		7,727
Lanier Apparel		146		144		427		424
Southern Tide		135		133		404		394
Corporate and Other		285		304		910		931
Total depreciation and amortization	$	10,193	$	10,336	$	30,179	$	31,933

Operating income (loss)
Tommy Bahama	$	(7,739)	$	(5,141)	$	30,671	$	29,783
Lilly Pulitzer		10,988		9,576		46,689		43,823
Lanier Apparel		1,952		2,261		3,387		3,448
Southern Tide		526		492		4,877		4,399
Corporate and Other		(3,133)		(3,483)		(13,029)		(12,862)
Total operating income		2,594		3,705	$	72,595	$	68,591
Interest expense, net		81		489		1,171		1,872
Earnings before income taxes	$	2,513	$	3,216	$	71,424	$	66,719

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Net sales
Tommy Bahama $ 123,130
$ 123,895
$ 482,990
$ 483,971
Lilly Pulitzer 68,213
59,244
208,463
192,045
Lanier Apparel 29,037
43,110
72,806
84,314
Southern Tide 9,496
9,217
34,745
31,254
Corporate and Other 3,786
494
9,927
1,448
Total net sales $ 233,662
$ 235,960
$ 808,931
$ 793,032
Depreciation and amortization
Tommy Bahama $ 7,131
$ 8,033
$ 22,457
$ 23,321
Lilly Pulitzer 2,624
2,303
7,727
6,377
Lanier Apparel 144
145
424
443
Southern Tide 133
108
394
317
Corporate and Other 304
355
931
1,054
Total depreciation and amortization $ 10,336
$ 10,944
$ 31,933
$ 31,512
Operating income (loss)
Tommy Bahama $ (5,141 ) $ (5,872 ) $ 29,783
$ 32,082
Lilly Pulitzer 9,576
4,952
43,823
43,621
Lanier Apparel 2,261
5,615
3,448
6,668
Southern Tide 492
1,016
4,399
3,765
Corporate and Other (3,483 ) (4,587 ) (12,862 ) (18,651 )
Total operating income $ 3,705
$ 1,124
$ 68,591
$ 67,485
Interest expense, net 489
683
1,872
2,355
Earnings before income taxes $ 3,216
$ 441
$ 66,719
$ 65,130

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The tables below quantify, for each operating group and in total, the amount of net sales (in thousands) and net sales by distribution channel as a percentage of net sales for each period presented.


	Third Quarter Fiscal 2019
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	127,023	46	%	14	%	14	%	26	%	—	%
Lilly Pulitzer		71,659	35	%	55	%	—	%	10	%	—	%
Lanier Apparel		29,377	—	%	1	%	—	%	99	%	—	%
Southern Tide		9,102	—	%	19	%	—	%	81	%	—	%
Corporate and Other		4,060	—	%	57	%	—	%	36	%	7	%
Total	$	241,221	35	%	26	%	7	%	32	%	—	%


	Third Quarter Fiscal 2018
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	123,130	46	%	14	%	13	%	27	%	—	%
Lilly Pulitzer		68,213	35	%	53	%	—	%	12	%	—	%
Lanier Apparel		29,037	—	%	—	%	—	%	100	%	—	%
Southern Tide		9,496	—	%	16	%	—	%	84	%	—	%
Corporate and Other		3,786	—	%	50	%	—	%	34	%	16	%
Total	$	233,662	35	%	24	%	7	%	34	%	—	%


	First Nine Months Fiscal 2019
	Net Sales		Retail		E‑commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	480,623	48	%	18	%	13	%	21	%	—	%
Lilly Pulitzer		219,809	43	%	36	%	—	%	21	%	—	%
Lanier Apparel		76,871	—	%	1	%	—	%	99	%	—	%
Southern Tide		35,704	—	%	18	%	—	%	82	%	—	%
Corporate and Other		12,187	—	%	60	%	—	%	32	%	8	%
Total net sales	$	825,194	39	%	22	%	8	%	31	%	—	%


	First Nine Months Fiscal 2018
	Net Sales		Retail		E‑commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	482,990	48	%	17	%	13	%	22	%	—	%
Lilly Pulitzer		208,463	44	%	35	%	—	%	21	%	—	%
Lanier Apparel		72,806	—	%	—	%	—	%	100	%	—	%
Southern Tide		34,745	—	%	16	%	—	%	84	%	—	%
Corporate and Other		9,927	—	%	54	%	—	%	27	%	19	%
Total net sales	$	808,931	40	%	20	%	8	%	32	%	—	%

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3. ~~Shareholders'~~Shareholders’ Equity: The following tables detail the changes (in thousands) in our common stock, additional paid-in capital ("APIC"), retained earnings and accumulated other comprehensive (loss) income ("AOCI"), for each period presented.


	First Nine Months Fiscal 2019
	Common Stock		APIC		Retained Earnings		AOCI		Total
February 2, 2019	$	16,959	$	142,976	$	323,515	$	(5,095)	$	478,355
Net earnings and other comprehensive income		—		—		21,657		(388)		21,269
Shares issued under equity plans		91		331		—		—		422
Compensation expense for equity awards		—		1,876		—		—		1,876
Repurchase of shares		(31)		(2,422)		—		—		(2,453)
Cash dividends declared and paid		—		—		(6,297)		—		(6,297)
Cumulative effect of change in accounting standards		—		—		—		—		—
May 4, 2019	$	17,019	$	142,761	$	338,875	$	(5,483)	$	493,172
Net earnings and other comprehensive income		—		—		29,836		(133)		29,703
Shares issued under equity plans		16		447		—		—		463
Compensation expense for equity awards		—		1,915		—		—		1,915
Repurchase of shares		—		—		—		—		—
Cash dividends declared and paid		—		—		(6,304)		—		(6,304)
Cumulative effect of change in accounting standards		—		—		—		—		—
August 3, 2019	$	17,035	$	145,123	$	362,407	$	(5,616)	$	518,949
Net earnings and other comprehensive income		—		—		1,668		176		1,844
Shares issued under equity plans		5		418		—		—		423
Compensation expense for equity awards		—		1,907		—		—		1,907
Repurchase of shares				—		—		—		—
Cash dividends declared and paid		—		—		(6,307)		—		(6,307)
Cumulative effect of change in accounting standards		—		—		—		—		—
November 2, 2019	$	17,040	$	147,448	$	357,768	$	(5,440)	$	516,816

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Third Quarter Fiscal 2018
Common Stock APIC Retained Earnings AOCI Total
August 4, 2018 $ 16,951
$ 138,613
$ 316,507
$ (4,939 ) $ 467,132
Net earnings and other comprehensive income —
—
1,861
(150 ) 1,711
Shares issued under equity plans 5
351
—
—
356
Compensation expense for equity awards —
1,912
—
—
1,912
Repurchase of shares —
—
—
—
—
Cash dividends declared and paid —
—
(5,764 ) —
(5,764 )
Cumulative effect of change in accounting standards —
—
—
—
—
November 3, 2018 $ 16,956
$ 140,876
$ 312,604
$ (5,089 ) $ 465,347
Third Quarter Fiscal 2017
Common Stock APIC Retained Earnings AOCI Total
July 29, 2017 $ 16,827
$ 132,668
$ 264,282
$ (4,411 ) $ 409,366
Net earnings and other comprehensive income —
—
1,072
(617 ) 455
Shares issued under equity plans 6
352
—
—
358
Compensation expense for equity awards —
1,541
—
—
1,541
Repurchase of shares —
—
—
—
—
Cash dividends declared and paid —
—
(4,545 ) —
(4,545 )
Cumulative effect of change in accounting standards —
—
—
—
—
October 28, 2017 $ 16,833
$ 134,561
$ 260,809
$ (5,028 ) $ 407,175
First Nine Months Fiscal 2018
Common Stock APIC Retained Earnings AOCI Total
February 3, 2018 $ 16,839
$ 136,664
$ 280,395
$ (4,074 ) $ 429,824
Net earnings and other comprehensive income —
—
49,612
(1,015 ) 48,597
Shares issued under equity plans 147
1,023
—
—
1,170
Compensation expense for equity awards —
5,510
—
—
5,510
Repurchase of shares (30 ) (2,321 ) —
—
(2,351 )
Cash dividends declared and paid —
—
(17,286 ) —
(17,286 )
Cumulative effect of change in accounting standards —
—
(117 ) —
(117 )
November 3, 2018 $ 16,956
$ 140,876
$ 312,604
$ (5,089 ) $ 465,347
First Nine Months Fiscal 2017
Common Stock APIC Retained Earnings AOCI Total
January 28, 2017 $ 16,769
$ 131,144
$ 233,493
$ (5,276 ) $ 376,130
Net earnings and other comprehensive income —
—
40,958
248
41,206
Shares issued under equity plans 104
967
—
—
1,071
Compensation expense for equity awards —
4,616
—
—
4,616
Repurchase of shares (40 ) (2,166 ) —
—
(2,206 )
Cash dividends declared and paid —
—
(13,642 ) —
(13,642 )
Cumulative effect of change in accounting standards —
—
—
—
—
October 28, 2017 $ 16,833
$ 134,561
$ 260,809
$ (5,028 ) $ 407,175

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	First Nine Months Fiscal 2018
	Common Stock		APIC		Retained Earnings		AOCI		Total
February 3, 2018	$	16,839	$	136,664	$	280,395	$	(4,074)	$	429,824
Net earnings and other comprehensive income		—		—		20,567		(581)		19,986
Shares issued under equity plans		128		236		—		—		364
Compensation expense for equity awards		—		1,718		—		—		1,718
Repurchase of shares		(30)		(2,321)		—		—		(2,351)
Cash dividends declared and paid		—		—		(5,759)		—		(5,759)
Cumulative effect of change in accounting standards		—		—		(117)		—		(117)
May 5, 2018	$	16,937	$	136,297	$	295,086	$	(4,655)	$	443,665
Net earnings and other comprehensive income		—		—		27,184		(284)		26,900
Shares issued under equity plans		14		436		—		—		450
Compensation expense for equity awards		—		1,880		—		—		1,880
Repurchase of shares		—		—		—		—		—
Cash dividends declared and paid		—		—		(5,763)		—		(5,763)
Cumulative effect of change in accounting standards		—		—		—		—		—
August 4, 2018	$	16,951	$	138,613	$	316,507	$	(4,939)	$	467,132
Net earnings and other comprehensive income		—		—		1,861		(150)		1,711
Shares issued under equity plans		5		351		—		—		356
Compensation expense for equity awards		—		1,912		—		—		1,912
Repurchase of shares		—		—		—		—		—
Cash dividends declared and paid		—		—		(5,764)		—		(5,764)
Cumulative effect of change in accounting standards		—		—		—		—		—
November 3, 2018	$	16,956	$	140,876	$	312,604	$	(5,089)	$	465,347
Net earnings and other comprehensive income		—		—		16,679		(6)		16,673
Shares issued under equity plans		3		283		—		—		286
Compensation expense for equity awards		—		1,817		—		—		1,817
Repurchase of shares		—		—		—		—		—
Cash dividends declared and paid		—		—		(5,768)		—		(5,768)
Cumulative effect of change in accounting standards		—		—		—		—		—
February 2, 2019	$	16,959	$	142,976	$	323,515	$	(5,095)	$	478,355

Substantially all amounts included in AOCI in our consolidated balance sheets, as well as any related changes, for each period presented, reflect the net foreign currency translation adjustment related to our Tommy Bahama investments and operations in Canada, Australia and Japan.

~~4. Income Taxes:~~ ~~U.S. Tax Reform, as enacted on December 22, 2017, made significant changes in the taxation of our domestic and foreign earnings. The federal corporate tax rate was lowered~~ NaN amounts were reclassified from ~~35% to 21% effective January 1, 2018, resulting in a blended federal rate applicable~~AOCI to our ~~fiscal year ended February 3, 2018 to reflect the weighted average~~consolidated statements of the rate applicable to the period prior to the effective date and the period on and after the effective date. The change in the federal corporate tax rate also required revaluation of our deferred tax assets and liabilities to reflect the enacted rate at which we expect those differences to reverse. U.S. Tax Reform moved the U.S. to a territorial taxation system under which the earnings of foreign subsidiaries will generally not be subject to U.S. federal income tax upon distribution and imposed a one-time transition tax on the amount of previously untaxed earnings of those foreign subsidiaries measured as of November 2, 2017 or December 31, 2017, whichever resulted in the greater taxable amount. Additional changes included the increase in bonus depreciation available for certain assets acquired after September 27, 2017 and limitations on the deduction for certain expenses, including executive compensation and interest incurred in taxable years beginning on or after January 1, 2018. New taxes were imposed related to foreign income including, for years beginning after December 31, 2017, a tax on global intangible low-taxed income (“GILTI”), disallowance of deductions for certain payments (the base erosion anti-abuse tax, or “BEAT”) and new deductions enacted for certain foreign-derived intangible income (“FDII”).

The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides us with up to one year to finalize accounting for the impacts of U.S. Tax Reform. Since our initial accounting for U.S Tax Reform impact is incomplete, we may include provisional amounts when reasonable estimates can be made or continue to apply the prior tax law if a reasonable estimate cannot be made. In accordance with SAB 118, as of November 3, 2018 and February 3, 2018, we estimated provisional tax amounts related to our deferred income tax assets and liabilities, including the impacts of the change in the federal corporate tax rate, deductions for executive compensation, our indefinite reinvestment assertion, the transition tax, GILTI, BEAT and FDII. Also, as of November 3, 2018 and February 3, 2018, we have not yet elected an accounting policy related to how we will account for GILTI and therefore have not included any deferred tax impacts of GILTI in our consolidated financial statements. Further, as of November 3, 2018 and February 3, 2018, we continue to assert, on a provisional basis, that substantially all of our investments in foreign subsidiaries and related earnings are permanently reinvested outside of the United States, or that there is no tax payableoperations for any ~~subsidiaries in which we are not permanently reinvested. Therefore, we have not recorded any deferred tax liabilities related to these investments and earnings.~~

As a result of the provisional revaluation impact on our deferred taxes and certain other items related to U.S. Tax Reform, we recognized a reduction in tax expense of $12 million in our Fiscal 2017 statement of operations. During the First Nine Months of Fiscal 2018, we did not recognize any measurement period ~~adjustments to the provisional amounts recognized during Fiscal 2017. We are still finalizing our calculations related to the impact of U.S. Tax Reform.~~

The effective tax rate for the Third Quarter of Fiscal 2018, Third Quarter of Fiscal 2017, First Nine Months of Fiscal 2018 and First Nine Months of Fiscal 2017 were 42.1%, (143.1)%, 25.6% and 37.1%, respectively. The net impact of discrete or other items often results in a more significant or unusual impact on the effective tax rate in our third quarter given the significantly lower operating results during the third quarter as compared to the other quarters of the fiscal year. Thus, the effective tax rate for the third quarter is not indicative of the effective tax rate anticipated for the full year. The effective tax rate for the First Nine Months of Fiscal 2018 decreased from the First Nine Months of Fiscal 2017, primarily due to the lower federal corporate tax rate resulting from U.S. Tax Reform. Our effective tax rate for the full year of Fiscal 2018 is expected to be approximately 26%, which includes the U.S. federal statutory rate of 21% and state income taxes, net of the related federal income tax benefit; the rate differential related to foreign operations; valuation allowances against operating losses and other carryforwards; the excess tax benefit related to restricted stock vesting; and various other items impacting the effective tax rate. The effective rate for Fiscal 2018 may vary from 26% as a result of adjustments to the provisional amounts recognized for U.S. Tax Reform as discussed above as well as any discrete items recognized during Fiscal 2018. The final impact of U.S. Tax Reform may differ from our provisional amounts recognized in Fiscal 2017 due to, among other things, additional regulatory guidance that may be issued, us obtaining additional information to refine our estimated tax amounts and changes in interpretations and assumptions.

~~5. Accounting Standards Adopted in Fiscal 2018:~~

presented.

4. Revenue ~~Recognition for Contracts with Customers~~

In May 2014, the FASB issued guidance, as revised through supplemental guidance, which provided a single, comprehensive accounting model for revenue arising from contracts with customers. This new revenue recognition guidance superseded most of the prior revenue recognition guidance, which specified that revenue should be recognized when risks and rewards transfer

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to a customer. Under the new guidance, revenue is recognized at an amount that reflects the consideration expected to be received for those goods and services pursuant to a five-step approach: (1) identify the contracts with the customer; (2) identify the separate performance obligations in the contracts; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied. The new guidance also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flow arising from customer contracts, including significant judgments and changes in judgments.

We adopted the revised revenue recognition guidance as of the first day of Fiscal 2018 using the modified retrospective method, applying the guidance only to contracts that were not completed prior to Fiscal 2018. There was no adjustment to retained earnings for the cumulative effect of applying the guidance upon adoption as there was no change in the timing of revenue recognition for any of our revenue streams. We have changed our accounting policies and practices and designed and implemented specific controls over our evaluation of the impact of the new guidance, including disclosure requirements and the collection of relevant data for the reporting process.

Recognition:Our revenue ~~streams consist~~consists of direct to consumer sales, including our retail store, e-commerce and restaurant operations, and wholesale sales, which are included in net sales in our consolidated statements of operations, as well as royalty income, which isrepresents substantially all amounts included in royalties and other income in our consolidated statements of operations. ~~The tables below quantify, for each operating group and in total, the amount of net sales by distribution channel (in thousands) and as a percentage of net sales for each period presented.~~

Third Quarter of Fiscal 2018
Net Sales Retail E-commerce Restaurant Wholesale Other
Tommy Bahama $ 123,130
46% 14% 13% 27% —%
Lilly Pulitzer 68,213
35% 53% —% 12% —%
Lanier Apparel 29,037
—% —% —% 100% —%
Southern Tide 9,496
—% 16% —% 84% —%
Corporate and Other 3,786
—% 50% —% 34% 16%
Total $ 233,662
35% 24% 7% 34% —%
Third Quarter of Fiscal 2017
Net Sales Retail E-commerce Restaurant Wholesale Other
Tommy Bahama $ 123,895
47% 11% 13% 29% —%
Lilly Pulitzer 59,244
35% 53% —% 12% —%
Lanier Apparel 43,110
—% —% —% 100% —%
Southern Tide 9,217
—% 16% —% 84% —%
Corporate and Other 494
—% —% —% —% 100%
Total $ 235,960
33% 20% 7% 40% —%
First Nine Months of Fiscal 2018
Net Sales Retail E-commerce Restaurant Wholesale Other
Tommy Bahama $ 482,990
48% 17% 13% 22% —%
Lilly Pulitzer 208,463
44% 35% —% 21% —%
Lanier Apparel 72,806
—% —% —% 100% —%
Southern Tide 34,745
—% 16% —% 84% —%
Corporate and Other 9,927
—% 54% —% 27% 19%
Total $ 808,931
40% 20% 8% 32% —%
First Nine Months of Fiscal 2017
Net Sales Retail E-commerce Restaurant Wholesale Other
Tommy Bahama $ 483,971
49% 14% 13% 24% —%
Lilly Pulitzer 192,045
38% 33% —% 29% —%
Lanier Apparel 84,314
—% —% —% 100% —%
Southern Tide 31,254
—% 17% —% 83% —%
Corporate and Other 1,448
—% —% —% —% 100%
Total $ 793,032
39% 17% 8% 36% —%

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~~Revenue is recognized~~We recognize revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our accounting policies related to revenue recognition for each type of contract with customers, including a description of the related performance obligations, ~~generally consist of delivering our products to our direct to consumer~~return rights, allowances, discounts, credit terms and ~~wholesale customers. Control of~~other information, is described in the ~~product is generally transferred upon providing the product to consumers~~significant accounting policies described in our ~~bricks and mortar retail stores and restaurants, upon physical delivery~~Annual Report on Form 10-K for Fiscal 2018.

Table of the products to consumers in our e-commerce operations and upon shipment from the distribution center to customers in our wholesale operations. Once control is transferred to the customer, we have completed our performance obligations related to the contract and have an unconditional right to consideration as outlined in the contract. Our receivables resulting from contracts with customers in our direct to consumer operations are generally collected within a few days, upon settlement of the credit card transaction. Our receivables resulting from contracts with our customers in our wholesale operations are generally collected within one quarter, in accordance with established credit terms. All of our performance obligations under the terms of our contracts with customers in our direct to consumer and wholesale operations have an expected original duration of one year or less. Our revenue, including any freight income, is recognized net of applicable taxes in our consolidated statements of operations.Contents

In our direct to consumer operations, consumers have certain rights to return product within a specified period and are eligible for certain point of sale discounts, thus retail store, e-commerce and restaurant revenues are recorded net of estimated returns and discounts, as applicable.

The ~~sales return allowance is recognized on a gross basis, with the recognition of a return liability for~~table below quantifies the amount of net sales ~~estimated to be returned and a return asset~~by distribution channel (in thousands) for ~~the right to recover the product estimated to be returned by the customer, measured at the previous carrying~~each period presented.


	Third Quarter				First Nine Months
	Fiscal 2019		Fiscal 2018		Fiscal 2019		Fiscal 2018
Retail	$	83,636	$	80,624	$	324,892	$	322,940
E-commerce		62,310		56,392		180,736		164,277
Restaurant		17,325		16,329		61,457		63,089
Wholesale		77,595		79,654		256,794		256,432
Other		355		663		1,315		2,193
Net sales	$	241,221	$	233,662	$	825,194	$	808,931

Substantially all amounts of the product. The value of inventory associated with a right to recover the goods returned are included in prepaid expenses and other current assets in our consolidated balance sheet as of November 3, 2018, whereas prior to Fiscal 2018 those amounts were included in inventories. The changes in the return liability are recognized in receivables, net ~~sales in our consolidated statements of operations and the changes in the return asset are recognized in cost of goods sold in our consolidated statements of operations for all periods presented.~~

represent receivables related to contracts with customers. In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising support to some of our wholesale customers for certain products. Some of these arrangements are written agreements, while others may be implied by customary practices or expectations in the industry. Wholesale sales are recorded net of such discounts, allowances and cooperative advertising support for our customers, operational chargebacks and provisions for estimated wholesale returns. As certain allowances, other deductions and returns are not finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the customer that we expect to ultimately receive. In accordance with the new revenue recognition guidance, we only recognize revenue to the extent that it is probable that we will not have a a significant reversal of revenue in a future period. Significant considerations in determining our estimates for discounts, allowances, operational chargebacks and returns for wholesale customers may include historical and current trends, agreements with customers, projected seasonal results, an evaluation of current economic conditions, specific program or product expectations and retailer performance. We record ~~the~~these discounts, returns and allowances as a reduction to net sales in our consolidated statements of operations and as a reduction to receivables, net in our consolidated balance ~~sheets, with the estimated value of inventory expected to be returned in prepaid expenses and other current assets in our consolidated balance sheets as of November 3, 2018.~~sheets. As of November 2, 2019, February 2, 2019 and November 3, 2018, ~~February 3, 2018 and October 28, 2017,~~ reserve balances recorded as a reduction to receivables related to these items were $8$9 million, $7 million and $9$8 million, respectively.

In addition to trade and other receivables, an income tax ~~receivable~~receivables of $1 million, $1 million and $4 million and $5tenant allowances due from landlord of $2 million, is$0 million and $0 million are included in receivables, net in our consolidated balance sheet as of November 2, 2019, February 2, 2019 and November 3, 2018, ~~and~~respectively. As of November 2, 2019, February 3, 2018, respectively, with no material income tax receivable as of October 28, 2017. Substantially all other amounts recognized in receivables, net as of those dates represent receivables related to contracts with customers. As of2, 2019 and November 3, 2018, prepaid expenses and other current assets ~~includes~~included $4 million, $2 million and $2 million, respectively, representing the estimated value of inventory for wholesale and direct to consumer sales returns, which was recognized in inventories in prior years pursuant to the previous guidance. An estimated sales return liability of $2 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of November 3, 2018.returns. We dodid not have any significant contract assets related to contracts with customers, other than receivables and the value of inventory associated with reserves for expected sales returns, as of November 2, 2019, February 2, 2019 and November 3, 2018.

An estimated sales return liability of $3 million, $3 million and $2 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of November 2, 2019, February 2, 2019 and November 3, 2018, ~~February 3, 2018 or October 28, 2017.~~

In addition to our estimated return amounts, our contract liabilities related to contracts with customers include gift cards and merchandise credits issued by us, which do not have an expiration date, but are redeemable on demand by the holder of the card. Historically, substantially all gift cards and merchandise credits are redeemed within one year of issuance. Gift cards and merchandise credits are recorded as a liability until our performance obligation is satisfied, which occurs when redeemed by the consumer, at which point revenue is recognized. However, we recognize breakage income for certain gift cards and merchandise credits using the redemption recognition method, subject to applicable laws in certain states.respectively. Contract liabilities for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in other accrued expenses and liabilities in our consolidated balance sheets and totaled ~~$10~~$11 million, ~~$10~~$12 million and $9$10 million as of November 2, 2019, February 2, 2019, and November 3, 2018, ~~February 3, 2018,~~respectively.

5. Leases: We enter into real estate lease agreements for retail, food and ~~October 28, 2017, respectively. Gift~~

~~Table~~beverage, office and warehouse/distribution space, as well as leases for certain equipment. Our leases have varying terms and expirations and may have provisions to extend, renew or terminate the lease agreement at our discretion, among other terms and conditions. Our retail and restaurant leases typically provide for contingent rent based on sales if certain sales thresholds are achieved. Most of ~~Contents~~

~~card breakage, which was~~our leases provide for payments of real estate taxes, insurance and other operating expenses applicable to the property, and certain of our leases require payment of sales taxes on rental payments. Payments for real estate taxes, sales taxes, insurance and other operating expenses are not ~~material in any period presented, is~~ included in ~~net~~lease expense. Our lease agreements do not include any material residual value guarantees or material restrictive financial covenants.

Substantially all of our leases are classified as long-term operating leases, which have not historically been recognized as assets and liabilities in our consolidated balance sheets. When a non-cancelable long-term operating lease includes fixed escalation clauses or lease incentives for rent holidays, rent expense is generally recognized on a straight-line basis over the initial term of the lease from the date that we take possession of the space and assumes that any termination options included in the lease will not be exercised. Contingent rents, including those based on a percentage of retail sales over stated levels, and rental payment increases based on a contingent future event have been recognized as the expense is incurred. The difference between the rents payable under the lease and the amount recognized on a straight-line basis has historically been recorded in other non-current liabilities in our consolidated balance sheets, with the exception of the amounts recognized in current lease liabilities. Also, any tenant improvement allowance amounts received from the landlord have historically been deferred as a liability in our consolidated balance sheets and then recognized in our consolidated statements of ~~operations.~~operations as a reduction to rent

~~Royalties from~~

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expense over the ~~license~~term of the lease agreement on a straight-line basis. Deferred rent in our ~~owned brands, which~~consolidated balance sheets, including tenant improvement allowances and all amounts in non-current and current liabilities, as of February 2, 2019 was $61 million.

Pursuant to the revised lease accounting guidance adopted in Fiscal 2019, we determine if an arrangement is a lease at contract inception. Operating lease liabilities are ~~generally~~recognized at the lease commencement date based on the ~~greater~~present value of lease payments over the lease term. The significant judgments in calculating the present value of lease obligations include determining the lease term and lease payment amounts, which are dependent upon our assessment of the likelihood of exercising any renewal or termination options that are at our discretion, as well as the discount rate applied to the unpaid lease payments. Operating leases are included in operating lease assets, current operating lease liabilities and non-current operating lease liabilities in our consolidated balance sheet. The operating lease asset at commencement reflects the operating lease liability reduced for any lease incentives, including tenant improvement allowances. Lease expense for operating leases is recognized on a straight-line basis over the lease term, which is consistent with the previous guidance. Variable rental payments based on a percentage of retail sales over contractual levels and variable incremental rental payments adjusted periodically for inflation are both recognized as incurred.

We account for the ~~licensee's actual net sales~~underlying operating lease asset at the individual lease level. Typically, we do not include any renewal or ~~a contractually~~termination options at our discretion in the underlying lease term as the probability of exercise is not reasonably certain. The revised lease guidance requires us to discount unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, ~~minimum royalty amount, are recognized over time~~our incremental borrowing rate. As our leases typically do not provide an implicit rate, we use an estimated incremental borrowing rate based ~~upon the guaranteed minimum royalty obligations and adjusted~~on information available at commencement date, or as ~~sales data, or estimates thereof, is received from licensees. Royalty income represents substantially all~~of February 3, 2019 for any leases in place at adoption of the ~~amounts~~revised guidance. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Finance leases are not material to our consolidated financial statements.

Substantially all lease expense is included in ~~royalties and other operating income~~SG&A in our consolidated statements of operations.

~~We have made~~ For the following accounting policy elections and practical expedients related to the new revenue recognition guidance: (1) we exclude any taxes collected from customers that are remitted to taxing authorities from net sales; (2) we deem charges incurred by us before and after the customer obtains control of goods, as applicable, as fulfillment costs; (3) as customer payment terms are less than one year from the transfer of goods, we do not adjust receivable amounts for the effects of time value of money; and (4) we utilize the portfolio approach when multiple contracts or performance obligations are involved in the determination of revenue recognition. We do not believe the use of any practical expedients utilized by us had a material impact on our financial statements upon our adoption of the revised guidance.

~~Deferred income taxes for intra-entity asset transfers~~

In October 2016, the FASB issued guidance on the recognition of current and deferred income taxes for intra-entity asset transfers. The revised guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs. We adopted this guidance in the FirstThird Quarter of Fiscal ~~2018,~~2019, operating lease expense was $16 million and variable lease expense was $8 million, resulting in ~~a $0.1 million reduction to retained earnings as~~total lease expense of ~~February 4, 2018 and no impact on net earnings for any period presented.~~

~~6. Tommy Bahama Japan Charges:~~ ~~During~~$24 million. For the ~~Second Quarter~~First Nine Months of Fiscal ~~2018, we incurred certain charges related to~~2019, operating lease expense was $49 million and variable lease expense was $25 million, resulting in total lease expense of $74 million. As of November 2, 2019, the ~~restructure~~weighted-average remaining operating lease term was seven years and ~~downsizing of our Tommy Bahama Japan operations, including~~ the ~~closure and early~~weighted-average discount rate for operating leases was 5%. Cash paid for lease termination of the Tommy Bahama Ginza flagship retail-restaurant location, for which the lease was previously scheduled to expire in 2022. These charges, which are an estimate of the charges that will actually be incurred, totaled $4 millionamounts included in the ~~Second Quarter~~measurement of ~~Fiscal 2018, consisting of $2 million of~~operating lease termination and premises reinstatement charges, $1 million of non-cash asset impairment charges and $1 million of other charges including inventory markdowns and employee severance. These charges were recognized in SG&A, except for the inventory markdowns of $0.5 million which were recognized in cost of goods sold. No additional charges were recognizedliabilities in the Third Quarter of Fiscal 2019 and the First Nine Months of Fiscal 2019 was $18 million and $53 million, respectively.

As of November 2, 2019, the required lease liability payments for the fiscal years specified below were as follows (in thousands):


	Operating lease
Remainder of 2019	$	17,066
2020		62,622
2021		65,589
2022		61,399
2023		58,279
2024		45,664
After 2024		92,256
Total lease payments	$	402,875
Less: Difference between discounted and undiscounted lease payments		59,199
Present value of lease liabilities	$	343,676

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Disclosures related to periods prior to adoption of revised accounting guidance

Total rent expense in Fiscal 2018 was $96 million, which includes minimum rents, sales taxes, real estate taxes, insurance and other operating expenses and contingent rents incurred under all leases. Payments for real estate taxes, sales taxes, insurance, other operating expenses and contingent percentage rent are included in rent expense, but are generally not included in the aggregate minimum rental commitments, as, in many cases, the amounts payable in future periods are not quantified in the lease agreement or may be dependent on future events. The total amount of such charges included in total rent expense above were $28 million in Fiscal 2018. ~~Amounts~~As of February 2, 2019, the aggregate minimum base rental commitments for all non-cancelable operating leases with original terms in excess of one year were $68 million, $66 million, $62 million, $59 million, and $51 million for each of the next five years and $124 million thereafter.

6. Debt: In July 2019, we amended our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”) by entering into the First Amendment to the Fourth Amended and Restated Credit Agreement to (1) extend the maturity of the facility to July 2024, and (2) modify certain provisions including a reduction of interest rates on certain borrowings and a reduction in unused line fees. We had 0 amounts outstanding as of November 2, 2019 under the U.S. Revolving Credit Agreement, compared to borrowings of $13 million as of February 2, 2019 and borrowings of $32 million as of November 3, ~~2018,~~2018. The U.S. Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified percentages of eligible categories of assets, (2) accrues variable-rate interest, unused line fees and letter of credit fees based upon average unused availability or utilization, (3) requires periodic interest payments with principal due at maturity, and (4) is secured by a first priority security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal property.

To the extent cash flow needs exceed cash flow provided by our operations we will have access, subject to its terms, to our U.S. Revolving Credit Agreement to provide funding for operating activities, capital expenditures and acquisitions, if any. Our U.S. Revolving Credit Agreement is also used to establish collateral for certain insurance programs and leases and to finance trade letters of credit for product purchases, which ~~are included in current liabilities~~reduce the amounts available under our line of credit when issued. As of November 2, 2019, $3 million of letters of credit were outstanding under our U.S. Revolving Credit Agreement. After considering these limitations and the amount of eligible assets in our ~~consolidated balance sheet, total $2 million. These amounts are expected~~borrowing base, as of November 2, 2019, we had $313 million in unused availability under the U.S. Revolving Credit Agreement, subject to ~~be paid in the Fourth Quarter of Fiscal 2018 or the First Quarter of Fiscal 2019.~~

We closed the Tommy Bahama Ginza restaurant in the Third Quarter of Fiscal 2018 and plan to close the Tommy Bahama Ginza retail store in the Fourth Quarter of Fiscal 2018. Following the closure of the Ginza retail store, we will retain a very limited presence in Japan, which will allow us to continue to review various alternatives for the Tommy Bahama brand in Japan.

certain limitations on borrowings.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 Annual Report on Form 10-K for Fiscal ~~2017~~.

2018.

OVERVIEW

We are a global apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer and Southern Tide lifestyle brands and other owned and licensed brands as well as private label apparel products. During Fiscal ~~2017, 92%~~2018, 93% of our net sales were from products bearing brands that we own and ~~66%~~69% of our net sales were through our direct to consumer channels of distribution. In Fiscal ~~2017, 97%~~2018, 96% of our consolidated net sales were to customers located in the United States, with the sales outside the United States consisting primarily of our Tommy Bahama product sales in Canada and the Asia-Pacific region.

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Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong emotional response from our target consumers. 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, like Tommy Bahama, Lilly Pulitzer and Southern Tide, can command greater loyalty and higher price points at retail and create licensing opportunities, which may drive higher earnings. 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.

Our ability to compete successfully in styling and marketing is directly related to 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 products each season.

To further strengthen each lifestyle ~~brand's~~brand’s connections with consumers, we directly communicate with consumers through digital and print media on a regular basis. We believe our ability to effectively communicate the images, lifestyle and products of our brands and create an emotional connection with consumers is critical to the success of our brands. ~~Our advertising~~Advertising for our brands often attempts to convey the lifestyle of the brand as well as a specific product.

We distribute our owned lifestyle branded products primarily through our direct to consumer channels, consisting of our Tommy Bahama and Lilly Pulitzer retail stores and our e-commerce sites for Tommy Bahama, Lilly Pulitzer and Southern Tide, and through our wholesale distribution channels. Our direct to consumer operations provide us with the opportunity to interact directly with our customers, present to them a broad assortment of our current season products and immerse them in the theme of the lifestyle brand. We believe that presenting our products in a setting specifically designed to showcase the lifestyle on which the brands are based enhances the image of our brands. Our Tommy Bahama and Lilly Pulitzer full-price retail stores provide high visibility for our brands and products and allow us to stay close to the preferences of our consumers, while also providing a platform for long-term growth for the brands. In Tommy Bahama, we also operate ~~a limited number of~~ restaurants ~~including~~and Marlin Bars, generally adjacent to a Tommy Bahama full-price retail store location, which we believe further enhance the ~~brand's~~brand’s image with consumers. Our e-commerce websites ~~which represented 19% of our consolidated net sales in Fiscal 2017,~~ provide the opportunity to increase revenues by reaching a larger population of consumers and at the same time allow our brands to provide a broader range of products.

The wholesale operations of our lifestyle brands complement our direct to consumer operations and provide access to a larger group of consumers. As we seek to maintain the integrity of our lifestyle brands by limiting promotional activity in our full-price retail stores and e-commerce websites, we generally target wholesale customers that follow this same approach in their stores. Our wholesale customers for our Tommy Bahama, Lilly Pulitzer and Southern Tide brands generally include various specialty stores, ~~including~~ Signature Stores for Lilly Pulitzer and Southern Tide, better department stores and multi-branded e-commerce retailers.

Within our Lanier Apparel operating group, we sell tailored clothing and sportswear products under licensed, private label and owned brands. Lanier ~~Apparel's~~Apparel’s customers include department stores, discount and off-price retailers, warehouse clubs, national chains, specialty stores and multi-branded e-commerce retailers.

The disposal of discontinued, end of season or excess inventory is an ongoing part of any apparel business, and our operating groups have historically utilized a variety of methods to sell such inventory, including outlet stores in Tommy

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Bahama, e-commerce flash sales in Lilly Pulitzer, and off-price ~~retailers.~~retailers in each operating group. Our focus in disposing of the excess inventory for our lifestyle brands is to do so in a brand appropriate setting and achieve an acceptable margin.

All of our operating groups operate in highly competitive apparel markets in which numerous U.S. and foreign-based apparel firms compete. No single apparel firm or small group of apparel firms dominates the apparel industry, and our direct competitors vary by operating group and distribution channel. We believe the principal competitive factors in the apparel industry are reputation, value, and image of brand names; design; consumer preference; price; quality; marketing; product fulfillment capabilities; and customer service.

The apparel industry is cyclical and very dependent upon the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional, domestic and international economic conditions change.

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Increasingly, consumers are choosing 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. We believe the changes in consumer preferences for discretionary spending, the current global economic conditions and economic uncertainty continue to impact the business of each of our operating groups and the apparel industry as a whole.

Due to the imposition by the United States of higher tariffs on apparel and related products manufactured in China, our net sales, cost of goods sold, operating income and net earnings are expected to be impacted in the second half of Fiscal 2019 as well as in Fiscal 2020, to the extent that we are unable to offset the additional costs by moving product sourcing from China, successfully negotiating price reductions from third party manufacturers or increasing sales prices on select products. During Fiscal 2018, approximately 54% of our apparel and related products were from producers located in China. During Fiscal 2019, we have made progress in shifting production from China, particularly for goods to be received late in the fiscal year, resulting in our expectation that the proportion of products sourced from China in Fiscal 2019 will be slightly lower than in Fiscal 2018. We anticipate more meaningful reductions in the proportion of our apparel and related products sourced from China in Fiscal 2020.

We believe the retail apparel market is evolving very rapidly and in ways that are having a disruptive impact on traditional fashion retailing. The application of technology, including the internet and mobile devices, to fashion retail provides consumers increasing access to multiple, responsive distribution platforms and an unprecedented ability to communicate directly with brands and retailers. As a result, consumers have more information and greater control over information they receive as well as broader, faster and cheaper access to goods than ever before. This, along with the coming of age of the “millennial” generation, is revolutionizing the way that consumers shop for fashion and other ~~goods. The evidence of the evolution is apparent with~~goods, which continues to be evidenced by weakness and store closures for certain department stores and mall-based retailers, decreased consumer retail traffic, a more promotional retail environment, expansion of off-price and discount retailers, and a shift from bricks and mortar to internet purchasing. These changes may require that brands and retailers approach their operations, including marketing and advertising, very differently than historical ~~practices.~~

practices and may result in increased operating costs and capital investments to generate growth or even maintain their current sales levels.

While this evolution in the fashion retail industry presents 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. We believe our brands have true competitive advantages in this new retailing paradigm, and we are 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.

Specifically, we believe our lifestyle brands have opportunities for long-term growth in our direct to consumer businesses. We anticipate increased sales in our e-commerce operations, which are expected to grow at a faster rate than comparable sales through our bricks and mortar ~~comparable~~ store ~~sales.~~locations. We also believe growth can be achieved through prudent expansion of bricks and mortar full-price retail store and restaurant operations and modest comparable full-price retail store and restaurant sales increases. ~~Despite the changes in the retail environment, we~~We expect there will continue to be desirable locations to add new retail stores to our portfolio, but at a measured and selective pace, and believe that an effective bricks and mortar retail strategy is an important component to the e-commerce operations for ~~additional stores.~~

long-term success in today’s retail apparel environment.

We believe our lifestyle brands have an opportunity for modest sales increases in their wholesale businesses in the long term. However, we must be diligent in our effort to avoid compromising the integrity of our brands by maintaining or growing sales with wholesale customers that may not be aligned with our long-term strategy. This is particularly important with the challenges in the department store channel, which represented approximately ~~14%~~12% of our consolidated net sales in Fiscal ~~2017,~~2018, compared to approximately ~~16%~~14% in Fiscal ~~2016.~~2017. The management of wholesale distribution for our lifestyle brands resulted in a decrease in wholesale sales in ~~the First Nine Months of~~ Fiscal ~~2018 and~~2018. While we anticipate modest growth in our wholesale sales in Fiscal 2019, there could ~~result in~~be additional reductions in wholesale sales in future ~~periods,~~years, as ~~we may decrease~~ the amount of sales to certain wholesale accounts ~~by reducing~~could decrease if the number of doors that carry our product ~~reducing~~decreases, the volume sold for a particular door is reduced or ~~exiting~~ the account is exited altogether. We anticipate that sales increases in our wholesale businesses in the long term will stem primarily from certain current customers adding within their existing door count and increasing their online business; increased sales to online retailers; and our selective addition of new

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wholesale customers who generally present and merchandise our products in a way that is consistent with our full-price, direct to consumer distribution strategy. We also believe that there are opportunities for modest sales growth for Lanier Apparel in the future through new product programs and licenses.

We believe we must continue to invest in our lifestyle brands to take advantage of their long-term growth opportunities. Investments include capital expenditures primarily related to the direct to consumer operations, such as technology enhancements, e-commerce initiatives and retail store and restaurant build-out for new, relocated or remodeled locations, as well as distribution center and administrative office expansion initiatives. Additionally, we anticipate increased ~~advertising,~~

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employment and other administrative function costs to support ongoing business operations and fuel future sales growth. Advertising expense in the First Nine Months of Fiscal 2018 increased relative to the First Nine Months of Fiscal 2017 for each of our brands with an advertising spend focusing on new consumer acquisition as well as consumer retention and engagement.

In the midst of the changes in our industry, an important initiative for us ~~in Fiscal 2017 was~~has been to increase the profitability of the Tommy Bahama business. These initiatives generally ~~focused~~focus on increasing gross margin and operating margin through efforts such as: product cost reductions; selective price increases; reducing inventory purchases; redefining our approach to inventory clearance; effectively managing controllable and discretionary operating expenses; taking a more conservative approach to retail store openings and lease renewals; and ~~continuing our efforts to reduce~~improving Asia-Pacific operating ~~losses. Progress was~~results. While we have made progress on these initiatives in ~~Fiscal 2017. In addition, in~~recent years, improving the ~~First Nine Months of Fiscal 2018, we made additional progress, including the reduction of Asia-Pacific losses with the restructuring~~profitability of the Tommy Bahama ~~Japan operations as discussed in Note 6.~~

business will remain a primary focus.

We continue to believe it is important to maintain a strong balance sheet and liquidity. We believe positive cash flow from operations, coupled with the strength of our balance sheet and liquidity, will provide us with sufficient resources to fund future investments in our owned lifestyle brands. While we believe we have significant opportunities to appropriately deploy our capital and resources in our existing lifestyle brands, our strong cash flows from operations and ample borrowing capacity provide us the ability to continue to evaluate opportunities to add additional lifestyle brands to our portfolio in the future if we identify appropriate targets that meet our investment criteria. ~~With~~While we are actively exploring acquisition opportunities, investment opportunities for the ~~evolving fashion retail environment,~~types of large brands with the attributes that we desire are not always available at an acceptable price. Therefore, our interest in acquiring smaller brands and earlier stage companies ~~is evolving,~~has increased in recent years, particularly in businesses where we may have the opportunity to more fully integrate the brand into our existing infrastructure and shared services functions.

Currently, the market for desirable lifestyle brands, both large and small, is very competitive and the expectations of sellers are high relative to the historical operating results and opportunities of the brand.

Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could impact our business are described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for Fiscal ~~2017.~~

2018.

The following table sets forth our consolidated operating results ~~from continuing operations~~ (in thousands, except per share amounts) for the First Nine Months of Fiscal ~~2018~~2019 compared to the First Nine Months of Fiscal ~~2017:~~

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Net sales $ 808,931
$ 793,032
Operating income $ 68,591
$ 67,485
Net earnings $ 49,612
$ 40,958
Net earnings per diluted share $ 2.95
$ 2.45

2018


	First Nine Months
	Fiscal 2019		Fiscal 2018
Net sales	$	825,194	$	808,931
Operating income	$	72,595	$	68,591
Net earnings	$	53,161	$	49,612
Net earnings per diluted share	$	3.15	$	2.95
Weighted average shares outstanding - diluted		16,896		16,826

The higher net earnings per diluted share in the First Nine Months of Fiscal ~~2018~~2019 was due to (1) the lower effective tax rate resulting from U.S. Tax Reform as discussed in Note 4, (2) the improved operating results in Corporate and Other, primarily due to the favorable impact of LIFO accounting and the operations of TBBC, (3) increased operating income in Southern Tide primarily due to higher ~~net sales, (4) lower interest expense and (5) improved~~ operating income in Lilly ~~Pulitzer. These items were partially offset by (1) lower operating income in Lanier Apparel, primarily due to lower sales, and (2) lower operating income in~~Pulitzer, Tommy Bahama ~~primarily due to increased advertising expense~~ and ~~Tommy Bahama Japan restructuring charges as discussed in Note 6. Changes in operating results by group are discussed below.~~

Southern Tide and lower interest expense.

COMPARABLE ~~STORE~~ SALES

We often disclose comparable ~~store~~ sales in order to provide additional information regarding changes in our results of operations between periods. Our disclosures of comparable ~~store~~ sales include net sales from full-price retail stores and ~~our~~ e-commerce sites, excluding sales associated with e-commerce flash clearance sales. We believe that the inclusion of both ~~our~~

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full-price retail stores and e-commerce sites in the comparable ~~store~~ sales disclosures is a more meaningful way of reporting our comparable ~~store~~ 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 channel. For our comparable ~~store~~ sales disclosures, we exclude (1) outlet store sales, warehouse sales and e-commerce flash clearance 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) restaurant sales, as we do not currently believe that the inclusion of restaurant sales in our comparable ~~store~~ sales disclosures is meaningful in assessing our consolidated results of operations. Comparable ~~store~~ sales information reflects net sales, including shipping and handling revenues, if any, associated with product sales.

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For purposes of our disclosures, ~~we consider a~~ comparable ~~store to be, in addition to our~~sales consists of sales through e-commerce sites aand any physical full-price retail store that was owned and open as of the beginning of the prior ~~fiscal~~ 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 ~~resulting~~which would result in ~~the store being closed~~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 ~~was~~is significantly different from the prior retail ~~space, or (4) a closing or opening of a Tommy Bahama restaurant adjacent to the full-price retail store.~~space. For those stores which are excluded ~~from comparable stores~~ based on the preceding sentence, the stores continue to be excluded from comparable ~~store~~ sales until the criteria for a new store is met subsequent to the remodel, relocation, ~~restaurant closing or opening,~~ or other event. A retail store that is remodeled will generally continue to be included in our comparable ~~store~~ sales metrics as a store is not typically closed for longer than a two-week period during a remodel; however, a retail store that is relocated generally will not be included in our comparable ~~store~~ 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, are excluded from ~~the definition of comparable store sales.~~

Because Fiscal 2017 had 53 weeks, each fiscal quarter in Fiscal 2018 starts and ends one calendar week later than in Fiscal 2017 (e.g., the Third Quarter of Fiscal 2018 is the period from August 5, 2018 to November 3, 2018, inclusive, while the Third Quarter of Fiscal 2017 is the period from July 30, 2017 to October 28, 2017, inclusive). Due to the significant seasonality of our direct to consumer sales, particularly during the first and second fiscal quarters each year, as well as the timing of our merchandising and marketing initiatives, the one-week shift between Fiscal 2017 and Fiscal 2018 may significantly impact our comparable store sales if presented on a fiscal period basis. To provide a more accurate assessment of our Fiscal 2018 comparable store productivity, we are presenting our Fiscal 2018 comparable store sales on a calendar-adjusted basis by comparing the Fiscal 2018 period to the comparable calendar period in the preceding year, rather than the comparable fiscal period in the preceding year. By way of example, our Third Quarter of Fiscal 2018 comparable store sales presentation compares the Third Quarter of Fiscal 2018 to the 13-week period ended November 4, 2017. Except as otherwise specified, all references to comparable store sales during Fiscal 2018 contained in this report refer to the calendar-adjusted comparable store sales as opposed to the fiscal period comparable store sales.

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

STORE COUNT

The table below provides store count information for Tommy Bahama and Lilly Pulitzer as of the dates specified.

November 3, 2018 February 3, 2018 October 28, 2017 January 28, 2017
Tommy Bahama Full-Price Retail Stores (1) 113 110 111 111
Tommy Bahama Retail-Restaurant Locations 17 18 18 17
Tommy Bahama Outlet Stores 38 38 38 40
Total Tommy Bahama Retail Locations 168 166 167 168
Lilly Pulitzer Full-Price Retail Stores 60 57 57 40
Total Oxford Retail Locations 228 223 224 208

(1) Tommy Bahama Full-Price Retail Stores, as of November 3, 2018, includes the Tommy Bahama Ginza location. This location was included in Tommy Bahama Retail-Restaurant Locations in the previous reported periods, prior to the closure of of the restaurant portion of the location in the Third Quarter of Fiscal 2018. The retail portion of the Ginza location is scheduled to close in the Fourth Quarter of Fiscal 2018.


	November 2,	February 2,	November 3,	February 3,
	2019	2019	2018	2018
Tommy Bahama retail stores	111	113	113	110
Tommy Bahama retail-restaurant locations	17	17	17	18
Tommy Bahama outlets	37	37	38	38
Total Tommy Bahama locations	165	167	168	166
Lilly Pulitzer retail stores	63	62	60	57
Total Oxford locations	228	229	228	223

RESULTS OF OPERATIONS

THIRD QUARTER OF FISCAL ~~2018~~2019 COMPARED TO THIRD QUARTER OF FISCAL ~~2017~~

~~Table of Contents~~

~~change of the data as compared to the same period of the prior year. We have calculated all percentages based on actual data, and percentage columns may not add due to rounding.~~

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Net sales $ 233,662
100.0 % $ 235,960
100.0 % $ (2,298 ) (1.0 )%
Cost of goods sold 104,383
44.7 % 110,784
47.0 % (6,401 ) (5.8 )%
Gross profit $ 129,279
55.3 % $ 125,176
53.0 % $ 4,103
3.3 %
SG&A 128,687
55.1 % 127,091
53.9 % 1,596
1.3 %
Royalties and other operating income 3,113
1.3 % 3,039
1.3 % 74
2.4 %
Operating income $ 3,705
1.6 % $ 1,124
0.5 % $ 2,581
229.6 %
Interest expense, net 489
0.2 % 683
0.3 % (194 ) (28.4 )%
Earnings before income taxes $ 3,216
1.4 % $ 441
0.2 % $ 2,775
629.3 %
Income taxes 1,355
0.6 % (631 ) (0.3 )% 1,986
NM
Net earnings $ 1,861
0.8 % $ 1,072
0.5 % $ 789
73.6 %

2018

The discussion and tables below compare ~~certain line items included in~~ our statements of operations for the Third Quarter of Fiscal ~~2018~~2019 to the Third Quarter of Fiscal ~~2017.~~2018. 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 may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company. ~~Unless otherwise indicated, all references~~

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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 ~~assets, liabilities, revenues, expenses or other information in this report reflect continuing operations.~~

the same period of the prior year.


	Third Quarter
	Fiscal 2019				Fiscal 2018				$ Change		% Change

Net sales	$	241,221	100.0	%	$	233,662	100.0	%	$	7,559	3.2	%
Cost of goods sold		108,241	44.9	%		104,383	44.7	%		3,858	3.7	%
Gross profit	$	132,980	55.1	%	$	129,279	55.3	%	$	3,701	2.9	%
SG&A		134,231	55.6	%		128,687	55.1	%		5,544	4.3	%
Royalties and other operating income		3,845	1.6	%		3,113	1.3	%		732	23.5	%
Operating income	$	2,594	1.1	%	$	3,705	1.6	%	$	(1,111)	(30.0)	%
Interest expense, net		81	0.0	%		489	0.2	%		(408)	(83.4)	%
Earnings before income taxes	$	2,513	1.0	%	$	3,216	1.4	%	$	(703)	(21.9)	%
Income taxes		845	0.4	%		1,355	0.6	%		(510)	(37.6)	%
Net earnings	$	1,668	0.7	%	$	1,861	0.8	%	$	(193)	(10.4)	%

Net Sales

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Tommy Bahama $ 123,130
$ 123,895
$ (765 ) (0.6 )%
Lilly Pulitzer 68,213
59,244
8,969
15.1 %
Lanier Apparel 29,037
43,110
(14,073 ) (32.6 )%
Southern Tide 9,496
9,217
279
3.0 %
Corporate and Other 3,786
494
3,292
NM
Total net sales $ 233,662
$ 235,960
$ (2,298 ) (1.0 )%


	Third Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Tommy Bahama	$	127,023	$	123,130	$	3,893	3.2	%
Lilly Pulitzer		71,659		68,213		3,446	5.1	%
Lanier Apparel		29,377		29,037		340	1.2	%
Southern Tide		9,102		9,496		(394)	(4.1)	%
Corporate and Other		4,060		3,786		274	7.2	%
Total net sales	$	241,221	$	233,662	$	7,559	3.2	%

Consolidated net sales ~~decreased $2~~increased $8 million, or 1%3%, in the Third Quarter of Fiscal ~~2018.~~2019. The ~~decrease~~increase in consolidated net sales was primarily driven by (1) a $16 million net decrease in wholesale sales, driven by a decrease in Lanier Apparel, and (2) a $1 million decrease in direct to consumer sales at comparable stores resulting from the calendar shift between Fiscal 2017 and Fiscal 2018. These decreases were partially offset by (1) a $5$6 million, or 7%6%, ~~calendar-adjusted~~ comparable ~~store~~ sales increase ~~from $73~~to $91 million in the ~~13-week period ended November 4, 2017 to $79~~Third Quarter of Fiscal 2019 from $85 million in the Third Quarter of Fiscal 2018, ~~reflecting strong~~with comparable ~~store~~ sales increases in both Tommy Bahama and Lilly Pulitzer, (2) a $4$2 million increase in ~~our~~ off-price direct to consumer ~~clearance channels,~~sales including ~~an increase in~~ the Lilly Pulitzer e-commerce flash clearance ~~sales partially offset by slightly lower outlet store sales in Tommy Bahama,~~sale, (3) ~~$3 million of e-commerce and wholesale sales for TBBC, which we acquired in the Fourth Quarter of Fiscal 2017 and (4)~~ an incremental net sales increase of $2 million associated with ~~the operation of~~ non-comp ~~full-price~~ retail ~~stores,~~store operations primarily resulting from an increase at Lilly Pulitzer and (4) a $1 million increase in ~~Lilly Pulitzer. By way of comparison, on~~restaurant sales in Tommy Bahama. These increases were partially offset by a ~~fiscal period basis, consolidated comparable store sales increased 6%~~$2 million net decrease in ~~the Third Quarter of Fiscal 2018 relative to the Third Quarter of Fiscal 2017.~~wholesale sales. The changes in net sales by operating group are discussed below.

The following table presents the proportion of our consolidated net sales by distribution channel for each period presented:

~~Table of Contents~~

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017
Full-price retail stores and outlets 35 % 33 %
E-commerce 24 % 20 %
Restaurant 7 % 7 %
Wholesale 34 % 40 %
Total 100 % 100 %


	Third Quarter
	Fiscal 2019		Fiscal 2018
Retail	35	%	35	%
E-commerce	26	%	24	%
Restaurant	7	%	7	%
Wholesale	32	%	34	%
Total	100	%	100	%

Tommy Bahama:

~~The~~

Tommy Bahama net sales ~~decrease of $1~~increased $4 million, or 1%3%, in the Third Quarter of Fiscal 2019. The increase in Tommy Bahama net sales was primarily driven by (1) a $2 million decrease in wholesale sales, including reductions in off-price wholesale sales, (2) a $1 million decrease in non-comp full-price retail stores, reflecting the net sales change for stores that were opened, closed or remodeled during Fiscal 2017 or Fiscal 2018 and (3) modestly lower sales in Tommy Bahama's off-price directdue to ~~consumer channels and restaurants. These decreases were partially offset by~~ (1) a $3 million, or 5%6%, comparable sales increase ~~in calendar-adjusted comparable store sales from $54~~to $58 million in the ~~13-week period ended November 4, 2017 to $56~~Third Quarter of Fiscal 2019 from $55 million in the Third Quarter of Fiscal 2018 ~~driven by strong growth in e-commerce sales,~~ and (2) a $1 million increase in ~~direct to consumer~~restaurant

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sales primarily reflecting the net impact of sales at remodeled, opened and closed restaurants, as well as increased sales in existing restaurants. These increases were partially offset by a $1 million decrease in wholesale sales, reflecting lower full-price wholesale sales and higher off-price wholesale sales. Sales in outlets and non-comp retail stores were generally comparable stores resulting from the calendar shift between Fiscal 2017 and Fiscal 2018. By way of comparison, on a fiscal period basis, Tommy Bahama comparable store sales increased 6% in the Third Quarter of Fiscal 2018 relative to the Third Quarter of Fiscal 2017.period-over-period. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017
Full-price retail stores and outlets 46 % 47 %
E-commerce 14 % 11 %
Restaurant 13 % 13 %
Wholesale 27 % 29 %
Total 100 % 100 %


	Third Quarter
	Fiscal 2019		Fiscal 2018
Retail	46	%	46	%
E-commerce	14	%	14	%
Restaurant	14	%	13	%
Wholesale	26	%	27	%
Total	100	%	100	%

Lilly Pulitzer:

~~The~~

Lilly Pulitzer net sales ~~increase of $9~~increased $3 million, or ~~15%~~5%, in the Third Quarter of Fiscal 2019. The increase in Lilly Pulitzer net sales was primarily ~~a result of~~driven by (1) a $5$2 million increase in e-commerce flash clearance sales, with the September ~~2018 sale~~2019 “After Party Sale” generating ~~$29~~$31 million of net sales, (2) a $3$2 million, or ~~15%~~6%, comparable sales increase ~~in calendar-adjusted comparable store sales from $18~~to $28 million in the ~~13-week period ended November 4, 2017 to $21~~Third Quarter of Fiscal 2019 from $27 million in the Third Quarter of Fiscal 2018, ~~with increases in both e-commerce~~ and ~~retail store comparable store sales,~~ (3) an incremental net sales increase of $3$1 million associated with ~~the operation of~~ non-comp ~~full-price~~ retail stores, including stores opened by Lilly Pulitzer and the Signature Stores acquired in Fiscal 2017, and (4) a $1 million increase in wholesale sales as increased sales to Signature Stores and specialty stores offset the decrease in sales to department stores.store operations. These increases were partially offset by a $2$1 million decrease in ~~direct to consumer~~wholesale sales ~~at comparable stores resulting from the calendar shift between Fiscal 2017~~reflecting lower full-price and ~~Fiscal 2018. By way of comparison, on a fiscal period basis, Lilly Pulitzer comparable store sales increased 5% in the Third Quarter of Fiscal 2018 relative to the Third Quarter of Fiscal 2017.~~off-price wholesale sales. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017
Full-price retail stores 35 % 35 %
E-commerce 53 % 53 %
Wholesale 12 % 12 %
Total 100 % 100 %


	Third Quarter
	Fiscal 2019		Fiscal 2018
Retail	35	%	35	%
E-commerce	55	%	53	%
Wholesale	10	%	12	%
Total	100	%	100	%

Lanier Apparel:

The Lanier Apparel net sales ~~decrease~~increase of $14 million, or 33%, was primarily due to (1) lower volume in various programs, including the impact of softness in the replenishment of certain programs, (2) the exit from certain programs, including the impact of customers who filed for bankruptcy in Fiscal 2018, (3) a shift in timing from the third quarter to the second and

~~Table of Contents~~

~~fourth quarter for certain shipments, including significant warehouse club shipments that occurred~~1% in the Third Quarter of Fiscal ~~2017, and (4) the prior year including initial shipments~~2019 reflects increases in certain programs, including increased sales in the private label, Cole Haan and ~~branded programs.~~Duck Head businesses. These ~~decreases~~increases were partially offset by ~~increased~~decreased volume in ~~other~~various seasonal, in-stock and replenishment programs including shipments of Cole Haan licensed tailored clothing. The timing of Lanier Apparel programs, including warehouse club shipments, can vary significantly from year to year. For the full year, we expect net sales at Lanier Apparel in Fiscal 2018 to be modestly lower than Fiscal 2017 net sales.

for certain branded businesses.

Southern Tide:

~~The~~

Southern Tide net sales ~~increase~~decreased 4% in the Third Quarter of ~~3% was~~Fiscal 2019 due to ~~increased sales in both the wholesale and e-commerce channels of distribution. The increased~~lower wholesale sales ~~reflect~~partially offset by increased e-commerce sales. The lower wholesale sales ~~to (1) Signature Stores, including those opened in the last year, (2) department stores and (3)~~primarily resulted from lower off-price ~~retailers.~~wholesale sales. The following table presents the proportion of net sales by distribution channel for Southern Tide for each period presented:


	Third Quarter
	Fiscal 2019		Fiscal 2018
E-commerce	19	%	16	%
Wholesale	81	%	84	%
Total	100	%	100	%

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Third Quarter Fiscal 2018 Third Quarter Fiscal 2017
E-commerce 16 % 16 %
Wholesale 84 % 84 %
Total 100 % 100 %

Corporate and Other:

Corporate and Other net sales primarily consist of the net sales of TBBC ~~which include e-commerce and wholesale operations,~~ and our Lyons, Georgia distribution center operations. The increase in net sales was ~~primarily~~ due to ~~the December 2017 acquisition of~~sales growth in TBBC.

Gross Profit

The tables below present gross profit by operating group and in total for the Third Quarter of Fiscal ~~2018~~2019 and the Third Quarter of Fiscal ~~2017,~~2018, as well as the change between those two periods and gross margin by operating group and in ~~total for the Third Quarter of Fiscal 2018 and the Third Quarter of Fiscal 2017.~~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.

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Tommy Bahama $ 75,738
$ 74,279
$ 1,459
2.0 %
Lilly Pulitzer 38,290
32,891
5,399
16.4 %
Lanier Apparel 8,580
13,191
(4,611 ) (35.0 )%
Southern Tide 4,475
4,884
(409 ) (8.4 )%
Corporate and Other 2,196
(69 ) 2,265
NM
Total gross profit $ 129,279
$ 125,176
$ 4,103
3.3 %
LIFO charge included in Corporate and Other $ (57 ) $ 476

Inventory step-up charges included in Lilly Pulitzer $ —
$ 1,086

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017
Tommy Bahama 61.5 % 60.0 %
Lilly Pulitzer 56.1 % 55.5 %
Lanier Apparel 29.5 % 30.6 %
Southern Tide 47.1 % 53.0 %
Corporate and Other NM
NM
Consolidated gross margin 55.3 % 53.0 %


	Third Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Tommy Bahama	$	76,467	$	75,738	$	729	1.0	%
Lilly Pulitzer		40,954		38,290		2,664	7.0	%
Lanier Apparel		8,628		8,580		48	0.6	%
Southern Tide		4,395		4,475		(80)	(1.8)	%
Corporate and Other		2,536		2,196		340	15.5	%
Total gross profit	$	132,980	$	129,279	$	3,701	2.9	%
LIFO adjustments in Corporate and Other	$	(35)	$	(57)


	Third Quarter
	Fiscal 2019		Fiscal 2018
Tommy Bahama	60.2	%	61.5	%
Lilly Pulitzer	57.2	%	56.1	%
Lanier Apparel	29.4	%	29.5	%
Southern Tide	48.3	%	47.1	%
Corporate and Other	NM		NM
Consolidated gross margin	55.1	%	55.3	%

The increase in consolidated gross profit ~~on lower net sales,~~ in the Third Quarter of Fiscal ~~2018~~2019 was due to ~~a higher~~increased net sales partially offset by lower gross margin. The ~~improved~~lower consolidated gross margin reflects lower gross margin in Tommy Bahama and Lanier Apparel which was partially offset by (1) improved gross margin in Lilly Pulitzer and Southern Tide and (2) a change in sales mix as Tommy Bahama and Lilly Pulitzer represented a larger proportion of our net sales. Changes in gross margin by operating group are discussed below.

Tommy Bahama:

The decrease in gross margin for Tommy Bahama was primarily driven by (1) lower gross margin in the wholesale business reflecting a larger proportion of off-price wholesale sales as well as lower gross margins on wholesale sales and (2) lower gross margin in the direct to consumer business as a greater proportion of sales were associated with Tommy Bahama promotional events including our Friends and Family, Boracay pant and loyalty award card events.

Lilly Pulitzer:

The increase in gross margin for Lilly Pulitzer was primarily due to (1) a change in sales mix as ~~Lilly Pulitzer~~direct to consumer sales represented a larger proportion of net sales and (2) improved gross margin in the full-price direct to consumer, e-commerce flash clearance sale and wholesale channels of distribution.

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Lanier Apparel:

The decrease in gross margin for Lanier Apparel was primarily due to a change in sales mix as a greater proportion ~~and Lanier Apparel represented a lower proportion,~~ of ~~net~~ sales in the Third Quarter of Fiscal 2018, (2) improved gross margins in Tommy Bahama, (3) the Third Quarter of Fiscal 2017 including inventory step-up charges in Lilly Pulitzer, with no such charges in the Third Quarter of Fiscal 2018, and (4) the Third Quarter of Fiscal 2017 including a LIFO accounting charge, with a small LIFO accounting credit in the Third Quarter of Fiscal 2018. These favorable items that impacted consolidated gross margin2019 were ~~partially offset by (1) lower gross margins in~~ related to private label programs.

Southern ~~Tide and Lanier Apparel and (2) a change in sales mix within Lilly Pulitzer as e-commerce flash clearance sales represented a greater proportion of Lilly Pulitzer net sales.~~

~~Tommy Bahama:~~

Tide:

The increase in gross margin for ~~Tommy Bahama~~Southern Tide was ~~driven by (1) improved gross margins in both the direct~~primarily due to consumer and wholesale businesses, reflecting progress in our initiatives to improve initial gross margins, including selective price increases as well as product cost reductions, and improved gross margins on off-price sales, and (2) a change in sales mix as e-commerce sales represented a greater proportion of ~~Tommy Bahama~~net sales ~~in the Third Quarter of Fiscal 2018.~~

~~Lilly Pulitzer:~~

The increase in gross margin for Lilly Pulitzer was driven by the Third Quarter of Fiscal 2017 including inventory step-up charges associated with the acquisition of 12 Lilly Pulitzer Signature Stores during Fiscal 2017 with no such charges in the Third Quarter of Fiscal 2018. Excluding the impact of the inventory step-up charges, Lilly Pulitzer gross margins decreased primarily as a result of (1) a change in sales mix as the e-commerce flash clearance sale represented a larger proportion of Lilly Pulitzer sales in the Third Quarter of Fiscal 2018 and (2) lower gross margins on the e-commerce flash clearance sale, which still generated gross margin in excess of 40%, and in the wholesale business due to more off-price sales.

~~Lanier Apparel:~~

The decrease in gross margin for Lanier Apparel was primarily due to (1) the Third Quarter of Fiscal 2018 including more significant charges for certain customer allowance, cooperative advertising and other amounts related to certain replenishment and other programs and (2) the Third Quarter of Fiscal 2018 continuing to face gross margin pressures.

~~Southern Tide:~~

The decrease in gross margin for Southern Tide was primarily due to (1) higher inventory markdowns, (2) increased wholesale customer discounts and allowances, including allowances for co-op advertising and fixtures, (3) a change in mix as Signature Stores, department stores and off-price wholesale sales represented a ~~greater~~lower proportion of ~~sales in the Third Quarter of Fiscal 2018 and (4) lower gross margins on off-price~~net sales.

Corporate and Other:

The gross profit in Corporate and Other primarily reflects (1) the gross profit of TBBC, (2) the gross profit of our Lyons, Georgia distribution center and (3) the impact of LIFO accounting adjustments. The primary driver for the ~~improved~~higher gross profit was ~~(1) the Third Quarter of Fiscal 2018 including~~ the gross profit associated with the increased net sales of ~~TBBC and (2) the net favorable impact of LIFO accounting in the Third Quarter of Fiscal 2018 compared to the Third Quarter of Fiscal 2017.~~TBBC. The LIFO accounting impact in Corporate and Other in each period primarily reflects ~~the sale of~~(1) a charge in Corporate and Other when inventory that had been marked down to the estimated net realizable value in an operating group in a prior ~~periods~~period is ultimately sold or (2) a credit in Corporate and Other when inventory has been marked down to the estimated net realizable value in an operating group in the current period, but ~~generally reversed in Corporate and Other~~the inventory has not been sold as ~~part~~ of ~~LIFO accounting.~~

period end.

SG&A

~~Table of Contents~~

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
SG&A $ 128,687
$ 127,091
$ 1,596
1.3 %
SG&A as % of net sales 55.1 % 53.9 %

Amortization of Tommy Bahama Canadian intangible assets $ 378
$ 391

Amortization of Lilly Pulitzer Signature Store intangible assets $ 93
$ 90

Transaction/integration costs associated with Lilly Pulitzer Signature Store acquisitions $ —
$ 563

Amortization of Southern Tide intangible assets $ 72
$ 72


	Third Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change
SG&A	$	134,231		$	128,687		$	5,544	4.3	%
SG&A (as a % of net sales)		55.6	%		55.1	%
Amortization of Tommy Bahama Canada intangible assets	$	—		$	378
Amortization of Lilly Pulitzer Signature Store intangible assets	$	80		$	93
Amortization of Southern Tide intangible assets	$	73		$	72

The ~~increase in~~higher SG&A in the Third Quarter of Fiscal ~~2018~~2019 was primarily due to (1) ~~$1 million of incremental~~increases in SG&A ~~associated with TBBC and (2)~~to support the businesses, including increased salaries, ~~and~~ wages, ~~occupancy~~employee benefits, variable costs and other operating expenses in our ongoing operations, (2) a $1 million increase in advertising expense and (3) incremental SG&A associated with the cost of operating additional direct to consumer ~~and wholesale operations.~~locations. These increases ~~in SG&A~~ were partially offset by $1a $2 million ~~of lower~~reduction in incentive compensation amounts.

Royalties and other operating income

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Royalties and other operating income $ 3,113
$ 3,039
$ 74
2.4 %


	Third Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Royalties and other operating income	$	3,845	$	3,113	$	732	23.5	%

Royalties and other operating income primarily reflects income received from third parties from the licensing of our brands. The increased royalties and other income in the Third Quarter of Fiscal 2019 reflects increased royalty income in both Tommy Bahama and Lilly ~~Pulitzer and Southern Tide brands.~~Pulitzer.

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Operating income (loss)

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Tommy Bahama $ (5,141 ) $ (5,872 ) $ 731
12.4 %
Lilly Pulitzer 9,576
4,952
4,624
93.4 %
Lanier Apparel 2,261
5,615
(3,354 ) (59.7 )%
Southern Tide 492
1,016
(524 ) (51.6 )%
Corporate and Other (3,483 ) (4,587 ) 1,104
24.1 %
Total operating income $ 3,705
$ 1,124
$ 2,581
229.6 %
LIFO charge included in Corporate and Other $ (57 ) $ 476

Inventory step-up charges included in Lilly Pulitzer $ —
$ 1,086

Amortization of Tommy Bahama Canadian intangible assets $ 378
$ 391

Amortization of Lilly Pulitzer Signature Store intangible assets $ 93
$ 90

Transaction/integration costs associated with Lilly Pulitzer Signature Store acquisitions $ —
$ 563

Amortization of Southern Tide intangible assets $ 72
$ 72


	Third Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Tommy Bahama	$	(7,739)	$	(5,141)	$	(2,598)	(50.5)	%
Lilly Pulitzer		10,988		9,576		1,412	14.7	%
Lanier Apparel		1,952		2,261		(309)	(13.7)	%
Southern Tide		526		492		34	6.9	%
Corporate and Other		(3,133)		(3,483)		350	10.0	%
Total Operating Income	$	2,594	$	3,705	$	(1,111)	(30.0)	%
LIFO adjustments in Corporate and Other	$	(35)	$	(57)
Amortization of Tommy Bahama Canada intangible assets	$	—	$	378
Amortization of Lilly Pulitzer Signature Store intangible assets	$	80	$	93
Amortization of Southern Tide intangible assets	$	73	$	72

The ~~higher~~decrease in operating income in the Third Quarter of Fiscal ~~2018 and the Third Quarter of Fiscal 2017~~2019 was primarily due to higher SG&A and lower gross margin, partially offset by the impact of higher net sales. On an operating group basis, the decrease in operating income reflects lower operating results in Tommy Bahama and Lanier Apparel partially offset by improved operating results in Lilly Pulitzer and Corporate and ~~Other and Tommy Bahama, partially offset by lower operating income in Lanier Apparel and Southern Tide.~~Other. Changes in operating income (loss) by operating group are discussed below.

Tommy Bahama:

~~Table of Contents~~

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Net sales $ 123,130
$ 123,895
$ (765 ) (0.6 )%
Gross margin 61.5 % 60.0 %

Operating income $ (5,141 ) $ (5,872 ) $ 731
12.4 %
Operating income as % of net sales (4.2 )% (4.7 )%

Amortization of Tommy Bahama Canadian intangible assets $ 378
$ 391


	Third Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	127,023		$	123,130		$	3,893	3.2	%
Gross profit	$	76,467		$	75,738		$	729	1.0	%
Gross margin		60.2	%		61.5	%
Operating income	$	(7,739)		$	(5,141)		$	(2,598)	(50.5)	%
Operating income as % of net sales		(6.1)	%		(4.2)	%
Amortization of Tommy Bahama Canada intangible assets	$	—		$	378

The ~~improved~~larger operating ~~results~~loss for Tommy Bahama ~~were~~was primarily due to ~~improved~~higher SG&A and lower gross margin, partially offset by ~~a modest increase in~~increased net sales and royalty income. The higher SG&A ~~and lower net sales. The increased SG&A primarily~~for the Third Quarter of Fiscal 2019 reflects increased salaries, ~~and~~ wages, ~~occupancy~~employee benefits, variable costs and other operating expenses in our ongoing ~~direct to consumer and wholesale~~ operations, partially offset by lower ~~SG&A in non-comp direct to consumer retail locations.~~

incentive compensation amounts.

Lilly Pulitzer:


	Third Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	71,659		$	68,213		$	3,446	5.1	%
Gross profit	$	40,954		$	38,290		$	2,664	7.0	%
Gross margin		57.2	%		56.1	%
Operating income	$	10,988		$	9,576		$	1,412	14.7	%
Operating income as % of net sales		15.3	%		14.0	%
Amortization of Lilly Pulitzer Signature Store intangible assets	$	80		$	93

Table of Contents

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Net sales $ 68,213
$ 59,244
$ 8,969
15.1 %
Gross margin 56.1 % 55.5 %

Operating income $ 9,576
$ 4,952
$ 4,624
93.4 %
Operating income as % of net sales 14.0 % 8.4 %

Inventory step-up charges included in Lilly Pulitzer $ —
$ 1,086

Amortization of Lilly Pulitzer Signature Store intangible assets $ 93
$ 90

Transaction/integration costs associated with Lilly Pulitzer Signature Store acquisitions $ —
$ 563

The ~~higher~~increase in operating income in Lilly Pulitzer was primarily due to higher net sales, ~~and improved~~ gross margin ~~which were~~and royalty income partially offset by higher SG&A. The higher SG&A ~~was primarily due~~for the Third Quarter of Fiscal 2019 included (1) SG&A increases to support the planned growth of the business, including additional employment costs, (2) a $1 million increase in advertising expense, and (3) $1 million of incremental SG&A associated with the cost of operating additional retail stores, as well as increases in employment costs, which were partially offset by the Third Quarter of Fiscal 2017 including transaction and integration costs associated with Lilly Pulitzer Signature Store acquisitions. The Third Quarter of Fiscal 2017 included $2 million of inventory step-up charges, transaction and integration costs and amortization associated with the acquisition of 12 Signature Stores in Fiscal 2017, with no such amounts in the Third Quarter of Fiscal 2018.

stores.

Lanier Apparel:

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Net sales $ 29,037
$ 43,110
$ (14,073 ) (32.6 )%
Gross margin 29.5 % 30.6 %

Operating income $ 2,261
$ 5,615
$ (3,354 ) (59.7 )%
Operating income as % of net sales 7.8 % 13.0 %


	Third Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	29,377		$	29,037		$	340	1.2	%
Gross profit	$	8,628		$	8,580		$	48	0.6	%
Gross margin		29.4	%		29.5	%
Operating income	$	1,952		$	2,261		$	(309)	(13.7)	%
Operating income as % of net sales		6.6	%		7.8	%

The ~~lower~~decrease in operating income for Lanier Apparel was primarily due to ~~the lower sales and gross margin,~~higher SG&A, partially offset by ~~reduced~~the higher net sales. The higher SG~~&A. The reduced SG~~&A for the Third Quarter of Fiscal 2019 was primarily due to increased selling, shipping and advertising expenses partially offset by lower incentive compensation ~~amounts and lower sales-related variable expenses, including royalties, shipping and advertising.~~

amounts.

Southern Tide:

~~Table of Contents~~

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Net sales $ 9,496
$ 9,217
$ 279
3.0 %
Gross margin 47.1 % 53.0 %

Operating income $ 492
$ 1,016
$ (524 ) (51.6 )%
Operating income as % of net sales 5.2 % 11.0 %
Amortization of Southern Tide intangible assets $ 72
$ 72


	Third Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	9,102		$	9,496		$	(394)	(4.1)	%
Gross profit	$	4,395		$	4,475		$	(80)	(1.8)	%
Gross margin		48.3	%		47.1	%
Operating income	$	526		$	492		$	34	6.9	%
Operating income as % of net sales		5.8	%		5.2	%
Amortization of Southern Tide intangible assets	$	73		$	72

The ~~lower~~increase in operating income for Southern Tide was primarily due to lower SG&A and higher gross margin ~~as discussed above,~~ partially offset by ~~higher~~lower net sales.

The lower SG&A in the Third Quarter of Fiscal 2019 was primarily due to decreased incentive compensation amounts.

Corporate and Other:

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Net sales $ 3,786
$ 494
$ 3,292
NM
Operating loss $ (3,483 ) $ (4,587 ) $ 1,104
24.1 %
LIFO charge included in Corporate and Other $ (57 ) $ 476


	Third Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Net sales	$	4,060	$	3,786	$	274	7.2	%
Gross profit	$	2,536	$	2,196	$	340	15.5	%
Operating loss	$	(3,133)	$	(3,483)	$	350	10.0	%
LIFO adjustments in Corporate and Other	$	(35)	$	(57)

The ~~improved~~smaller operating ~~results~~loss in Corporate and Other ~~were~~was primarily due to ~~(1)~~ the ~~impact of LIFO accounting and (2) the operating income of TBBC.~~

increased net sales.

Interest expense, net

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Interest expense, net $ 489
$ 683
$ (194 ) (28.4 )%


	Third Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Interest expense, net	$	81	$	489	$	(408)	(83.4)	%

Interest expense decreased in the Third Quarter of Fiscal ~~2018~~2019 primarily due to lower average debt outstanding ~~during the Third Quarter of Fiscal 2018 partially offset by~~as well as higher interest ~~rates and higher unused line fees in the Third Quarter~~income.

Table of ~~Fiscal 2018.~~Contents

Income taxes

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017 $ Change % Change
Income taxes $ 1,355
$ (631 ) $ 1,986
NM
Effective tax rate 42.1 % (143.1 )%


	Third Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Income taxes	$	845		$	1,355		$	(510)	(37.6)	%
Effective tax rate		33.6	%		42.1	%

The net impact of discrete items, the results of our foreign operations or other items that impact our income taxes often results in a more significant or unusual impact on the effective tax rate in the third quarter of our fiscal year given the significantly lower operating ~~results~~income during the third quarter as compared to the other quarters of ~~the~~our fiscal year. Thus, the effective tax rate for the third quarter is not indicative of the effective tax rate anticipated for the full year. Tax expense and the effective tax rate for the Third Quarter of Fiscal 2017 included the $1 million net favorable impact of discrete items, primarily related to the impact of certain prior year tax items, with no such discrete items in the Third Quarter of Fiscal 2018.

Our effective tax rate for the full year of Fiscal ~~2018~~2019 is expected to be approximately 26%, which includes the U.S. federal statutory rate of 21% and state income taxes, net of the related federal income tax benefit; the rate differential related to foreign operations; valuation allowances against operating losses and other carryforwards; the excess tax benefit related to restricted stock vesting; and various other items impacting the effective tax rate.

Net earnings

~~Table of Contents~~

Third Quarter Fiscal 2018 Third Quarter Fiscal 2017
Net sales $ 233,662
$ 235,960
Operating income $ 3,705
$ 1,124
Net earnings $ 1,861
$ 1,072
Net earnings per diluted share $ 0.11
$ 0.06
Weighted average shares outstanding - diluted 16,870
16,735


	Third Quarter
	Fiscal 2019		Fiscal 2018
Net sales	$	241,221	$	233,662
Operating income	$	2,594	$	3,705
Net earnings	$	1,668	$	1,861
Net earnings per diluted share	$	0.10	$	0.11
Weighted average shares outstanding - diluted		16,934		16,870

The ~~higher~~lower net earnings per diluted share in the Third Quarter of Fiscal ~~2018~~2019 was primarily due to lower operating results in Tommy Bahama and Lanier Apparel. These lower operating results were partially offset by improved operating results in Lilly Pulitzer and Corporate and Other, lower interest expense and ~~Tommy Bahama, partially offset by~~a lower operating income in Lanier Apparel and Southern Tide as well as less favorable income taxes for the quarter, each as discussed above. Due to the seasonality of our business operations, our third quarter has historically been our smallest net sales, operating income and net earnings quarter in each fiscal year.

effective tax rate.

FIRST NINE MONTHS OF FISCAL ~~2018~~2019 COMPARED TO FIRST NINE MONTHS OF FISCAL ~~2017~~

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. The table also sets forth the dollar change and the percentage change of the data as compared to the same period of the prior year. We have calculated all percentages based on actual data, and percentage columns may not add due to rounding.

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Net sales $ 808,931
100.0 % $ 793,032
100.0 % $ 15,899
2.0 %
Cost of goods sold 336,209
41.6 % 342,477
43.2 % (6,268 ) (1.8 )%
Gross profit $ 472,722
58.4 % $ 450,555
56.8 % $ 22,167
4.9 %
SG&A 414,747
51.3 % 393,193
49.6 % 21,554
5.5 %
Royalties and other operating income 10,616
1.3 % 10,123
1.3 % 493
4.9 %
Operating income $ 68,591
8.5 % $ 67,485
8.5 % $ 1,106
1.6 %
Interest expense, net 1,872
0.2 % 2,355
0.3 % (483 ) (20.5 )%
Earnings before income taxes $ 66,719
8.2 % $ 65,130
8.2 % $ 1,589
2.4 %
Income taxes 17,107
2.1 % 24,172
3.0 % (7,065 ) (29.2 )%
Net earnings $ 49,612
6.1 % $ 40,958
5.2 % $ 8,654
21.1 %

2018

The discussion and tables below compare ~~certain line items included in~~ our statements of operations for the First Nine Months of Fiscal ~~2018~~2019 to the First Nine Months of Fiscal ~~2017.~~2018. 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 may not add due to rounding. Individual line items of our consolidated statements of operations may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company. ~~Unless otherwise indicated, all references~~


	First Nine Months
	Fiscal 2019				Fiscal 2018				$ Change		% Change
Net sales	$	825,194	100.0	%	$	808,931	100.0	%	$	16,263	2.0	%
Cost of goods sold		346,620	42.0	%		336,209	41.6	%		10,411	3.1	%
Gross profit	$	478,574	58.0	%	$	472,722	58.4	%	$	5,852	1.2	%
SG&A		417,448	50.6	%		414,747	51.3	%		2,701	0.7	%
Royalties and other operating income		11,469	1.4	%		10,616	1.3	%		853	8.0	%
Operating income	$	72,595	8.8	%	$	68,591	8.5	%	$	4,004	5.8	%
Interest expense, net		1,171	0.1	%		1,872	0.2	%		(701)	(37.4)	%
Earnings before income taxes	$	71,424	8.7	%	$	66,719	8.2	%	$	4,705	7.1	%
Income taxes		18,263	2.2	%		17,107	2.1	%		1,156	6.8	%
Net earnings	$	53,161	6.4	%	$	49,612	6.1	%	$	3,549	7.2	%

~~Net Sales~~

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Tommy Bahama $ 482,990
$ 483,971
$ (981 ) (0.2 )%
Lilly Pulitzer 208,463
192,045
16,418
8.5 %
Lanier Apparel 72,806
84,314
(11,508 ) (13.6 )%
Southern Tide 34,745
31,254
3,491
11.2 %
Corporate and Other 9,927
1,448
8,479
NM
Total net sales $ 808,931
$ 793,032
$ 15,899
2.0 %

Table of Contents

Net Sales


	First Nine Months
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Tommy Bahama	$	480,623	$	482,990	$	(2,367)	(0.5)	%
Lilly Pulitzer		219,809		208,463		11,346	5.4	%
Lanier Apparel		76,871		72,806		4,065	5.6	%
Southern Tide		35,704		34,745		959	2.8	%
Corporate and Other		12,187		9,927		2,260	22.8	%
Total net sales	$	825,194	$	808,931	$	16,263	2.0	%

Consolidated net sales increased $16 million, or 2%, in the First Nine Months of Fiscal ~~2018.~~2019. The increase in consolidated net sales was primarily driven by (1) a ~~$17~~$14 million, or 5%4%, ~~calendar-adjusted~~ comparable ~~store~~ sales increase ~~from $335~~to $388 million in the ~~39-week period ended November 4, 2017 to $353~~First Nine Months of Fiscal 2019 from $375 million in the First Nine Months of Fiscal 2018, ~~driven by strong~~with comparable ~~store~~ sales increases in both Tommy Bahama and Lilly Pulitzer, and (2) an incremental net sales increase of ~~$15~~$6 million associated with ~~the operation of~~ non-comp ~~full-price~~ retail ~~stores, primarily~~store operations, resulting from an increase at Lilly Pulitzer. These increases in ~~Lilly Pulitzer, (3) $8~~net sales were partially offset by (1) a $2 million ~~of e-commerce and wholesale sales for TBBC, which we acquired in the Fourth Quarter of Fiscal 2017, (4) a $3 million increase~~decrease in restaurant sales in Tommy Bahama, (2) a $1 million decrease in wholesale sales and ~~(5)~~(3) a $2$1 million ~~increase~~decrease in ~~net sales through our~~ off-price direct to consumer ~~channels reflecting an increase~~sales as the decrease in Tommy Bahama outlet sales was partially offset by increased Lilly Pulitzer e-commerce flash clearance sales partially offset by lower sales at Tommy Bahama outlets. These increases in consolidated net sales were partially offset by a $31 million net decrease in wholesale sales, consisting of decreases in Lilly Pulitzer, Lanier Apparel and Tommy Bahama partially offset by increases in Southern Tide. By way of comparison, on a fiscal period basis, consolidated comparable store sales also increased 5% in the First Nine Months of Fiscal 2018 relative to the First Nine Months of Fiscal 2017.sales. The changes in net sales by operating group are discussed below.

The following table presents the proportion of our consolidated net sales by distribution channel for each period presented:

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Full-price retail stores and outlets 40 % 39 %
E-commerce 20 % 17 %
Restaurant 8 % 8 %
Wholesale 32 % 36 %
Total 100 % 100 %


	First Nine Months
	Fiscal 2019		Fiscal 2018
Retail	39	%	40	%
E-commerce	22	%	20	%
Restaurant	8	%	8	%
Wholesale	31	%	32	%
Total	100	%	100	%

Tommy Bahama:

~~The~~

Tommy Bahama net sales decreased $2 million, or 1%, in the First Nine Months of Fiscal 2019 due to (1) a $6 million decrease in wholesale sales primarily reflecting decreased full-price wholesale sales, (2) a $2 million decrease in restaurant sales primarily due to the net impact of $1certain restaurant closures, remodels and openings since the beginning of Fiscal 2018 as well as lower sales at existing restaurant locations and (3) a $2 million decrease in outlet store sales due to lower sales at existing outlet stores and the net sales impact of outlet store closures. These decreases were partially offset by a $7 million, or 3%, increase in comparable sales to $252 million in the First Nine Months of Fiscal 2018 compared to the First Nine Months of Fiscal 2017 was primarily due to (1) an $11 million decrease in wholesale sales, including lower full-price wholesale sales, as Tommy Bahama continues to manage its exposure to department stores by reducing department store door count, and lower off-price wholesale sales, as Tommy Bahama disposed of a more significant amount of aged inventory in the First Nine Months of Fiscal 2017, (2) a $2 million decrease in outlet store sales, reflecting lower sales at existing outlets and the impact of Fiscal 2017 outlet closures, and (3) a $1 million decrease in non-comp full-price retail store sales, reflecting the net sales change for stores that were opened, closed or remodeled since the beginning of Fiscal 2017. These decreases were partially offset by (1) a $10 million, or 4%, increase in calendar-adjusted comparable store sales2019 from ~~$240 million in the 39 week period ended November 4, 2017 to $249~~$245 million in the First Nine Months of Fiscal ~~2018, driven by strong growth in e-commerce~~2018. The net sales ~~(2) a $3 million increase in restaurant sales resulting from increased sales at existing restaurants and the net impact~~ of ~~new restaurants opened, closed or remodeled since the beginning of Fiscal 2017 and (3) a $1 million increase in direct to consumer sales at~~non-comp retail stores were generally comparable stores resulting from the calendar shift between Fiscal 2017 and Fiscal 2018. By way of comparison, on a fiscal period basis, Tommy Bahama comparable store sales also increased 4% in the First Nine Months of Fiscal 2018 relative to the First Nine Months of Fiscal 2017.period-over-period. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Full-price retail stores and outlets 48 % 49 %
E-commerce 17 % 14 %
Restaurant 13 % 13 %
Wholesale 22 % 24 %
Total 100 % 100 %


	First Nine Months
	Fiscal 2019		Fiscal 2018
Retail	48	%	48	%
E-commerce	18	%	17	%
Restaurant	13	%	13	%
Wholesale	21	%	22	%
Total	100	%	100	%

Lilly Pulitzer:

The Lilly Pulitzer net sales increase of ~~$16~~$11 million, or 9%5%, in the First Nine Months of Fiscal 2019 was primarily the result of (1) an incremental net sales increase of ~~$16~~$6 million associated with non-comp retail store operations

Table of Contents

including the operation of ~~non-comp full-price~~additional retail stores ~~including stores opened by Lilly Pulitzer~~ and ~~the 12 Signature Stores acquired~~increased gift card breakage income, (2) a $2 million increase in ~~Fiscal 2017, (2) an $8~~wholesale sales reflecting increases in both full-price and off-price wholesale sales, (3) a $2 million, or 9%2%, increase in ~~calendar-adjusted~~ comparable ~~store~~ sales ~~from $91~~to $121 million in the ~~39-week period ended November 4, 2017 to $98~~First Nine Months of Fiscal 2019 from $119 million in the First Nine Months of Fiscal 2018, ~~with~~

~~Table of Contents~~

~~increases in both e-commerce~~ and ~~retail store comparable store sales, and (3)~~(4) a $5$2 million increase in e-commerce flash clearance sales. These increases were partially offset by (1) a $12 million decrease in wholesale sales, reflecting Lilly Pulitzer's efforts to manage its exposure to department stores and Fiscal 2018 not including any wholesale sales to the Signature Stores acquired in Fiscal 2017 and (2) a $1 million decrease in direct to consumer sales at comparable stores resulting from the calendar shift between Fiscal 2017 and Fiscal 2018. By way of comparison, on a fiscal period basis, Lilly Pulitzer comparable store sales increased 8% in the First Nine Months of Fiscal 2018 relative to the First Nine Months of Fiscal 2017. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Full-price retail stores 44 % 38 %
E-commerce 35 % 33 %
Wholesale 21 % 29 %
Total 100 % 100 %


	First Nine Months
	Fiscal 2019		Fiscal 2018
Retail	43	%	44	%
E-commerce	36	%	35	%
Wholesale	21	%	21	%
Total	100	%	100	%

Lanier Apparel:

The ~~decrease in~~Lanier Apparel net sales ~~for Lanier Apparel~~increase of ~~$12~~$4 million, or ~~14%~~6%, in the First Nine Months of Fiscal 2019 was primarily due to ~~(1) lower~~increased volume in various seasonal, in-stock and replenishment programs, including ~~the impact of softness~~initial shipments for certain programs in the ~~replenishment~~First Nine Months of Fiscal 2019. These increases were partially offset by (1) decreased sales in other programs, including lower volume for programs resulting from the exit of certain programs ~~(2) the exit from certain~~and customers, including programs ~~including the impact of~~with customers who filed for bankruptcy in Fiscal 2018, ~~(3) a shift in timing from the third quarter to the fourth quarter for~~and (2) certain ~~shipments, including significant warehouse club shipments~~programs that ~~occurred in the Third Quarter of Fiscal 2017, and (4) the prior year including~~had initial shipments in ~~certain private label and branded programs. These decreases were partially offset by increased volume in other programs, including initial shipments~~the First Nine Months of Fiscal 2018. While the Cole Haan ~~licensed tailored clothing. The timing~~and Duck Head businesses both had significant sales growth rates in the First Nine Months of Fiscal 2019, those business still represent a small proportion of Lanier ~~Apparel programs, including warehouse club shipments, can vary significantly from year to year. For the full year, we expect~~Apparel’s net sales.

Southern Tide:

The Southern Tide net sales ~~at Lanier Apparel in Fiscal 2018 to be modestly lower than Fiscal 2017 net sales.~~

~~Southern Tide:~~

~~The~~ increase ~~in net sales for Southern Tide~~ of $3$1 million, or ~~11%~~3%, in the First Nine Months of Fiscal 2019 was due to ~~increased~~higher sales in both the ~~wholesale~~e-commerce and ~~e-commerce~~wholesale channels of ~~distribution. The increased~~distribution, with e-commerce growing at a faster pace than wholesale ~~sales reflect increased sales to (1) Signature Stores, including those opened in the last year, (2) off-price retailers and (3) department stores.~~sales. The following table presents the proportion of net sales by distribution channel for Southern Tide for each period presented:

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
E-commerce 16 % 17 %
Wholesale 84 % 83 %
Total 100 % 100 %


	First Nine Months
	Fiscal 2019		Fiscal 2018
E-commerce	18	%	16	%
Wholesale	82	%	84	%
Total	100	%	100	%

Corporate and Other:

Gross Profit

The tables below present gross profit by operating group and in total for the First Nine Months of Fiscal ~~2018~~2019 and the First Nine Months of Fiscal ~~2017,~~2018, as well as the change between those two periods and gross margin by operating group and in total for ~~the First Nine Months of Fiscal 2018 and the First Nine Months of Fiscal 2017.~~those periods. Our gross profit and gross margin, which is calculated as gross profit divided by net

Table of Contents

sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company.

~~Table of Contents~~

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Tommy Bahama $ 295,982
$ 289,428
$ 6,554
2.3 %
Lilly Pulitzer 132,877
121,657
11,220
9.2 %
Lanier Apparel 20,893
26,354
(5,461 ) (20.7 )%
Southern Tide 17,307
15,849
1,458
9.2 %
Corporate and Other 5,663
(2,733 ) 8,396
NM
Total gross profit $ 472,722
$ 450,555
$ 22,167
4.9 %
LIFO charge included in Corporate and Other $ 109
$ 3,748

Tommy Bahama Japan inventory markdown charges in cost of goods sold $ 461
$ —

Inventory step-up charges included in Lilly Pulitzer $ —
$ 1,086

Inventory step-up charges for TBBC included in Corporate and Other $ 157
$ —

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Tommy Bahama 61.3 % 59.8 %
Lilly Pulitzer 63.7 % 63.3 %
Lanier Apparel 28.7 % 31.3 %
Southern Tide 49.8 % 50.7 %
Corporate and Other NM
NM
Consolidated gross margin 58.4 % 56.8 %


	First Nine Months
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Tommy Bahama	$	294,500	$	295,982	$	(1,482)	(0.5)	%
Lilly Pulitzer		138,252		132,877		5,375	4.0	%
Lanier Apparel		22,055		20,893		1,162	5.6	%
Southern Tide		17,688		17,307		381	2.2	%
Corporate and Other		6,079		5,663		416	7.3	%
Total gross profit	$	478,574	$	472,722	$	5,852	1.2	%
LIFO adjustments in Corporate and Other	$	810	$	109
Tommy Bahama Japan inventory markdown charges	$	—	$	461
Inventory step-up charges in Corporate and Other	$	—	$	157


	First Nine Months
	Fiscal 2019		Fiscal 2018
Tommy Bahama	61.3	%	61.3	%
Lilly Pulitzer	62.9	%	63.7	%
Lanier Apparel	28.7	%	28.7	%
Southern Tide	49.5	%	49.8	%
Corporate and Other	NM		NM
Consolidated gross margin	58.0	%	58.4	%

The increase in consolidated gross profit in the First Nine Months of Fiscal ~~2018~~2019 was primarily due to increased sales ~~and~~partially offset by lower gross margin. The ~~improved~~lower consolidated gross margin was primarily due to lower gross margin in Lilly Pulitzer and a change in sales mix as Lanier Apparel sales, which typically have lower gross margins than our other businesses, represented a higher proportion of our net sales.

Tommy Bahama:

The gross margin for Tommy Bahama was comparable reflecting (1) a change in sales mix ~~resulting from higher~~with retail store and e-commerce sales representing a greater proportion of net sales ~~in Lilly Pulitzer, Corporate~~ and ~~Other~~wholesale and ~~Southern Tide and~~outlet store sales representing a lower proportion of net sales in Lanier Apparel, (2) improved gross margins in Tommy Bahama, (3) the First Nine Months of Fiscal 2018 including a small LIFO accounting charge compared to the First Nine Months of Fiscal 2017 including a LIFO accounting charge of $4 million, and (4) the First Nine Months of Fiscal 2017 including inventory step-up charges in Lilly Pulitzer of $1 million, with only a small charge in the First Nine Months of Fiscal 2018. These favorable items that impacted consolidated gross margin were partially offset by (1) lower gross margins in Lanier Apparel and Southern Tide and (2) the First Nine Months of Fiscal 2018 including certain Tommy Bahama Japan inventory markdown charges ~~and inventory step-up charges for TBBC.~~

~~Tommy Bahama:~~

The increase in gross margin for Tommy Bahama was driven by (1) improved gross margins in both the direct to consumer and wholesale businesses, reflecting progress in our initiatives to improve initial gross margins, including selective price increases as well as product cost reductions, and improved gross margins on off-price sales, and (2) a change in sales mix as full-price direct to consumer sales represented a greater proportion of sales, while off-price wholesale and off-price direct to consumer sales represented a lower proportion of sales in the First Nine Months of Fiscal 2018. These favorable changes were partially offset by the impact of the Tommy Bahama Japan inventory markdown charges.

~~Lilly Pulitzer:~~

~~The increase in gross margin for Lilly Pulitzer was primarily due to (1) the First Nine Months of Fiscal 2017 including inventory step-up charges of $1 million,~~ with no such charges in the First Nine Months of Fiscal ~~2018, and (2)~~2019. These favorable items were partially offset by the impact of a ~~change~~greater proportion of net sales in ~~sales mix as~~the direct to consumer ~~sales represent~~business being associated with promotional events, including our Friends and Family, loyalty award cards and other promotion events.

Lilly Pulitzer:

The decrease in gross margin for Lilly Pulitzer reflects (1) a ~~larger~~greater proportion of ~~Lilly Pulitzer net~~off-price wholesale sales, which had lower gross margins in the First Nine Months of Fiscal ~~2018.~~2019, and (2) higher costs associated with gift with purchase and other promotional events resulting in lower gross margin in the full-price direct to consumer business. These unfavorable items were partially offset by ~~lower gross margins in both~~ the ~~direct to consumer and the wholesale channels~~impact of ~~distribution.~~

higher gift card breakage income.

Lanier Apparel:

~~Table of Contents~~

The ~~decrease in~~ gross margin for Lanier Apparel was primarily due to (1) the First Nine Months of Fiscal 2018 including more significant charges for certain customer allowance, cooperative advertising and other amounts related to certain replenishment and other programs, with the First Nine Months of Fiscal 2017 including certain favorable customer allowance items, and (2) the First Nine Months of Fiscal 2018 facingcomparable as gross margin ~~pressures.~~changes in various programs and sales mix generally offset.

Table of Contents

Southern Tide:

The decrease in gross margin for Southern Tide was primarily due to ~~(1) higher~~the prior year including an insurance recovery on certain inventory ~~markdowns, (2) increased wholesale customer discounts and allowances, including allowances for co-op advertising and fixtures and (3)~~partially offset by a change in sales mix as ~~Signature Stores, department stores and off-price wholesale~~e-commerce sales represented a greater proportion of ~~sales in the First Nine Months of Fiscal 2018. These unfavorable items were partially offset by an insurance recovery on certain inventory in Fiscal 2018.~~

net sales.

Corporate and Other:

The gross profit in Corporate and Other primarily reflects (1) the gross profit of TBBC, (2) the gross profit of our Lyons, Georgia distribution center and (3) the impact of LIFO accounting adjustments. The ~~primary driver for the improved~~increased gross profit ~~was (1)~~primarily reflects the ~~First Nine Months~~impact of ~~Fiscal 2018 including~~higher net sales in TBBC partially offset by the ~~gross profit of TBBC and (2) the net favorable~~unfavorable impact of LIFO accounting in the First Nine Months of Fiscal ~~2018~~2019 compared to the First Nine Months of Fiscal ~~2017.~~2018. The LIFO accounting impact in Corporate and Other in each period primarily reflects ~~the sale of~~(1) a charge in Corporate and Other when inventory that had been marked down to the estimated net realizable value in an operating group in a prior ~~periods~~period is ultimately sold or (2) a credit in Corporate and Other when inventory has been marked down to the estimated net realizable value in an operating group in the current period, but ~~generally reversed in Corporate and Other~~the inventory has not been sold as ~~part~~ of ~~LIFO accounting.~~

period end.

SG&A

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
SG&A $ 414,747
$ 393,193
$ 21,554
5.5 %
SG&A as % of net sales 51.3 % 49.6 %

Tommy Bahama Japan restructuring charges in SG&A $ 3,206
$ —

Amortization of Tommy Bahama Canadian intangible assets $ 1,141
$ 1,134

Amortization of Lilly Pulitzer Signature Store intangible assets $ 281
$ 90

Transaction/integration costs associated with Lilly Pulitzer Signature Store acquisitions $ —
$ 563

Amortization of Southern Tide intangible assets $ 216
$ 216


	First Nine Months
	Fiscal 2019			Fiscal 2018			$ Change		% Change
SG&A	$	417,448		$	414,747		$	2,701	0.7	%
SG&A (as a % of net sales)		50.6	%		51.3	%
Amortization of Tommy Bahama Canada intangible assets	$	—		$	1,141
Amortization of Lilly Pulitzer Signature Store intangible assets	$	240		$	281
Amortization of Southern Tide intangible assets	$	218		$	216
Tommy Bahama Japan restructuring SG&A charges	$	590		$	3,206

The increase in SG&A in the First Nine Months of Fiscal ~~2018~~2019 was primarily due to (1) increased advertising expense of $8 million, with much of the increased spending focused on consumer acquisition initiatives in the First Half of Fiscal 2018, (2) $5 million of incremental costs in the First Nine Months of Fiscal 2018 associated with additional retail stores and restaurants, (3) $3 million of Tommy Bahama Japan restructuring charges, including lease termination fees, premises reinstatement costs, non-cash impairment charges and severance amounts, as discussed in Note 6, (4) $3 million of incremental SG&A associated with TBBC and (5) other increases in SG&A to support the businesses, including increased salaries, ~~and~~ wages, ~~occupancy~~employee benefits, variable costs and other operating expenses in our ongoing ~~direct to consumer~~operations, and ~~wholesale operations.~~(2) $2 million of incremental SG&A associated with the cost of operating additional retail stores and restaurants. These increases ~~in SG&A~~ were partially offset by (1) a $5 million reduction in incentive compensation expense, (2) a $3 million decrease in advertising expense, (3) a $3 million reduction in restructuring charges related to the Tommy Bahama Japan operations and (4) a $1 million decrease in amortization of ~~lower incentive compensation amounts.~~

Tommy Bahama Canada intangible assets.

Royalties and other operating income

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Royalties and other operating income $ 10,616
$ 10,123
$ 493
4.9 %


	First Nine Months
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Royalties and other operating income	$	11,469	$	10,616	$	853	8.0	%

Royalties and other operating income primarily reflects income received from third parties from the licensing of our ~~Tommy Bahama, Lilly Pulitzer and Southern Tide~~ brands. The increase in royalties and other income in the First Nine Months of Fiscal ~~2018 primarily~~2019 reflects increased royalty income in both Tommy Bahama and Lilly Pulitzer.

Table of Contents

Operating income (loss)

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Tommy Bahama $ 29,783
$ 32,082
$ (2,299 ) (7.2 )%
Lilly Pulitzer 43,823
43,621
202
0.5 %
Lanier Apparel 3,448
6,668
(3,220 ) (48.3 )%
Southern Tide 4,399
3,765
634
16.8 %
Corporate and Other (12,862 ) (18,651 ) 5,789
31.0 %
Total operating income $ 68,591
$ 67,485
$ 1,106
1.6 %
LIFO charge included in Corporate and Other $ 109
$ 3,748

Tommy Bahama Japan inventory markdown charges in cost of goods sold $ 461
$ —

Inventory step-up charges included in Lilly Pulitzer $ —
$ 1,086

Inventory step-up charges for TBBC included in Corporate and Other $ 157
$ —

Tommy Bahama Japan restructuring charges in SG&A $ 3,206
$ —

Amortization of Tommy Bahama Canadian intangible assets $ 1,141
$ 1,134

Amortization of Lilly Pulitzer Signature Store intangible assets $ 281
$ 90

Transaction/integration costs associated with Lilly Pulitzer Signature Store acquisitions $ —
$ 563

Amortization of Southern Tide intangible assets $ 216
$ 216


	First Nine Months
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Tommy Bahama	$	30,671	$	29,783	$	888	3.0	%
Lilly Pulitzer		46,689		43,823		2,866	6.5	%
Lanier Apparel		3,387		3,448		(61)	(1.8)	%
Southern Tide		4,877		4,399		478	10.9	%
Corporate and Other		(13,029)		(12,862)		(167)	(1.3)	%
Total Operating Income	$	72,595	$	68,591	$	4,004	5.8	%
LIFO adjustments in Corporate and Other	$	810	$	109
Tommy Bahama Japan inventory markdown charges	$	—	$	461
Inventory step-up charges in Corporate and Other	$	—	$	157
Amortization of Tommy Bahama Canada intangible assets	$	—	$	1,141
Amortization of Lilly Pulitzer Signature Store intangible assets	$	240	$	281
Amortization of Southern Tide intangible assets	$	218	$	216
Tommy Bahama Japan restructuring SG&A charges	$	590	$	3,206

The increase in operating income in the First Nine Months of Fiscal ~~2018~~2019 was primarily due to higher sales ~~and gross margins~~ partially offset by higher SG&A ~~including increased advertising spend~~ and ~~Tommy Bahama Japan restructuring charges as discussed in Note 6.~~lower gross margin. On an operating group basis, the increase in operating income ~~was primarily due to improved~~reflects increased operating ~~results~~income in Lilly Pulitzer, Tommy Bahama and Southern Tide partially offset by a larger operating loss in Corporate and Other ~~partially offset by~~and lower operating income in Lanier ~~Apparel and Tommy Bahama.~~Apparel. Changes in operating income (loss) by operating group are discussed below.

Tommy Bahama:

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Net sales $ 482,990
$ 483,971
$ (981 ) (0.2 )%
Gross margin 61.3 % 59.8 %

Operating income $ 29,783
$ 32,082
$ (2,299 ) (7.2 )%
Operating income as % of net sales 6.2 % 6.6 %

Tommy Bahama Japan inventory markdown charges in cost of goods sold $ 461
$ —

Tommy Bahama Japan restructuring charges in SG&A $ 3,206
$ —

Amortization of Tommy Bahama Canadian intangible assets $ 1,141
$ 1,134


	First Nine Months
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	480,623		$	482,990		$	(2,367)	(0.5)	%
Gross profit	$	294,500		$	295,982		$	(1,482)	(0.5)	%
Gross margin		61.3	%		61.3	%
Operating income	$	30,671		$	29,783		$	888	3.0	%
Operating income as % of net sales		6.4	%		6.2	%
Tommy Bahama Japan inventory markdown charges	$	—		$	461
Amortization of Tommy Bahama Canada intangible assets	$	—		$	1,141
Tommy Bahama Japan restructuring SG&A charges	$	590		$	3,206

The ~~lower~~increase in operating income ~~for~~in Tommy Bahama was primarily due to ~~higher~~lower SG&A ~~which offset the favorable impact of higher gross margin. The~~and increased SG&A included (1) $6 million of increased advertising expense, with much of the increased advertising spend focused on consumer acquisition initiatives, (2) $3 million of Tommy Bahama Japan restructuring charges as discussed in Note 6 and (3) increased salaries and wages, occupancy and other operating expenses in our ongoing direct to consumer and wholesale operations. These increases in SG&A wereroyalty income, partially offset by ~~$4 million of~~ lower ~~incentive compensation amounts in the First Nine Months of Fiscal 2018.~~

~~Lilly Pulitzer:~~

~~Table of Contents~~

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Net sales $ 208,463
$ 192,045
$ 16,418
8.5 %
Gross margin 63.7 % 63.3 %

Operating income $ 43,823
$ 43,621
$ 202
0.5 %
Operating income as % of net sales 21.0 % 22.7 %

Inventory step-up charges included in Lilly Pulitzer $ —
$ 1,086

Amortization of Lilly Pulitzer Signature Store intangible assets $ 281
$ 90

Transaction/integration costs associated with Lilly Pulitzer Signature Store acquisitions $ —
$ 563

net sales. The ~~higher operating income in Lilly Pulitzer reflects higher sales and gross margin, partially offset by higher SG&A. The higher~~lower SG&A for the First Nine Months of Fiscal ~~2018 includes~~2019 reflects (1) $5a $4 million decrease in advertising expense, (2) a $4 million reduction in incentive compensation and (3) a $3 million reduction in restructuring charges related to the Tommy Bahama Japan operations. These decreases were partially offset by increased salaries and wages, employee benefits, variable costs and other operating expenses in our ongoing operations.

Table of Contents

Lilly Pulitzer:


	First Nine Months
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	219,809		$	208,463		$	11,346	5.4	%
Gross profit	$	138,252		$	132,877		$	5,375	4.0	%
Gross margin		62.9	%		63.7	%
Operating income	$	46,689		$	43,823		$	2,866	6.5	%
Operating income as % of net sales		21.2	%		21.0	%
Amortization of Lilly Pulitzer Signature Store intangible assets	$	240		$	281

The increase in operating income in Lilly Pulitzer was primarily due to increased net sales and royalty income partially offset by lower gross margin and higher SG&A. The higher SG&A in the First Nine Months of Fiscal 2019 included (1) SG&A increases to support the planned growth of the business, including additional employment costs, (2) $2 million of incremental SG&A associated with the cost of operating additional retail stores ~~including the 12 Signature Stores acquired in Fiscal 2017, (2) $3 million of increased advertising expense~~ and (3) ~~SG&A increases to support the planned growth of the business, including additional employment cost.~~

a $1 million increase in incentive compensation amounts.

Lanier Apparel:

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Net sales $ 72,806
$ 84,314
$ (11,508 ) (13.6 )%
Gross margin 28.7 % 31.3 %

Operating income $ 3,448
$ 6,668
$ (3,220 ) (48.3 )%
Operating income as % of net sales 4.7 % 7.9 %


	First Nine Months
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	76,871		$	72,806		$	4,065	5.6	%
Gross profit	$	22,055		$	20,893		$	1,162	5.6	%
Gross margin		28.7	%		28.7	%
Operating income	$	3,387		$	3,448		$	(61)	(1.8)	%
Operating income as % of net sales		4.4	%		4.7	%

The ~~lower~~decrease in operating income ~~for~~in Lanier Apparel was primarily due to ~~the lower sales and lower gross margin,~~higher SG&A partially offset by ~~reduced SG&A.~~the impact of higher net sales. The ~~reduced~~ SG&A ~~was primarily due to lower sales-related variable expenses, including royalties, shipping and advertising, as well as lower incentive compensation amounts.~~

~~Southern Tide:~~

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Net sales $ 34,745
$ 31,254
$ 3,491
11.2 %
Gross margin 49.8 % 50.7 %

Operating income $ 4,399
$ 3,765
$ 634
16.8 %
Operating income as % of net sales 12.7 % 12.0 %
Amortization of Southern Tide intangible assets $ 216
$ 216

The higher operating income for Southern Tide was primarily due to the higher sales, partially offset by higher SG&A and lower gross margin. The higher SG&A included increased incentive compensation and variable expenses associated with the higher sales.

~~Corporate and Other:~~

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Net sales $ 9,927
$ 1,448
$ 8,479
NM
Operating loss $ (12,862 ) $ (18,651 ) $ 5,789
31.0 %
LIFO charge included in Corporate and Other $ 109
$ 3,748

Inventory step-up charges for TBBC included in Corporate and Other $ 157
$ —

~~Table of Contents~~

The improved operating results in Corporate and Other were primarily due to (1) the $4 million net favorable impact of LIFO accounting, (2) the operating income of TBBC, (3) a lower operating loss in our corporate operations, due in part to certain life insurance proceedsincrease in the First Nine Months of Fiscal ~~2018,~~2019 was primarily due to higher sales-related variable expenses, including increased royalty expense, as well as higher advertising expense, which were partially offset by lower incentive compensation amounts.

Southern Tide:


	First Nine Months
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Net sales	$	35,704		$	34,745		$	959	2.8	%
Gross profit	$	17,688		$	17,307		$	381	2.2	%
Gross margin		49.5	%		49.8	%
Operating income	$	4,877		$	4,399		$	478	10.9	%
Operating income as % of net sales		13.7	%		12.7	%
Amortization of Southern Tide intangible assets	$	218		$	216

The increase in operating income in Southern Tide was primarily due to higher net sales and ~~(4) improved~~lower SG&A partially offset by lower gross margin. The SG&A decrease in the First Nine Months of Fiscal 2019 was primarily due to lower incentive compensation amounts partially offset by increased advertising expense, variable costs associated with the higher sales and other costs to support future growth of the business.

Table of Contents

Corporate and Other:


	First Nine Months
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Net sales	$	12,187	$	9,927	$	2,260	22.8	%
Gross profit	$	6,079	$	5,663	$	416	7.3	%
Operating loss	$	(13,029)	$	(12,862)	$	(167)	(1.3)	%
LIFO adjustments in Corporate and Other	$	810	$	109
Inventory step-up charges in Corporate and Other	$	—	$	157

The larger operating ~~results~~loss in ~~our Lyons, Georgia distribution center operations.~~

Corporate and Other was primarily due to the unfavorable impact of LIFO accounting partially offset by higher operating income of TBBC.

Interest expense, net

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Interest expense, net $ 1,872
$ 2,355
$ (483 ) (20.5 )%


	First Nine Months
	Fiscal 2019		Fiscal 2018		$ Change		% Change
Interest expense, net	$	1,171	$	1,872	$	(701)	(37.4)	%

Interest expense decreased in the First Nine Months of Fiscal ~~2018~~2019 primarily due to lower average debt outstanding ~~during the First Nine Months of Fiscal 2018 partially offset by~~as well as higher interest ~~rates and higher unused line fees in the First Nine Months of Fiscal 2018.~~

income.

Income taxes

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017 $ Change % Change
Income taxes $ 17,107
$ 24,172
$ (7,065 ) (29.2 )%
Effective tax rate 25.6 % 37.1 %

Income taxes and the effective tax rate decreased in the First Nine Months of Fiscal 2018 primarily due to the impact of U.S. Tax Reform. The impact of U.S. Tax Reform results in the income tax amounts and effective tax rates for Fiscal 2018 and Fiscal 2017 not being comparable. Additionally, income tax expense for the First Nine Months of Fiscal 2018 includes


	First Nine Months
	Fiscal 2019			Fiscal 2018			$ Change		% Change
Income taxes	$	18,263		$	17,107		$	1,156	6.8	%
Effective tax rate		25.6	%		25.6	%

Both periods include the favorable ~~impact~~benefit of certain stock awards that vested during the period, the results of our foreign operations and other ~~discrete items, while in the First Nine Months of Fiscal 2017 the various discrete items related to certain stock awards that vested and other discrete items generally offset in the aggregate.~~

items. Our effective tax rate for ~~the full year of~~ Fiscal ~~2018~~2019 is expected to be approximately 26%. In addition to the typical items that may result in an effective tax rate that differs from our expectations, the effective rate for Fiscal 2018 may vary from 26% as a result of adjustments to the provisional amounts recognized for U.S. Tax Reform. The final impact of U.S. Tax Reform may differ from our provisional amounts recognized in Fiscal 2017 due to additional regulatory guidance that may be issued, us obtaining additional information to refine our estimated tax amounts and changes in current interpretations and assumptions. Refer to Note 4 for additional information about income taxes and U.S. Tax Reform.

Net earnings


	First Nine Months
	Fiscal 2019		Fiscal 2018
Net sales	$	825,194	$	808,931
Operating income	$	72,595	$	68,591
Net earnings	$	53,161	$	49,612
Net earnings per diluted share	$	3.15	$	2.95
Weighted average shares outstanding - diluted		16,896		16,826

Southern Tide and lower interest expense.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

~~Table of Contents~~

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 and Southern Tide lifestyle brands, other owned and licensed brands, and private label apparel products. Our primary uses of cash flow include the purchase of products in the operation of our business from third party contract manufacturers outside of the United States, as well as operating expenses, including employee compensation and benefits, occupancy-related costs, marketing and advertising costs, distribution costs, other general and administrative expenses and the payment of periodic interest payments related to our financing arrangements.

Table of Contents

Additionally, we use cash for the funding of capital expenditures, dividends and repayment of indebtedness. 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 working capital to operate our business. If cash inflows are less than cash outflows, we have access to amounts under our U.S. Revolving Credit Agreement, subject to its terms, which is described below. We may seek to finance our future cash requirements through various methods, including cash flow from operations, borrowings under our current or additional credit facilities, sales of debt or equity securities, and cash on hand.

As of November ~~3, 2018,~~2, 2019, we had $7$22 million of cash and cash equivalents on hand, ~~with $32 million of~~no borrowings outstanding and ~~$225~~$313 million of availability under our U.S. Revolving Credit Agreement. Generally, we anticipate that excess cash, if any, will be used to repay any debt outstanding on our U.S. Revolving Credit Agreement. We believe our balance sheet and anticipated future positive cash flow from operating activities provide sufficient cash flow to satisfy our ongoing cash requirements as well as ample opportunity to continue to invest in our brands, ~~and our~~ direct to consumer initiatives and other strategic initiatives.

Key Liquidity Measures

($ in thousands) November 3, 2018 February 3, 2018 October 28, 2017 January 28, 2017
Total current assets $ 251,900
$ 236,118
$ 234,721
$ 231,628
Total current liabilities $ 124,839
$ 135,010
$ 117,915
$ 131,396
Working capital $ 127,061
$ 101,108
$ 116,806
$ 100,232
Working capital ratio 2.02
1.75
1.99
1.76
Debt to total capital ratio 6 % 10 % 15 % 20 %


	November 2,			February 2,			November 3,			February 3,
($ in thousands)	2019			2019			2018			2018
Total current assets	$	268,828		$	269,788		$	251,900		$	236,118
Total current liabilities	$	164,118		$	142,209		$	124,839		$	135,010
Working capital	$	104,710		$	127,579		$	127,061		$	101,108
Working capital ratio		1.64			1.90			2.02			1.75
Debt to total capital ratio		—	%		3	%		6	%		10	%

Our working capital ratio is calculated by dividing total current assets by total current ~~liabilities, each including any assets or liabilities related to discontinued operations.~~liabilities. Current assets increased from ~~October 28, 2017 to~~ November 3, 2018 ~~primarily~~to November 2, 2019 due to ~~increases in~~increased inventories and ~~prepaid expenses~~increased cash partially offset by lower prepaid expenses and other current assets and receivables. Current liabilities increased primarily due to ~~higher~~the impact of the revised lease accounting guidance which required the recognition of $50 million of current operating lease liabilities at November 2, 2019, as discussed in Note 5 to the unaudited condensed consolidated financial statements included in this report, partially offset by reductions in accounts payable, accrued compensation and other accrued expenses and ~~liabilities at November 3, 2018 compared to October 28, 2017, partially offset by lower liabilities related to discontinued operations.~~liabilities. Changes in current assets and current liabilities are discussed below.

For the ratio of debt to total capital, debt is defined as short-term and long-term debt, and total capital is defined as debt plus ~~shareholders'~~shareholders’ equity. Debt was $0 million at November 2, 2019 and $32 million at November 3, 2018, ~~and $72 million at October 28, 2017,~~ while shareholders’ equity was $517 million at November 2, 2019 and $465 million at November 3, ~~2018 and $407 million at October 28, 2017.~~2018. The decrease in debt since ~~October 28, 2017~~November 3, 2018 was primarily due to ~~$118~~$107 million of cash flow from operations which was partially offset by ~~$43~~cash payments of $33 million offor capital expenditures ~~the payment of~~and $25 million for dividends, resulting in $22 million of ~~dividends~~cash and ~~payments related to various acquisitions~~cash equivalents on hand as of ~~$11 million. Shareholders'~~November 2, 2019. Shareholders’ equityincreased from ~~October 28, 2017,~~November 3, 2018, primarily as a result of net earnings less dividends paid. Our debt levels and ratio of debt to total capital in future periods may not be comparable to historical amounts as we continue to assess, and possibly make changes to, our capital structure. Changes in our capital structure in the future, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

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 from ~~October 28, 2017~~November 3, 2018 to November ~~3, 2018.~~2, 2019.

~~Current Assets:~~

Table of Contents

November 3, 2018 February 3, 2018 October 28, 2017 January 28, 2017
Cash and cash equivalents $ 7,413
$ 6,343
$ 6,077
$ 6,332
Receivables, net 69,400
67,542
73,724
58,279
Inventories, net 138,150
126,812
127,301
142,175
Prepaid expenses and other current assets 36,937
35,421
27,619
24,842
Total current assets $ 251,900
$ 236,118
$ 234,721
$ 231,628

Current Assets:


	November 2,		February 2,		November 3,		February 3,
	2019		2019		2018		2018
Cash and cash equivalents	$	21,568	$	8,327	$	7,413	$	6,343
Receivables, net		64,593		69,037		69,400		67,542
Inventories, net		154,229		160,656		138,150		126,812
Prepaid expenses and other current assets		28,438		31,768		36,937		35,421
Total current assets	$	268,828	$	269,788	$	251,900	$	236,118

Cash and cash equivalents were $22 million as of November 2, 2019 compared to $7 million as of November 3, ~~2018 and October 28, 2017 represent typical~~2018. Typical cash amounts maintained on an ongoing basis in our operations ~~which~~ generally ~~ranges~~range from $5 million to $10 million at any given ~~time.~~time if we have debt outstanding. Any excess cash is generally used to repay any amounts outstanding under our U.S. Revolving Credit ~~Agreement.~~Agreement, and if cash flow from operations exceeds amounts required to pay any outstanding debt amounts, capital expenditures and dividends, cash outstanding may exceed the typical cash amounts. The decrease in receivables, net as of November ~~3, 2018~~2, 2019 was primarily due to ~~lower wholesale trade~~a $4 million reduction in income tax receivables ~~primarily resulting from lower wholesale sales~~reflecting the collection of certain income tax receivable amounts.

Inventories, net, which is net of a $62 million LIFO reserve in ~~Lanier Apparel~~both periods, increased as of November 2, 2019 due to increases in ~~the Third Quarter of Fiscal 2018,~~inventories in Tommy Bahama, Southern Tide and Corporate and Other partially offset by ~~a $4 million income tax receivable as of November 3, 2018 with no meaningful income tax receivable as of October 28, 2017.~~

~~Inventories, net as of November 3, 2018~~reductions in Lilly Pulitzer and Lanier Apparel. The increased inventory levels are primarily ~~as a result of higher~~to support planned sales growth and to increase base inventory levels in ~~Lanier Apparel, Lilly Pulitzer~~certain key item programs and Southern Tide, partially offset by lower inventory levels in Tommy Bahama and Corporate and Other. The higher inventories in Lanier Apparel, Lilly Pulitzer and Southern Tide reflect planned increases in sales in the Fourth Quarter of Fiscal 2018 as well as Lanier Apparel having lower than optimal inventory levels in Fiscal 2017. Inventories in Tommy Bahama decreased primarily due to continuing initiatives to focus on closely managing inventory purchases, reducing on-hand inventory levels and clearing prior season inventory more quickly. The decrease in Corporate and Other was primarily due to the impact of LIFO accounting, partially offset by the inventory of TBBC.product categories. We believe that inventory levels in each operating group are appropriate to support anticipated ~~sales for the Fourth Quarter of Fiscal 2018.~~

sales. Prepaid expenses and other current assets decreased as of November ~~3, 2018 increased~~2, 2019 primarily as a result of ~~(1) higher~~lower prepaid rent expense due to the ~~timing~~adoption of ~~payment~~the revised lease accounting guidance, which resulted in the classification of ~~monthly~~prepaid rent ~~amounts~~in operating lease assets in our consolidated balance sheet, as November 2018 rent payments were made prior to November 3, 2018, but certain November 2017 rent payments had not been paid prior to October 28, 2017, (2) the reclassification of certain amounts from inventory to prepaid expenses and other current assets related to estimated inventory returns, in accordance with the new revenue recognition guidance using the modified retrospective method of transition, (3) increased advertising associated with our 2018 advertising campaigns and the timing of certain advertising payments, (4) higherwell as lower prepaid income ~~taxes, and (5) higher information technology related prepaid operating expenses including software as a service, license, subscription and maintenance arrangements.~~

taxes.

Non-current Assets:

November 3, 2018 February 3, 2018 October 28, 2017 January 28, 2017
Property and equipment, net $ 194,228
$ 193,533
$ 191,038
$ 193,931
Intangible assets, net 176,735
178,858
175,057
175,245
Goodwill 66,618
66,703
63,443
60,015
Other non-current assets, net 23,272
24,729
24,250
24,340
Total non-current assets $ 460,853
$ 463,823
$ 453,788
$ 453,531


	November 2,		February 2,		November 3,		February 3,
	2019		2019		2018		2018
Property and equipment, net	$	190,537	$	192,576	$	194,228	$	193,533
Intangible assets, net		175,298		176,176		176,735		178,858
Goodwill		66,594		66,621		66,618		66,703
Operating lease assets		287,977		—		—		—
Other non-current assets, net		23,850		22,093		23,272		24,729
Total non-current assets	$	744,256	$	457,466	$	460,853	$	463,823

Property and equipment, net as of November ~~3, 2018 increased~~2, 2019 decreased primarily as a result of ~~capital expenditures in~~depreciation expense during the ~~twelve~~12 months ended November ~~3, 2018,~~2, 2019, partially offset by ~~depreciation expense~~capital expenditures during the same period. The ~~increases~~decrease in intangible assets, net ~~and goodwill at~~as of November ~~3, 2018 were~~2, 2019 was primarily due to ~~the acquisition of TBBC during December 2017, as disclosed in Note 12 to our consolidated financial statements contained in our Annual Report on Form 10-K for Fiscal 2017, partially offset by the~~ amortization of intangible assets in the ~~twelve~~12 months ended November ~~3, 2018.~~

~~Liabilities:~~

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November 3, 2018 February 3, 2018 October 28, 2017 January 28, 2017
Total current liabilities $ 124,839
$ 135,010
$ 117,915
$ 131,396
Long-term debt 32,211
45,809
72,131
91,509
Other non-current liabilities 73,434
74,029
73,487
70,002
Deferred taxes 16,922
15,269
16,829
13,578
Non-current liabilities related to discontinued operations —
—
972
2,544
Total liabilities $ 247,406
$ 270,117
$ 281,334
$ 309,029

~~Current liabilities~~2, 2019. The operating lease assets amount as of November ~~3, 2018~~2, 2019 is a result of the adoption of the revised lease accounting guidance during Fiscal 2019.

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Liabilities:


	November 2,		February 2,		November 3,		February 3,
	2019		2019		2018		2018
Total current liabilities	$	164,118	$	142,209	$	124,839	$	135,010
Long-term debt		—		12,993		32,211		45,809
Non-current operating lease liabilities		293,775		—		—		—
Other non-current liabilities		17,365		75,286		73,434		74,029
Deferred taxes		21,010		18,411		16,922		15,269
Total liabilities	$	496,268	$	248,899	$	247,406	$	270,117

Current liabilities increased ~~primarily due to (1) higher accounts payable~~as of November 2, 2019 primarily due to the ~~timing~~$50 million of ~~payment~~current lease liabilities recognized as of ~~certain~~November 2, 2019, as a result of the adoption of the revised lease accounting guidance during Fiscal 2019 partially offset by reductions in accrued compensation, accounts payable ~~amounts, (2) higher~~and other accrued expenses and liabilities resulting from higher deferred rent amounts, duties payable, sales tax payable and gift card liabilities and (3) higher accrued compensation amounts resulting from the timing of payment of bi-weekly employee salaries at quarter end due to the 53 week Fiscal 2017 shifting the relationship between pay periods and fiscal periods partially offset by lower incentive compensation amounts. These increases were partially offset by the payment of all liabilities related to discontinued operations.liabilities. The decrease in long-term debt ~~as of~~since November 3, 2018 was ~~primarily~~ due to ~~cash flows during the twelve months ended November 3, 2018, including $118~~$107 million of cash flow from operations which was partially offset by cash payments of ~~$43~~$33 million for capital expenditures ~~$22~~and $25 million for ~~dividends and $11 million for various acquisitions.~~

~~Deferred taxes were comparable~~dividends.

The non-current operating lease liabilities amount as of November 2, 2019 is a result of the adoption of the revised lease accounting guidance during Fiscal 2019. Other non-current liabilities decreased as of November 2, 2019 primarily due to the amount as of November 3, 2018 ~~and October 28, 2017 primarily due to the $12~~including $60 million ~~impact on depreciation expense timing differences resulting from a cost segregation analysis completed in Fiscal 2017, which was offset by the $12 million impact of the revaluation~~ of deferred ~~tax amounts resulting from U.S. Tax Reform in Fiscal 2017. There~~rent and deferred rent tenant improvement allowance liabilities which were ~~no current or non-current liabilities related to discontinued operations~~classified as operating lease assets as of November ~~3, 2018~~2, 2019, as a result of ~~negotiated lease terminations in Fiscal 2017 for~~ the ~~remaining lease agreements, with the final satisfaction~~adoption of the ~~liability~~revised lease accounting guidance during Fiscal 2019. This reduction was partially offset by increases in amounts for deferred compensation liabilities and fair value of contingent consideration.

Deferred taxes increased as of November 2, 2019 primarily due to timing differences associated with the lease obligations completed in February 2018. We do not anticipate cash flows or earnings related to the discontinued operations in future periods as we have satisfied all obligations related to these lease agreements.

depreciation, amortization and prepaid expenses partially offset by timing differences associated with inventories.

Statement of Cash Flows

The following table sets forth the net cash flows, including continuing and discontinued operations, for the First Nine Months of Fiscal ~~2018~~2019 and the First Nine Months of Fiscal ~~2017~~2018 (in thousands):

First Nine Months Fiscal 2018 First Nine Months Fiscal 2017
Cash provided by operating activities $ 64,618
$ 65,278
Cash used in investing activities (31,268 ) (31,411 )
Cash used in financing activities (32,065 ) (34,155 )
Net change in cash and cash equivalents $ 1,285
$ (288 )


	First Nine Months
	Fiscal 2019		Fiscal 2018
Cash provided by operating activities	$	75,206	$	64,618
Cash used in investing activities		(26,877)		(31,268)
Cash used in financing activities		(35,032)		(32,065)
Net change in cash and cash equivalents	$	13,297	$	1,285

Cash and cash equivalents on hand were $7$22 million and $6$7 million at November 2, 2019 and November 3, 2018, ~~and October 28, 2017,~~ respectively. Changes in cash flows in the First Nine Months of Fiscal ~~2018~~2019 and the First Nine Months of Fiscal ~~2017~~2018 related to operating activities, investing activities and financing activities are discussed below.

Operating Activities:

In ~~both~~the First Nine Months of Fiscal 2019 and the First Nine Months of Fiscal 2018, ~~and the First Nine Months of Fiscal 2017,~~ operating activities provided $75 million and $65 million, respectively, of cash. The cash flow from operating activities for each period was primarily the result of net earnings for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization and equity-based compensation, as well as the net impact of changes in deferred taxes and our working capital accounts. In both the First Nine Months of Fiscal ~~2018~~2019 and the First Nine Months of Fiscal ~~2017,~~2018, working capital account changes had an unfavorable impact on cash flow from ~~operations, but the unfavorable impact was more significant in~~operations. In the First Nine Months of Fiscal ~~2018.~~2019, the more significant changes in working capital, after considering the non-cash impact of certain reclassifications that resulted from the adoption of the revised lease accounting guidance, were a decrease in current liabilities, which reduced cash flow from operations, partially offset by decreases in inventories and receivables, which increased cash flow from

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operations. In the First Nine Months of Fiscal 2018, the more significant changes in working capital were an increase in inventories and a decrease in current liabilities, which reduced cash flow from operations.

Investing Activities:

In the First Nine Months of Fiscal ~~2017, the more significant changes in working capital accounts were an increase in receivables~~2019 and ~~a decrease in current liabilities, which reduced cash flow from operations, partially offset by a reduction in inventories, which increased cash flow from operations.~~

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~~Investing Activities:~~

~~In both~~ the First Nine Months of Fiscal 2018, ~~and the First Nine Months of Fiscal 2017,~~ investing activities used $27 million and $31 million, respectively, of ~~cash. Our~~cash, which primarily consisted of capital expenditures. On an ongoing basis, our cash flow used in investing activities ~~on an ongoing basis typically~~primarily consists of our capital expenditure investments in our existing brands and acquisitions of new businesses. Our capital expenditures primarily consist of costs associated with information technology initiatives, including e-commerce capabilities; opening, relocating and remodeling ~~full-price~~ retail stores and restaurants; and facilities enhancements for distribution centers and offices.

Financing Activities:

In the First Nine Months of Fiscal 2018, we paid $31 million for capital expenditures compared to $26 million in the First Nine Months of Fiscal 2017. In the First Nine Months of Fiscal 2017 we paid $5 million for acquisitions consisting of the acquisition of certain Lilly Pulitzer Signature Stores as well as working capital settlements related to other recent acquisitions, while in2019 and the First Nine Months of Fiscal 2018, ~~we paid certain small amounts consisting of working capital and other related settlements associated with recent acquisitions.~~

~~Financing Activities:~~

~~In the First Nine Months of Fiscal 2018 and the First Nine Months of Fiscal 2017,~~ financing activities used ~~$32~~$35 million and ~~$34~~$32 million, respectively, of cash. During the First Nine Months of Fiscal ~~2018~~2019 and the First Nine Months of Fiscal ~~2017,~~2018, we decreased debt and increased cash as our cash flow from operations ~~exceeded~~was greater than our capital ~~expenditure~~expenditures and ~~dividend payments.~~payment of dividends. During the First Nine Months of Fiscal ~~2018~~2019 and the First Nine Months of Fiscal ~~2017,~~2018 we paid $19 million and $17 million of dividends, respectively. Also, during the First Nine Months of Fiscal 2019 we paid $1 million for the payment of certain amounts related to previous acquisitions including the payment of certain holdback and ~~$14~~contingent consideration amounts and paid $1 million ~~respectively,~~related to the refinancing of ~~dividends.~~

~~We anticipate that cash flow provided by~~our revolving credit agreement. Both the First Nine Months of Fiscal 2019 and the First Nine Months of Fiscal 2018 included certain amounts related to the issuance of equity pursuant to our employee stock purchase plan and the repurchase of equity awards for employee tax withholding liabilities due to the vesting of equity awards.

If we are in a debt position, we may borrow or ~~used in financing activities in the future will be dependent upon~~pay down debt depending on whether our cash flow from operating activities exceeds our capital expenditures, dividend payments, acquisitions and any other investing or financing activities. Generally, we anticipate that excess cash, if any, will be used to repay any debt on our U.S. Revolving Credit Agreement.

Liquidity and Capital Resources

~~We had $32 million outstanding as of November 3, 2018 under our $325 million~~

In July 2019, we amended the U.S. Revolving Credit Agreement by entering into the First Amendment to the Fourth Amended and Restated Credit Agreement ("to (1) extend the maturity of the facility to July 2024, and (2) modify certain provisions including a reduction of interest rates on certain borrowings and a reduction in unused line fees. We had no amounts outstanding as of November 2, 2019 under our U.S. Revolving Credit ~~Agreement") compared to $72 million of borrowings outstanding as of October 28, 2017.~~Agreement. The U.S. Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified percentages of eligible categories of assets, (2) accrues variable-rate interest, ~~(weighted average borrowing rate of 3.9% as of November 3, 2018),~~ unused line fees and letter of credit fees based upon average unused availability or utilization, (3) requires periodic interest payments with principal due at maturity ~~(May 2021)~~(July 2024) and (4) is secured by a first priority security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal property.

To the extent cash flow needs exceed cash flow provided by our operations we will have access, subject to its terms, to our U.S. Revolving Credit Agreement to provide funding for operating activities, capital expenditures and acquisitions, if any. Our U.S. Revolving Credit Agreement is also used to establish collateral for certain insurance programs and leases and to finance trade letters of credit for product purchases, which reduce the amounts available under our line of credit when issued. As of November ~~3, 2018, $5~~2, 2019, $3 million of letters of credit were outstanding ~~against~~under our U.S. Revolving Credit Agreement. After considering these limitations and the amount of eligible assets in our borrowing base, as ~~applicable, as~~ of November ~~3, 2018,~~2, 2019, we had ~~$225~~$313 million in unused availability under the U.S. Revolving Credit Agreement, subject to certain limitations on borrowings.

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Covenants and Other Restrictions:

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 if excess availability under the agreement for three consecutive business days is less than the greater of (i) $23.5 million or (ii) 10% of availability. In such case, our

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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 (i) $23.5 million or (ii) 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 ~~entered into~~amended the U.S. Revolving Credit Agreement. During the ~~First Nine Months~~Third Quarter of Fiscal ~~2018~~2019 and as of November ~~3, 2018,~~2, 2019, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met at all times. As of November ~~3, 2018,~~2, 2019, we were compliant with all covenants related to the U.S. Revolving Credit Agreement.

Other Liquidity Items:

We anticipate that we will be able to satisfy our ongoing cash requirements, which generally consist of working capital and other operating activity needs, capital expenditures, interest payments on our debt and dividends, if any, primarily from positive cash flow from operations supplemented by borrowings under our U.S. Revolving Credit Agreement. Our need for working capital is typically seasonal with the greatest requirements generally in the fall and spring of each year. Our capital needs will depend on many factors including our growth rate, the need to finance inventory levels and the success of our various products. We anticipate that at the maturity of the U.S. Revolving Credit Agreement or as otherwise deemed appropriate, we will be able to refinance the facility or obtain other financing on terms available in the market at that time. The terms of any future financing arrangements may not be as favorable as the terms of the current agreement or current market terms.

Although we have paid dividends in 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 in the short term based on our expectation of operating cash flows in future periods 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 in all periods. For details about limitations on our ability to pay dividends, see the discussion of the U.S. Revolving Credit Agreement above.

Our contractual obligations as of November ~~3, 2018~~2, 2019 have not changed materially from the contractual obligations outstanding at February ~~3, 2018,~~2, 2019, as disclosed in our Annual Report on Form 10-K for Fiscal ~~2017~~2018 filed with the SEC, other than changes in amounts outstanding under our U.S. Revolving Credit Agreement, as discussed above.

Our anticipated capital expenditures for Fiscal ~~2018,~~2019, including the ~~$31~~$27 million incurred in the First Nine Months of Fiscal ~~2018,~~2019, are expected to be approximately ~~$45 million compared to $39 million in Fiscal 2017.~~$40 million. These expenditures are expected to consist primarily of costs associated with information technology initiatives, including e-commerce capabilities; ~~opening, relocating and remodeling full-price~~new retail stores and ~~restaurants;~~Marlin Bars; and ~~facilities enhancements.~~investments to remodel existing retail stores and restaurants. Our capital expenditure amounts in future years may

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increase or decrease from the amounts incurred in prior years depending on the information technology initiatives, ~~full-price retail store and restaurant~~direct to consumer location openings, relocations and remodels and other infrastructure requirements deemed appropriate for that year to support future expansion of our businesses.

Off Balance Sheet Arrangements

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 to 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. 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. On an ongoing basis, we evaluate our ~~estimates.~~estimates, including those discussed below. 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.

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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 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 Annual Report on Form 10-K for Fiscal ~~2017.~~2018. There have not been any significant changes to the application of our critical accounting policies and estimates during the First Nine Months of Fiscal ~~2018, except for changes in our revenue recognition policy as disclosed in Note 5.~~2019. A detailed summary of significant accounting policies is included in Note 1 to our consolidated financial statements contained in our Annual Report on Form 10-K for Fiscal ~~2017.~~

2018.

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. For details of the impact of seasonality on each of our operating groups, see the business discussion for each operating group in Part I, Item 1, Business in our Annual Report on Form 10-K for Fiscal ~~2017.~~

2018.

As the timing of certain unusual or non-recurring items, ~~economic conditions,~~ wholesale product shipments, weather or other factors affecting our operations may vary from one year to the next, we do not believe that net sales or operating income for any particular quarter or the distribution of net sales and operating income for Fiscal ~~2017~~2018 are necessarily indicative of anticipated results for Fiscal ~~2018~~2019 or expected distribution in future years. Our third quarter has historically been our smallest net sales and operating income quarter and that result is expected to continue. ~~The following table presents our percentage of net sales and operating results by quarter for Fiscal 2017:~~

First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Net sales 25 % 26 % 22 % 27 %
Operating income 35 % 42 % 1 % 22 %

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 Annual Report on Form 10-K for Fiscal ~~2017.~~2018. There have not been any significant changes in our exposure to these risks during the First Nine Months of Fiscal ~~2018.~~2019.

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ITEM 4. CONTROLS AND PROCEDURES

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 in ensuring that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

effective.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting during the Third Quarter of Fiscal ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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From time to time, we are a party to litigation and regulatory actions arising in the ordinary course of business. These actions may relate to ~~trademarks~~trademark and other intellectual property, licensing arrangements, real estate, importing or exporting regulations, taxation, employee ~~relations~~relation matters or other topics. We are not currently a party to any litigation or regulatory action or aware of any proceedings contemplated by governmental authorities that we believe could reasonably be expected to have a material impact on our financial position, results of operations or cash flows. However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of additional factors not presently known or determinations by judges, juries, or others which are not consistent with our evaluation of the possible liability or outcome of such litigation or claims.

ITEM 1A. RISK FACTORS

Our business is subject to numerous risks. Investors should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for Fiscal ~~2017,~~2018, 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 are not presently known to us ~~or that we currently consider immaterial~~ may also adversely affect our business. The risks described in our Annual Report on Form 10-K for ~~Fiscal 2017~~2018 are not the only risks facing our company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)	During the Third Quarter of Fiscal 2019, we did not sell any unregistered equity securities.

(b)

We have certain stock incentive plans as described in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for Fiscal 2018, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the vesting of shares of our stock. During the Third Quarter of Fiscal 2019, no shares were repurchased pursuant to these plans.

~~(a)During the Third Quarter of Fiscal 2018, we did not make any unregistered sales of our equity securities.~~

~~(c)~~We have certain stock incentive plans as described in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for Fiscal 2017, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the vesting of shares of our stock. During the Third Quarter of Fiscal 2018, no shares were repurchased pursuant to these plans.

In March 2017, our Board of Directors authorized us to spend up to $50 million to repurchase shares of our stock. This authorization superseded and replaced all previous authorizations to repurchase shares of our stock and has no automatic expiration. ~~As of November 3, 2018, no shares of our stock had been repurchased pursuant to this authorization.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None

~~None~~

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ITEM 6. EXHIBITS

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3.1
~~3.1~~		Restated Articles of Incorporation of Oxford Industries, Inc. (filed as Exhibit 3.1 to the ~~Company's~~Company’s Form 10-Q for the fiscal quarter ended July 29, 2017)
3.2		Bylaws of Oxford Industries, Inc., as ~~amended.~~amended (filed as Exhibit 3.2 to the ~~Company's~~Company’s Form 10-K for Fiscal ~~2017)~~ 2017)
31.1		Section 302 Certification by Principal Executive Officer.*
31.2		Section 302 Certification by Principal Financial Officer.*
32		Section 906 Certification by Principal Executive Officer and Principal Financial Officer.*
101.INS		XRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL Instance Document*tags are embedded within the Inline XBRL Document
101.SCH		XBRL Taxonomy Extension Schema Document*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB		XBRL Taxonomy Extension Label Linkbase Document*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*
104		Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
		* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


December 12, 2019
~~December 13, 2018~~	OXFORD INDUSTRIES, INC.
	~~(Registrant)~~
	(Registrant)

	/s/ K. Scott Grassmyer
	K. Scott Grassmyer
	Executive Vice President - Finance, Chief Financial Officer and Controller
	(Authorized Signatory)



	November 3, 2018			February 3, 2018			October 28, 2017
ASSETS
Current Assets
Cash and cash equivalents	$	7,413		$	6,343		$	6,077
Receivables, net	69,400			67,542			73,724
Inventories, net	138,150			126,812			127,301
Prepaid expenses and other current assets	36,937			35,421			27,619
Total Current Assets	$	251,900		$	236,118		$	234,721
Property and equipment, net	194,228			193,533			191,038
Intangible assets, net	176,735			178,858			175,057
Goodwill	66,618			66,703			63,443
Other non-current assets, net	23,272			24,729			24,250
Total Assets	$	712,753		$	699,941		$	688,509

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	64,429		$	66,175		$	59,230
Accrued compensation	25,426			29,941			24,434
Other accrued expenses and liabilities	34,984			36,802			30,542
Liabilities related to discontinued operations	—			2,092			3,709
Total Current Liabilities	$	124,839		$	135,010		$	117,915
Long-term debt	32,211			45,809			72,131
Other non-current liabilities	73,434			74,029			73,487
Deferred taxes	16,922			15,269			16,829
Liabilities related to discontinued operations	—			—			972
Commitments and contingencies
Shareholders’ Equity
Common stock, $1.00 par value per share	16,956			16,839			16,833
Additional paid-in capital	140,876			136,664			134,561
Retained earnings	312,604			280,395			260,809
Accumulated other comprehensive loss	(5,089		)	(4,074		)	(5,028		)
Total Shareholders’ Equity	$	465,347		$	429,824		$	407,175
Total Liabilities and Shareholders’ Equity	$	712,753		$	699,941		$	688,509



	Third Quarter Fiscal 2018		Third Quarter Fiscal 2017			First Nine Months Fiscal 2018		First Nine Months Fiscal 2017
Net sales	$	233,662	$	235,960		$	808,931	$	793,032
Cost of goods sold	104,383		110,784			336,209		342,477
Gross profit	$	129,279	$	125,176		$	472,722	$	450,555
SG&A	128,687		127,091			414,747		393,193
Royalties and other operating income	3,113		3,039			10,616		10,123
Operating income	$	3,705	$	1,124		$	68,591	$	67,485
Interest expense, net	489		683			1,872		2,355
Earnings before income taxes	$	3,216	$	441		$	66,719	$	65,130
Income taxes	1,355		(631		)	17,107		24,172
Net earnings	$	1,861	$	1,072		$	49,612	$	40,958

Net earnings per share:
Basic	$	0.11	$	0.06		$	2.98	$	2.47
Diluted	$	0.11	$	0.06		$	2.95	$	2.45

Weighted average shares outstanding:
Basic	16,694		16,618			16,672		16,591
Diluted	16,870		16,735			16,826		16,710

Dividends declared per share	$	0.34	$	0.27		$	1.02	$	0.81



	First Nine Months Fiscal 2018			First Nine Months Fiscal 2017
Cash Flows From Operating Activities:
Net earnings	$	49,612		$	40,958
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	29,878			29,779
Amortization of intangible assets	2,055			1,733
Equity compensation expense	5,510			4,616
Amortization of deferred financing costs	318			317
Deferred income taxes	1,501			3,376
Changes in working capital, net of acquisitions and dispositions:
Receivables, net	(2,286		)	(17,227		)
Inventories, net	(14,346		)	17,017
Prepaid expenses and other current assets	943			(2,713		)
Current liabilities	(9,244		)	(14,217		)
Other non-current assets, net	1,113			(241		)
Other non-current liabilities	(436		)	1,880
Cash provided by operating activities	$	64,618		$	65,278
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired	(354		)	(5,055		)
Purchases of property and equipment	(30,914		)	(26,356		)
Cash used in investing activities	$	(31,268	)	$	(31,411	)
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements	(221,750		)	(199,765		)
Proceeds from revolving credit arrangements	208,152			180,387
Proceeds from issuance of common stock	1,170			1,071
Repurchase of equity awards for employee tax withholding liabilities	(2,351		)	(2,206		)
Cash dividends declared and paid	(17,286		)	(13,642		)
Cash used in financing activities	$	(32,065	)	$	(34,155	)
Net change in cash and cash equivalents	$	1,285		$	(288	)
Effect of foreign currency translation on cash and cash equivalents	(215		)	33
Cash and cash equivalents at the beginning of year	6,343			6,332
Cash and cash equivalents at the end of the period	$	7,413		$	6,077
Supplemental disclosure of cash flow information:
Cash paid for interest, net	$	1,598		$	2,098
Cash paid for income taxes	$	16,133		$	19,536



	Third Quarter Fiscal 2018
	Common Stock			APIC			Retained Earnings			AOCI			Total
August 4, 2018	$	16,951		$	138,613		$	316,507		$	(4,939	)	$	467,132
Net earnings and other comprehensive income	—			—			1,861			(150		)	1,711
Shares issued under equity plans	5			351			—			—			356
Compensation expense for equity awards	—			1,912			—			—			1,912
Repurchase of shares	—			—			—			—			—
Cash dividends declared and paid	—			—			(5,764		)	—			(5,764		)
Cumulative effect of change in accounting standards	—			—			—			—			—
November 3, 2018	$	16,956		$	140,876		$	312,604		$	(5,089	)	$	465,347
	Third Quarter Fiscal 2017
	Common Stock			APIC			Retained Earnings			AOCI			Total
July 29, 2017	$	16,827		$	132,668		$	264,282		$	(4,411	)	$	409,366
Net earnings and other comprehensive income	—			—			1,072			(617		)	455
Shares issued under equity plans	6			352			—			—			358
Compensation expense for equity awards	—			1,541			—			—			1,541
Repurchase of shares	—			—			—			—			—
Cash dividends declared and paid	—			—			(4,545		)	—			(4,545		)
Cumulative effect of change in accounting standards	—			—			—			—			—
October 28, 2017	$	16,833		$	134,561		$	260,809		$	(5,028	)	$	407,175
	First Nine Months Fiscal 2018
	Common Stock			APIC			Retained Earnings			AOCI			Total
February 3, 2018	$	16,839		$	136,664		$	280,395		$	(4,074	)	$	429,824
Net earnings and other comprehensive income	—			—			49,612			(1,015		)	48,597
Shares issued under equity plans	147			1,023			—			—			1,170
Compensation expense for equity awards	—			5,510			—			—			5,510
Repurchase of shares	(30		)	(2,321		)	—			—			(2,351		)
Cash dividends declared and paid	—			—			(17,286		)	—			(17,286		)
Cumulative effect of change in accounting standards	—			—			(117		)	—			(117		)
November 3, 2018	$	16,956		$	140,876		$	312,604		$	(5,089	)	$	465,347
	First Nine Months Fiscal 2017
	Common Stock			APIC			Retained Earnings			AOCI			Total
January 28, 2017	$	16,769		$	131,144		$	233,493		$	(5,276	)	$	376,130
Net earnings and other comprehensive income	—			—			40,958			248			41,206
Shares issued under equity plans	104			967			—			—			1,071
Compensation expense for equity awards	—			4,616			—			—			4,616
Repurchase of shares	(40		)	(2,166		)	—			—			(2,206		)
Cash dividends declared and paid	—			—			(13,642		)	—			(13,642		)
Cumulative effect of change in accounting standards	—			—			—			—			—
October 28, 2017	$	16,833		$	134,561		$	260,809		$	(5,028	)	$	407,175



	Third Quarter of Fiscal 2018
	Net Sales		Retail	E-commerce	Restaurant	Wholesale	Other
Tommy Bahama	$	123,130	46%	14%	13%	27%	—%
Lilly Pulitzer	68,213		35%	53%	—%	12%	—%
Lanier Apparel	29,037		—%	—%	—%	100%	—%
Southern Tide	9,496		—%	16%	—%	84%	—%
Corporate and Other	3,786		—%	50%	—%	34%	16%
Total	$	233,662	35%	24%	7%	34%	—%
	Third Quarter of Fiscal 2017
	Net Sales		Retail	E-commerce	Restaurant	Wholesale	Other
Tommy Bahama	$	123,895	47%	11%	13%	29%	—%
Lilly Pulitzer	59,244		35%	53%	—%	12%	—%
Lanier Apparel	43,110		—%	—%	—%	100%	—%
Southern Tide	9,217		—%	16%	—%	84%	—%
Corporate and Other	494		—%	—%	—%	—%	100%
Total	$	235,960	33%	20%	7%	40%	—%
	First Nine Months of Fiscal 2018
	Net Sales		Retail	E-commerce	Restaurant	Wholesale	Other
Tommy Bahama	$	482,990	48%	17%	13%	22%	—%
Lilly Pulitzer	208,463		44%	35%	—%	21%	—%
Lanier Apparel	72,806		—%	—%	—%	100%	—%
Southern Tide	34,745		—%	16%	—%	84%	—%
Corporate and Other	9,927		—%	54%	—%	27%	19%
Total	$	808,931	40%	20%	8%	32%	—%
	First Nine Months of Fiscal 2017
	Net Sales		Retail	E-commerce	Restaurant	Wholesale	Other
Tommy Bahama	$	483,971	49%	14%	13%	24%	—%
Lilly Pulitzer	192,045		38%	33%	—%	29%	—%
Lanier Apparel	84,314		—%	—%	—%	100%	—%
Southern Tide	31,254		—%	17%	—%	83%	—%
Corporate and Other	1,448		—%	—%	—%	—%	100%
Total	$	793,032	39%	17%	8%	36%	—%



	Third Quarter Fiscal 2018				Third Quarter Fiscal 2017					$ Change			% Change
Net sales	$	233,662	100.0	%	$	235,960		100.0	%	$	(2,298	)	(1.0	)%
Cost of goods sold	104,383		44.7	%	110,784			47.0	%	(6,401		)	(5.8	)%
Gross profit	$	129,279	55.3	%	$	125,176		53.0	%	$	4,103		3.3	%
SG&A	128,687		55.1	%	127,091			53.9	%	1,596			1.3	%
Royalties and other operating income	3,113		1.3	%	3,039			1.3	%	74			2.4	%
Operating income	$	3,705	1.6	%	$	1,124		0.5	%	$	2,581		229.6	%
Interest expense, net	489		0.2	%	683			0.3	%	(194		)	(28.4	)%
Earnings before income taxes	$	3,216	1.4	%	$	441		0.2	%	$	2,775		629.3	%
Income taxes	1,355		0.6	%	(631		)	(0.3	)%	1,986			NM
Net earnings	$	1,861	0.8	%	$	1,072		0.5	%	$	789		73.6	%



	Third Quarter Fiscal 2018		Third Quarter Fiscal 2017
Full-price retail stores and outlets	35	%	33	%
E-commerce	24	%	20	%
Restaurant	7	%	7	%
Wholesale	34	%	40	%
Total	100	%	100	%



	Third Quarter Fiscal 2018		Third Quarter Fiscal 2017
Full-price retail stores	35	%	35	%
E-commerce	53	%	53	%
Wholesale	12	%	12	%
Total	100	%	100	%



($ in thousands)	November 3, 2018			February 3, 2018			October 28, 2017			January 28, 2017
Total current assets	$	251,900		$	236,118		$	234,721		$	231,628
Total current liabilities	$	124,839		$	135,010		$	117,915		$	131,396
Working capital	$	127,061		$	101,108		$	116,806		$	100,232
Working capital ratio	2.02			1.75			1.99			1.76
Debt to total capital ratio	6		%	10		%	15		%	20		%



	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Net sales	25	%	26	%	22	%	27	%
Operating income	35	%	42	%	1	%	22	%