UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

	For the quarterly period ended ~~August 3, 2019~~May 2, 2020

	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
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

999 Peachtree Street, N.E., Suite 688, Atlanta, Georgia 30309

(Address of principal executive offices) (Zip Code)

(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 ☒ 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 ☒ 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 ☒	Accelerated filer ☐	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 ☒

As of ~~August 30, 2019,~~June 5, 2020, there were ~~17,034,929~~16,717,988 shares of the registrant’s common stock outstanding.

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OXFORD INDUSTRIES, INC.

INDEX TO FORM 10-Q

For the ~~Second~~First Quarter of Fiscal ~~2019~~2020


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)	5
Condensed Consolidated Statements of Operations (Unaudited)	6
Condensed Consolidated Statements of Comprehensive Income (Unaudited)	7
Condensed Consolidated Statements of Cash Flows (Unaudited)	8
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1618
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4035
Item 4. Controls and Procedures	4135
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	4236
Item 1A. Risk Factors	4236
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4237
Item 3. Defaults Upon Senior Securities	4238
Item 4. Mine Safety Disclosures	4238
Item 5. Other Information	4238
Item 6. Exhibits	4338
~~Signatures~~SIGNATURES	4439

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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, the impact of the current coronavirus (COVID-19) pandemic (which among other things, may affect many of the following risks); demand for our products, which may be impacted by competitive conditions and/or evolving consumer shopping patterns; macroeconomic factors that may impact consumer discretionary spending for apparel and related products; ~~the timing of shipments requested by our wholesale customers; weather; expected pricing levels;~~ 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; changes in international, federal or state tax, trade and other laws and regulations, including the potential imposition of additional duties; weather; fluctuations and volatility in global financial markets; retention of and disciplined execution by key management; the timing and cost of store and restaurant openings and remodels as well as other capital expenditures; 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 potential imposition of additional duties, tariffs, taxes or other charges or barriers to trade resulting from ongoing trade developments with China and its impact on global markets, acquisition and disposition activities, including our ability to timely recognize expected synergies from 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; the impact of the CARES Act and other legislation; changes in accounting standards and related guidance; and factors that could affect our consolidated effective tax ~~rate.~~rate, including the opportunity to carry back anticipated Fiscal 2020 operating losses to pre U.S. Tax Reform periods. Forward-looking statements reflect our expectations at the time such ~~forward looking~~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,I. Item 1A. Risk Factors contained in our Annual Report on Form 10-K for Fiscal ~~2018,~~2019, as updated in Part II, Item 1A. Risk Factors contained in this report, 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.

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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; ~~and~~ "TBBC" means The Beaufort Bonnet ~~Company. Unless otherwise indicated, all references to assets,~~

~~Table of Contents~~

~~liabilities, revenues, expenses or other information in this report reflect continuing operations.~~Company; “CARES Act” means the Coronavirus Aid, Relief and Economic Security Act; and “U.S. Tax Reform” means the United States Tax Cuts and Jobs Act as enacted on December 22, 2017. Additionally, the terms listed below reflect the respective period noted:


Fiscal 2021		52 weeks ending January 29, 2022
Fiscal 2020		52 weeks ending January 30, 2021
Fiscal 2019		52 weeks ~~ending~~ended February 1, 2020
Fourth Quarter Fiscal ~~2018~~2020		5213 weeks ~~ended February 2, 2019~~ending January 30, 2021
Third Quarter Fiscal ~~2017~~2020		5313 weeks ending October 31, 2020
Second Quarter Fiscal 2020		13 weeks ending August 1, 2020
First Quarter Fiscal 2020		13 weeks ended ~~February 3, 2018~~May 2, 2020
Fourth Quarter Fiscal 2019		13 weeks ~~ending~~ended February 1, 2020
Third Quarter Fiscal 2019		13 weeks ~~ending~~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~~

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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)


	August 3,		February 2,		August 4,		May 2,		February 1,		May 4,
	2019		2019		2018		2020		2020		2019
ASSETS
Current Assets
Cash and cash equivalents	$	30,756	$	8,327	$	7,054	$	181,775	$	52,460	$	5,501
Receivables, net		59,176		69,037		69,724		51,055		58,724		85,857
Inventories, net		152,672		160,656		123,924		169,495		152,229		157,221
Prepaid expenses and other current assets		22,440		31,768		29,393		21,367		25,413		24,588
Total Current Assets	$	265,044	$	269,788	$	230,095	$	423,692	$	288,826	$	273,167
Property and equipment, net		189,410		192,576		195,378		188,568		191,517		191,104
Intangible assets, net		175,591		176,176		177,418		157,015		175,005		175,883
Goodwill		66,585		66,621		66,581		23,802		66,578		66,597
Operating lease assets		288,928		—		—		274,778		287,181		294,131
Other non-current assets, net		24,636		22,093		23,918		29,615		24,262		23,543
Total Assets	$	1,010,194	$	727,254	$	693,390	$	1,097,470	$	1,033,369	$	1,024,425
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	48,998	$	81,612	$	51,487	$	40,432	$	65,491	$	52,121
Accrued compensation		19,195		24,226		21,606		11,373		19,363		19,719
Current operating lease liabilities		54,044		—		—		66,128		50,198		53,683
Other accrued expenses and liabilities		41,882		36,371		37,828		35,194		42,727		40,778
Total Current Liabilities	$	164,119	$	142,209	$	110,921	$	153,127	$	177,779	$	166,301
Long-term debt		—		12,993		24,936		207,618		—		33,182
Non-current operating lease liabilities		290,133		—		—		271,810		291,886		295,399
Other non-current liabilities		17,077		75,286		74,649		17,101		18,566		16,707
Deferred taxes		19,916		18,411		15,752		9,119		16,540		19,664
Commitments and contingencies		—		—		—		—		—		—
Shareholders’ Equity
Common stock, $1.00 par value per share		17,035		16,959		16,951		16,718		17,040		17,019
Additional paid-in capital		145,123		142,976		138,613		149,634		149,426		142,761
Retained earnings		362,407		323,515		316,507		277,595		366,793		338,875
Accumulated other comprehensive loss		(5,616)		(5,095)		(4,939)		(5,252)		(4,661)		(5,483)
Total Shareholders’ Equity	$	518,949	$	478,355	$	467,132	$	438,695	$	528,598	$	493,172
Total Liabilities and Shareholders’ Equity	$	1,010,194	$	727,254	$	693,390	$	1,097,470	$	1,033,369	$	1,024,425

See accompanying notes.

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)


	Second Quarter				First Half				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Net sales	$	302,000	$	302,641	$	583,973	$	575,269	$	160,343	$	281,973
Cost of goods sold		122,175		123,344		238,379		231,826		66,269		116,204
Gross profit	$	179,825	$	179,297	$	345,594	$	343,443	$	94,074	$	165,769
SG&A		143,403		146,340		283,217		286,060		123,001		139,814
Impairment of goodwill and intangible assets										60,452		—
Royalties and other operating income		3,837		3,556		7,624		7,503		3,890		3,787
Operating income	$	40,259	$	36,513	$	70,001	$	64,886
Operating (loss) income									$	(85,489)	$	29,742
Interest expense, net		419		602		1,090		1,383		658		671
Earnings before income taxes	$	39,840	$	35,911	$	68,911	$	63,503
Income taxes		10,004		8,727		17,418		15,752
Net earnings	$	29,836	$	27,184	$	51,493	$	47,751
(Loss) earnings before income taxes									$	(86,147)	$	29,071
Income tax (benefit) provision										(19,363)		7,414
Net (loss) earnings									$	(66,784)	$	21,657

Net earnings per share:
Net (loss) earnings per share:
Basic	$	1.78	$	1.63	$	3.08	$	2.87	$	(4.02)	$	1.30
Diluted	$	1.76	$	1.61	$	3.05	$	2.84	$	(4.02)	$	1.29
Weighted average shares outstanding:
Basic		16,760		16,683		16,736		16,661		16,612		16,713
Diluted		16,907		16,840		16,878		16,804		16,612		16,848
Dividends declared per share	$	0.37	$	0.34	$	0.74	$	0.68	$	0.25	$	0.37

See accompanying notes.

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Second Quarter				First Half				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Net earnings	$	29,836	$	27,184	$	51,493	$	47,751
Net (loss) earnings									$	(66,784)	$	21,657
Other comprehensive income (loss), net of taxes:
Net foreign currency translation adjustment		(133)		(284)		(521)		(865)		(591)		(388)
Comprehensive income	$	29,703	$	26,900	$	50,972	$	46,886
Comprehensive (loss) income									$	(67,375)	$	21,269

See accompanying notes.

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	First Half				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Cash Flows From Operating Activities:
Net earnings	$	51,493	$	47,751
Net (loss) earnings					$	(66,784)	$	21,657
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		19,402		20,224		10,410		9,845
Amortization of intangible assets		584		1,373		283		292
Impairment of goodwill and intangible assets						60,452		—
Equity compensation expense		3,791		3,598		1,682		1,876
Amortization of deferred financing costs		212		212		86		106
Deferred income taxes		1,274		330
Changes in working capital, net of acquisitions and dispositions:
Deferred income taxes (benefit) expense						(7,422)		1,019
Effect of changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net		10,131		(2,460)		7,744		(17,088)
Inventories, net		7,680		19		(17,551)		3,208
Prepaid expenses and other current assets		3,825		8,494		4,031		1,811
Current liabilities		(31,983)		(23,366)		(24,752)		(29,170)
Other balance sheet changes		858		1,357		(14,028)		356
Cash provided by operating activities	$	67,267	$	57,532
Cash used in operating activities					$	(45,849)	$	(6,088)
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired		—		(302)
Purchases of property and equipment		(15,976)		(22,349)		(8,591)		(8,282)
Cash used in investing activities	$	(15,976)	$	(22,651)	$	(8,591)	$	(8,282)
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements		(122,241)		(165,928)		(22,767)		(77,323)
Proceeds from revolving credit arrangements		109,248		145,055		230,386		97,512
Deferred financing costs paid		(894)		—
Repurchase of common stock						(18,053)		—
Proceeds from issuance of common stock		885		814		406		422
Repurchase of equity awards for employee tax withholding liabilities		(2,453)		(2,351)		(1,870)		(2,453)
Cash dividends declared and paid		(12,601)		(11,522)		(4,194)		(6,297)
Other financing activities		(1,033)		—		—		(282)
Cash used in financing activities	$	(29,089)	$	(33,932)
Cash provided by financing activities					$	183,908	$	11,579
Net change in cash and cash equivalents	$	22,202	$	949	$	129,468	$	(2,791)
Effect of foreign currency translation on cash and cash equivalents		227		(238)		(153)		(35)
Cash and cash equivalents at the beginning of year		8,327		6,343		52,460		8,327
Cash and cash equivalents at the end of the period	$	30,756	$	7,054	$	181,775	$	5,501
Supplemental disclosure of cash flow information:
Cash paid for interest, net	$	971	$	1,211
Cash paid for income taxes	$	8,416	$	11,839

See accompanying notes.

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OXFORD INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~SECOND~~FIRST QUARTER OF FISCAL ~~2019~~2020

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. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our full fiscal year.

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~~We assessed certain accounting matters, including the carrying value of goodwill, intangible assets and long-lived assets, provisions for credit losses, inventory markdowns and the estimated effective tax rate, that require consideration of forecasted financial information based on information reasonably available to us as well as the uncertain future impacts of the novel coronavirus (COVID-19) pandemic. These assessments resulted in the recognition of certain amounts in the First Quarter of Fiscal 2020, as discussed below. Future changes in the business environment, our expectations and assumptions as compared to the information at the time of this filing regarding the magnitude and duration of the COVID-19 pandemic, and other factors could result in additional material impacts to our consolidated financial statements in future periods.

COVID-19 Pandemic

In March 2020, the World Health Organization characterized the outbreak of COVID-19 as a pandemic. COVID-19 had a significant effect on overall economic conditions and our operations, resulting in a significant net sales reduction and a net loss in the First Quarter of Fiscal 2020. While our mission remains the enhancement of long-term shareholder value, our focus during this crisis has been, and will continue to be, the health and well-being of our employees, customers and communities as well as protecting our brands and preserving liquidity.

Due to the COVID-19 pandemic, we saw reduced consumer traffic starting in early March 2020 and temporarily closed all our retail and restaurant locations in North America on March 17, 2020. Subsequent to those closures, we also temporarily closed all our retail locations in Australia.

The COVID-19 pandemic is expected to continue to have a material adverse impact on our business, financial condition, results of operations and cash flows for the ~~interim~~foreseeable future, including as a result of temporary closure of our retail and restaurant locations, which continued into the Second Quarter of Fiscal 2020; decreased customer traffic in stores and restaurants even as we reopen locations in accordance with federal, state and local guidelines, including due to limited operating hours and capacity and seating limitations; uncertainty as to continued strength of our brands’ e-commerce websites during the pendency of the pandemic; overall changes in consumer confidence and consumer spending habits; any potential disruptions to our supply chain; and a slowdown in the U.S. and global economies.

For many reasons, including those identified above, the full magnitude of the COVID-19 pandemic is difficult to predict at this time, and its ultimate duration and severity will depend on future developments. We believe that cash on hand and our credit facility provide adequate funds to support our operating, capital expenditure and debt service requirements for Fiscal 2020 and beyond. We could also experience other potential adverse impacts as a result of the COVID-19 pandemic including charges resulting from adjustments to the carrying amount of goodwill, intangible assets and long-lived assets, provisions for credit losses and inventory markdowns as well as potential changes to the estimated effective tax rate.

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Due to the COVID-19 pandemic in the First Quarter of Fiscal 2020, net sales in each of our operating groups decreased from prior periods ~~presented are not necessarily indicative~~resulting in significantly lower operating results, including operating losses in each group other than Lilly Pulitzer. As a result of the COVID-19 impact on our operating results, ~~to be expected~~as well as lower operating results projected for future periods, we concluded that a goodwill impairment test triggering event had occurred for the goodwill associated with our Lilly Pulitzer, Southern Tide and TBBC reporting units. Further, we determined that an intangible asset impairment test triggering event had occurred for our ~~full fiscal year.~~indefinite-lived trademarks for Tommy Bahama, Lilly Pulitzer and Southern Tide. These goodwill and indefinite-lived intangible asset triggering events required the need for a quantitative interim impairment assessment over these reporting units and indefinite-lived intangible assets, in accordance with our accounting policies as described in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for Fiscal 2019. These assessments concluded that the fair values of the Southern Tide goodwill and indefinite-lived intangible assets as of May 2, 2020 did not exceed their respective carrying values, resulting in impairment charges as discussed in Note 4. These impairment charges, which totaled $60 million, were recorded in impairment of goodwill and intangible assets in our consolidated statements of operations. Additionally, due to the lower operating results and lower projected operating results, we performed recoverability tests for certain other non-current assets, including property and equipment, finite-lived intangible assets and operating lease assets, and determined that the amounts included in the asset group are recoverable, except for a $0.2 million charge related to a finite-lived intangible asset in Lanier Apparel.

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,~~2019, except for the adoption of the ~~new lease accounting~~credit losses and income tax guidance ~~in Fiscal 2019 as~~ discussed ~~below and in Note 5.~~below.

Accounting Standards 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 are required to recognize (1) 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. The guidance was adopted on the first day of the First Quarter of Fiscal 2019 using a modified retrospective approach. The modified retrospective approach allows us to apply the standard and related disclosures to the financial statements for the period of adoption and apply the previous guidance in the prior year comparative periods. The adoption of the new guidance had a material impact on our condensed consolidated balance sheet as a result of the non-cash recognition of operating lease assets and operating lease liabilities, but did not have a material impact on our consolidated statements of operations or cash flows. At adoption of the revised lease accounting guidance, we elected to adopt the package of transition practical expedients and, therefore, have not reassessed (1) whether exiting 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~~2020

In June 2016, the FASB issued guidance, as amended, on the measurement of credit losses on financial instruments. This guidance amends the ~~impairment~~previous incurred loss model by requiring that companies use a forward-looking ~~approach based on~~current expected ~~losses~~loss approach to estimate credit losses on certain financial instruments, including trade ~~receivables.~~and other receivables, as well as other financial assets and instruments. We estimate current expected credit losses based on our historical collection experience, the financial condition of our customers, an evaluation of current economic conditions and anticipated trends. We adopted the guidance on the first day of Fiscal 2020 resulting in a charge to retained earnings of $0.5 million and a reduction to various asset amounts included in our consolidated balance sheet at adoption.

In December 2019, the FASB amended its guidance on accounting for income taxes. This guidance ~~will be effective~~amends and simplifies the accounting for income taxes by removing certain exceptions in existing guidance to reduce complexity in certain areas. On the first day of Fiscal 2020, ~~with early~~we adopted the provisions related to classification of franchise taxes partially based on income and changes in ownership of foreign equity method investments or foreign subsidiaries on a modified retrospective basis while the other provisions were adopted on a prospective basis. The adoption ~~permitted. We are currently assessing~~of the ~~impact that adopting this~~new guidance ~~will~~did not have an impact on our consolidated financial ~~statements.~~statements at adoption.

Other recently issued guidance that was adopted in Fiscal 2020 did not have a material impact on our consolidated financial statements upon adoption.

Recently Issued Accounting Standards Applicable to Future Periods

Recent accounting pronouncements pending adoption ~~not discussed above~~ are either not applicable or 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 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.

910

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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 license their trademarks for other product categories, while Lanier Apparel designs, sources and distributes branded and private label 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 inventory 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, including the operations of TBBC, Duck Head and our Lyons, Georgia distribution center. In the First Quarter of Fiscal 2020, as a result of certain organizational and management reporting changes, our Duck Head operations, which were previously included in Lanier Apparel, are considered part of and included in Corporate and Other. Prior period amounts for Lanier Apparel and Corporate and Other were restated to conform to the presentation in the current period.

The table below presents certain financial information (in thousands) about our operating groups, as well as Corporate and Other. 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 ~~2018.~~2019.


	First Quarter
	Fiscal 2020		Fiscal 2019
Net sales
Tommy Bahama	$	86,984	$	164,730
Lilly Pulitzer		49,149		72,595
Lanier Apparel		10,725		26,154
Southern Tide		8,301		14,134
Corporate and Other		5,184		4,360
Consolidated net sales	$	160,343	$	281,973

Depreciation and amortization
Tommy Bahama	$	7,800	$	6,840
Lilly Pulitzer		2,316		2,683
Lanier Apparel		102		140
Southern Tide		144		134
Corporate and Other		331		340
Consolidated depreciation and amortization	$	10,693	$	10,137

Operating income (loss)
Tommy Bahama	$	(23,362)	$	15,192
Lilly Pulitzer		4,146		15,252
Lanier Apparel		(2,637)		1,367
Southern Tide		(63,366)		2,517
Corporate and Other		(270)		(4,586)
Consolidated operating (loss) income	$	(85,489)	$	29,742
Interest expense, net		658		671
(Loss) earnings before income taxes	$	(86,147)	$	29,071

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	May 2, 2020		February 1, 2020		May 4, 2019
Assets
Tommy Bahama ⁽¹⁾	$	650,057	$	668,197	$	677,402
Lilly Pulitzer ⁽²⁾		202,983		199,913		216,635
Lanier Apparel⁽³⁾		39,283		43,533		49,232
Southern Tide ⁽⁴⁾		37,513		99,667		99,740
Corporate and Other⁽⁵⁾		167,634		22,059		(18,584)
Consolidated Total Assets	$	1,097,470	$	1,033,369	$	1,024,425

(1)

Decrease in total assets from February 1, 2020 and May 4, 2019 was primarily due to lower operating lease assets and receivables partially offset by increased inventories.

(2)

Increase in total assets from February 1, 2020 was primarily due to increased inventories partially offset by decreases in various other asset categories. Decrease in total assets from May 4, 2019 was primarily due to lower receivables, operating lease assets and fixed assets partially offset by increased inventories.

(3)

Decrease in total assets from February 1, 2020 and May 4, 2019 was primarily due to lower receivables and inventories.

(4)

Decrease in total assets from February 1, 2020 and May 4, 2019 was primarily due to the $60 million impairment charge for goodwill and intangible assets.

(5)

Increase in total assets from February 1, 2020 and May 4, 2019 was primarily due to increased cash and cash equivalents as well as increased non-current income tax receivables.

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.


	First Quarter Fiscal 2020
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	86,984	39	%	28	%	13	%	20	%	—	%
Lilly Pulitzer		49,149	24	%	50	%	—	%	26	%	—	%
Lanier Apparel		10,725	—	%	—	%	—	%	100	%	—	%
Southern Tide		8,301	—	%	21	%	—	%	79	%	—	%
Corporate and Other		5,184	—	%	63	%	—	%	32	%	5	%
Total	$	160,343	28	%	34	%	7	%	31	%	—	%


	First Quarter Fiscal 2019
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	164,730	47	%	15	%	14	%	24	%	—	%
Lilly Pulitzer		72,595	42	%	25	%	—	%	33	%	—	%
Lanier Apparel		26,154	—	%	—	%	—	%	100	%	—	%
Southern Tide		14,134	—	%	13	%	—	%	87	%	—	%
Corporate and Other		4,360	—	%	60	%	—	%	32	%	8	%
Total	$	281,973	38	%	17	%	9	%	36	%	—	%

3. Revenue Recognition and Receivables: Our revenue consists of direct to consumer sales, including our retail store, e-commerce and restaurant operations, and wholesale sales, as well as royalty income, which is included in royalties and other income in our consolidated statements of operations. We recognize revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our accounting policies related to revenue

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recognition for each type of contract with customers, including a description of the related performance obligations, return rights, allowances, discounts, credit terms and other information, is described in the significant accounting policies described in our Annual Report on Form 10-K for Fiscal 2019.

The table below ~~presents certain financial information~~quantifies the amount of net sales by distribution channel (in thousands) ~~about~~for each period presented.


	First Quarter
	Fiscal 2020		Fiscal 2019
Retail	$	45,503	$	108,006
E-commerce		53,694		47,989
Restaurant		11,763		23,601
Wholesale		49,058		101,926
Other		325		451
Net sales	$	160,343	$	281,973

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. We record 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. As of May 2, 2020, February 1, 2020 and May 4, 2019, reserve balances recorded as a reduction to receivables related to these items were $9 million, $9 million and $8 million, respectively.

We extend credit to certain wholesale customers based on an evaluation of the customer’s financial capacity and condition, usually without requiring collateral. In circumstances where we become aware of a specific wholesale customer’s inability to meet its financial obligations, a specific provision for credit losses is taken as a reduction to accounts receivable to reduce the net recognized receivable to the amount reasonably expected to be collected. Such amounts are ultimately written off at the time that the amounts are not considered collectible. For all other wholesale customer receivable amounts, we recognize estimated provisions for credit losses based on our historical collection experience, the financial condition of our customers, an evaluation of current economic conditions, anticipated trends and considering the risk characteristics of the receivables, each of which is subjective and requires certain assumptions. As discussed in Note 1 above, during Fiscal 2020, we estimated these losses using the current expected loss approach including consideration of the expected impact of the ongoing COVID-19 pandemic on our receivables, while in Fiscal 2019, we estimated these losses using the incurred loss model under the previous guidance. We include such charges and write-offs in SG&A in our consolidated statements of operations and as a reduction to receivables, net in our consolidated balance sheets. As of May 2, 2020, February 1, 2020 and May 4, 2019, our provision for credit losses related to receivables was $3 million, $1 million and $1 million, respectively. Provisions for credit losses expense for the First Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019 was $2 million and $0 million, respectively.

Substantially all amounts recognized in receivables, net represent receivables related to contracts with customers. In addition to trade and other receivables, income tax receivables of $1 million, $1 million and $1 million and tenant allowances due from landlord of $2 million, $1 million and $1 million are included in receivables, net in our consolidated balance sheet as of May 2, 2020, February 1, 2020 and May 4, 2019, respectively. As of May 2, 2020, February 1, 2020 and May 4, 2019, prepaid expenses and other current assets included $4 million, $3 million and $3 million, respectively, representing the estimated value of inventory for wholesale and direct to consumer sales returns. We did 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 May 2, 2020, February 1, 2020 and May 4, 2019.

An estimated sales return liability of $5 million, $3 million and $5 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of May 2, 2020, February 1, 2020 and May 4, 2019, 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 $12 million, $12 million and $12 million as of May 2, 2020, February 1, 2020, and May 4, 2019, respectively.

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4. Intangible Assets and Goodwill: As discussed in Note 1, the COVID-19 pandemic has had, and is expected to continue to have, a significant negative impact on each of our operating ~~groups,~~groups. Thus, certain goodwill and indefinite-lived intangible asset impairment testing was required in the First Quarter of Fiscal 2020 and resulted in significant impairment charges in Southern Tide as shown in the tables below.

Intangible assets by category are summarized below (in thousands):


	May 2,		February 1,		May 4,
	2020		2020		2019
Intangible assets with finite lives	$	51,929	$	51,929	$	51,929
Accumulated amortization and impairment		(42,414)		(41,924)		(41,046)
Total intangible assets with finite lives, net		9,515		10,005		10,883

Intangible assets with indefinite lives:
Tommy Bahama Trademarks	$	110,700	$	110,700	$	110,700
Lilly Pulitzer Trademarks		27,500		27,500		27,500
Southern Tide Trademarks		9,300		26,800		26,800
Total intangible assets, net	$	157,015	$	175,005	$	175,883

Intangible assets by operating group and in total, for Fiscal 2019 and the First Quarter of Fiscal 2020 are as follows (in thousands):


	Tommy		Lilly		Lanier		Southern		Corporate
	Bahama		Pulitzer		Apparel		Tide		and Other		Total
Balance February 2, 2019	$	110,700	$	29,216	$	246	$	29,401	$	6,613	$	176,176
Impairment		—		—		—		—		—		—
Amortization		—		(475)		(31)		(291)		(374)		(1,171)
Balance, February 1, 2020		110,700		28,741		215		29,110		6,239		175,005
Impairment		—		—		(207)		(17,500)		—		(17,707)
Amortization		—		(106)		(8)		(72)		(97)		(283)
Balance, May 2, 2020	$	110,700	$	28,635	$	—	$	11,538	$	6,142	$	157,015

Goodwill, by operating group and in total, for Fiscal 2019 and the First Quarter of Fiscal 2020 are as follows (in thousands):


	Tommy		Lilly		Southern		Corporate
	Bahama		Pulitzer		Tide		and Other		Total
Balance February 2, 2019	$	754	$	19,522	$	42,745	$	3,600	$	66,621
Impairment		—		—		—		—		—
Other, including foreign currency		(43)		—		—		—		(43)
Balance, February 1, 2020		711		19,522		42,745		3,600		66,578
Impairment		—		—		(42,745)		—		(42,745)
Other, including foreign currency		(31)		—		—		—		(31)
Balance, May 2, 2020	$	680	$	19,522	$	—	$	3,600	$	23,802

5. Debt: We had $208 million of indebtedness outstanding as of May 2, 2020 under our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”), compared to borrowings of $0 million as of February 1, 2020 and borrowings of $33 million as of May 4, 2019. The U.S. Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified percentages of eligible categories of

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assets, (2) accrues variable-rate interest (weighted average borrowing rate of 1.7% as of May 2, 2020), 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 (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 May 2, 2020, $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 borrowing base, as of May 2, 2020, we had $114 million in unused availability under the U.S. Revolving Credit Agreement, subject to certain limitations on borrowings.

6. Leases: In the ordinary course of business, we enter into real estate lease agreements for retail, food and beverage, office and warehouse/distribution space, as well as ~~Corporate~~leases for certain equipment. Our leases have varying terms and ~~Other.~~expirations and may have provisions to extend, renew or terminate the lease agreement at our discretion, among other terms and conditions. Our real estate lease terms are typically for a period of ten years or less and typically require rent payments with specified rent escalations periodically during the lease term. Our real estate leases usually provide for payments of our pro rata share 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. Also, our retail and restaurant leases often provide for contingent rent based on sales if certain sales thresholds are achieved. For many of our lease agreements, we obtain lease incentives from the landlord for tenant improvement or other allowances. 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. Operating lease liabilities are recognized at the lease commencement date based on the 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. 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 generally recognized on a straight-line basis over the lease term. Variable rental payments for real estate taxes, sales taxes, insurance, other operating expenses and contingent rent based on a percentage of net sales or adjusted periodically for inflation are not included in lease expense used to calculate the present value of lease obligations recognized in our consolidated balance sheet, but instead are recognized as incurred.

We account for the underlying operating lease asset at the individual lease level. Typically, we do not include any renewal or termination options at our discretion in the underlying lease term at the time of lease commencement as the probability of exercise is not reasonably certain. The 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, our estimated incremental borrowing rate. As our leases do not provide an implicit rate, we use an estimated incremental borrowing rate based on information available at commencement date. Our estimated incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis over the lease term to borrow an amount equal to the lease payments.

During the First Quarter of Fiscal 2020, the FASB provided for an optional practical expedient that simplifies how a lessee accounts for rent concessions that are a direct consequence of the COVID-19 pandemic. The practical expedient will only apply when a lease is modified to allow for a rental concession and (1) the revised consideration

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is substantially the same as or less than, the original consideration, (2) the reduction in lease payments relates to payments due on or before June 30, 2021, and (3) no other substantive changes have been made to the terms of the leases. The practical expedient provides that the lessee is not required to assess whether the eligible rent concessions are lease modifications if the above conditions are met for the lease agreement. We have elected to apply the practical expedient for all eligible lease concessions resulting in the rent concession being recorded as an adjustment to variable lease payments and recognized in our statement of operations in that period. The amounts of concessions recognized pursuant to this practical expedient in the First Quarter of Fiscal 2020 were not material.

Substantially all lease expense is included in SG&A in our consolidated statements of operations. For the First Quarter of Fiscal 2020, operating lease expense, which includes amounts used in determining the operating lease liability and operating lease asset, was $16 million and variable lease expense was $8 million, resulting in total lease expense of $25 million. As of May 2, 2020, the weighted-average remaining operating lease term was 6.5 years and the weighted-average discount rate for operating leases was 4.5%. Cash paid for lease amounts included in the measurement of operating lease liabilities in the First Quarter of Fiscal 2020 was $8 million, reflecting that certain amounts related to April and May were not paid during the First Quarter of Fiscal 2020.

As of May 2, 2020, the required lease liability payments for the fiscal years specified below were as follows (in thousands):

Second Quarter

First Half


Fiscal 2019

Fiscal 2018

Fiscal 2019

Fiscal 2018

Net sales









Tommy Bahama

$
188,870

$
192,728

$
353,600

$
359,860

Lilly Pulitzer

75,555

71,623

148,150

140,250

Lanier Apparel

20,905

23,860

47,494

43,769

Southern Tide

12,468

11,777

26,602

25,249

Corporate and Other

4,202

2,653

8,127

6,141

Total net sales

$
302,000

$
302,641

$
583,973

$
575,269

Depreciation and amortization









Tommy Bahama

$
6,907

$
8,260

$
13,747

$
15,326

Lilly Pulitzer

2,381

2,624

5,064

5,103

Lanier Apparel

141

139

281

280

Southern Tide

135

136

269

261

Corporate and Other

285

312

625

627

Total depreciation and amortization

$
9,849

$
11,471

$
19,986

$
21,597

Operating income (loss)









Tommy Bahama

$
23,218

$
20,621

$
38,410

$
34,924

Lilly Pulitzer

20,449

18,421

35,701

34,247

Lanier Apparel

253

825

1,435

1,187

Southern Tide

1,834

1,420

4,351

3,907

Corporate and Other

(5,495)

(4,774)

(9,896)

(9,379)

Total operating income

40,259

36,513

$
70,001

$
64,886

Interest expense, net

419

602

1,090

1,383

Earnings before income taxes

$
39,840

$
35,911

$
68,911

$
63,503


	Operating lease
Remainder of 2020	$	56,795
2021		67,214
2022		63,377
2023		59,126
2024		45,783
2025		31,355
After 2025		64,827
Total lease payments	$	388,477
Less: Difference between discounted and undiscounted lease payments		50,539
Present value of lease liabilities	$	337,938

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~~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.~~

Second Quarter Fiscal 2019


Net Sales

Retail

E-commerce

Restaurant

Wholesale

Other

Tommy Bahama

$
188,870

50
%
23
%
11
%
16
%
—
%
Lilly Pulitzer

75,555

51
%
29
%
—
%
20
%
—
%
Lanier Apparel

20,905

—
%
2
%
—
%
98
%
—
%
Southern Tide

12,468

—
%
22
%
—
%
78
%
—
%
Corporate and Other

4,202

—
%
62
%
—
%
29
%
9
%
Total

$
302,000

44
%
23
%
7
%
26
%
—
%

Second Quarter Fiscal 2018


Net Sales

Retail

E-commerce

Restaurant

Wholesale

Other

Tommy Bahama

$
192,728

50
%
21
%
11
%
18
%
—
%
Lilly Pulitzer

71,623

52
%
27
%
—
%
21
%
—
%
Lanier Apparel

23,860

—
%
—
%
—
%
100
%
—
%
Southern Tide

11,777

—
%
20
%
—
%
80
%
—
%
Corporate and Other

2,653

—
%
51
%
—
%
22
%
27
%
Total

$
302,641

45
%
21
%
7
%
27
%
—
%

First Half Fiscal 2019


Net Sales

Retail

E‑commerce

Restaurant

Wholesale

Other

Tommy Bahama

$
353,600

49
%
19
%
13
%
19
%
—
%
Lilly Pulitzer

148,150

46
%
27
%
—
%
27
%
—
%
Lanier Apparel

47,494

—
%
1
%
—
%
99
%
—
%
Southern Tide

26,602

—
%
17
%
—
%
83
%
—
%
Corporate and Other

8,127

—
%
62
%
—
%
29
%
9
%
Total net sales

$
583,973

41
%
20
%
8
%
31
%
—
%

First Half Fiscal 2018


Net Sales

Retail

E‑commerce

Restaurant

Wholesale

Other

Tommy Bahama

$
359,860

49
%
18
%
13
%
20
%
—
%
Lilly Pulitzer

140,250

48
%
26
%
—
%
26
%
—
%
Lanier Apparel

43,769

—
%
—
%
—
%
100
%
—
%
Southern Tide

25,249

—
%
16
%
—
%
84
%
—
%
Corporate and Other

6,141

—
%
56
%
—
%
23
%
21
%
Total net sales

$
575,269

42
%
19
%
8
%
31
%
—
%

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3.7. 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 Half Fiscal 2019										Fiscal 2019
	Common Stock		APIC		Retained Earnings		AOCI		Total		Common Stock		APIC		Retained Earnings		AOCI		Total
February 2, 2019	$	16,959	$	142,976	$	323,515	$	(5,095)	$	478,355	$	16,959	$	142,976	$	323,515	$	(5,095)	$	478,355
Net earnings and other comprehensive income		—		—		21,657		(388)		21,269
Comprehensive income												—		—		21,657		(388)		21,269
Shares issued under equity plans		91		331		—		—		422		91		331		—		—		422
Compensation expense for equity awards		—		1,876		—		—		1,876		—		1,876		—		—		1,876
Repurchase of shares		(31)		(2,422)		—		—		(2,453)		(31)		(2,422)		—		—		(2,453)
Cash dividends declared and paid		—		—		(6,297)		—		(6,297)		—		—		(6,297)		—		(6,297)
Cumulative effect of change in accounting standards		—		—		—		—		—		—		—		—		—		—
May 4, 2019	$	17,019	$	142,761	$	338,875	$	(5,483)	$	493,172	$	17,019	$	142,761	$	338,875	$	(5,483)	$	493,172
Net earnings and other comprehensive income		—		—		29,836		(133)		29,703
Comprehensive income												—		—		29,836		(133)		29,703
Shares issued under equity plans		16		447		—		—		463		16		447		—		—		463
Compensation expense for equity awards		—		1,915		—		—		1,915		—		1,915		—		—		1,915
Repurchase of shares		—		—		—		—		—		—		—		—		—		—
Cash dividends declared and paid		—		—		(6,304)		—		(6,304)		—		—		(6,304)		—		(6,304)
Cumulative effect of change in accounting standards		—		—		—		—		—		—		—		—		—		—
August 3, 2019	$	17,035	$	145,123	$	362,407	$	(5,616)	$	518,949	$	17,035	$	145,123	$	362,407	$	(5,616)	$	518,949
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
Comprehensive income												—		—		15,332		779		16,111
Shares issued under equity plans												4		327		—		—		331
Compensation expense for equity awards												—		1,922		—		—		1,922
Repurchase of shares												(4)		(271)		—		—		(275)
Cash dividends declared and paid												—		—		(6,307)		—		(6,307)
Cumulative effect of change in accounting standards												—		—		—		—		—
February 1, 2020											$	17,040	$	149,426	$	366,793	$	(4,661)	$	528,598


	First Half Fiscal 2018										First Quarter Fiscal 2020
	Common Stock		APIC		Retained Earnings		AOCI		Total		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
February 1, 2020											$	17,040	$	149,426	$	366,793	$	(4,661)	$	528,598
Comprehensive loss												—		—		(66,784)		(591)		(67,375)
Shares issued under equity plans		128		236		—		—		364		56		350		—		—		406
Compensation expense for equity awards		—		1,718		—		—		1,718		—		1,682		—		—		1,682
Repurchase of shares		(30)		(2,321)		—		—		(2,351)		(378)		(1,824)		(17,721)		—		(19,923)
Cash dividends declared and paid		—		—		(5,759)		—		(5,759)		—		—		(4,194)		—		(4,194)
Cumulative effect of change in accounting standards		—		—		(117)		—		(117)		—		—		(499)		—		(499)
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
May 2, 2020											$	16,718	$	149,634	$	277,595	$	(5,252)	$	438,695

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. NaN amounts were reclassified from AOCI to our consolidated statements of operations for any period presented.

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~~4. Revenue Recognition:~~ Our revenue 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 represents substantially all amounts included in royalties and other income in our consolidated statements of operations. 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, return rights, allowances, discounts, credit terms and other information, is described in the significant accounting policies described in our Annual Report on Form 10-K for Fiscal 2018.

~~The table below quantifies the amount of net sales by distribution channel (in thousands) for each period presented.~~

Second Quarter

First Half


Fiscal 2019

Fiscal 2018

Fiscal 2019

Fiscal 2018

Retail

$
133,250

$
134,581

$
241,256

$
242,316

E-commerce

70,437

63,363

118,426

107,885

Restaurant

20,531

21,467

44,132

46,760

Wholesale

77,273

82,402

179,199

176,778

Other

509

828

960

1,530

Net sales

$
302,000

$
302,641

$
583,973

$
575,269

Substantially all amounts recognized in receivables, net 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. We record 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. As of August 3, 2019, February 2, 2019 and August 4, 2018, reserve balances recorded as a reduction to receivables related to these items were $7 million, $7 million and $7 million, respectively.

In addition to trade and other receivables, income tax receivables of $1 million, $1 million and $6 million and tenant allowances due from landlord of $2 million, $0 million and $2 million are included in receivables, net in our consolidated balance sheet as of August 3, 2019, February 2, 2019 and August 4, 2018, respectively. As of August 3, 2019, February 2, 2019 and August 4, 2018, prepaid expenses and other current assets included $2 million, $2 million and $2 million, respectively, representing the estimated value of inventory for wholesale and direct to consumer sales returns. We did 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 August 3, 2019, February 2, 2019 and August 4, 2018.

An estimated sales return liability of $5 million, $3 million and $4 million for expected direct to consumer returns is classified in other accrued expenses and liabilities in our consolidated balance sheet as of August 3, 2019, February 2, 2019 and August 4, 2018, 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 $11 million, $12 million and $10 million as of August 3, 2019, February 2, 2019, and August 4, 2018, respectively.

~~5. Leases:~~ We enter into real estate lease agreements for retail, food and 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 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 included in 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

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~~lease includes fixed escalation clauses or lease incentives~~During February and March 2020, we repurchased 0.3 million shares of our common stock under an open market stock repurchase program (Rule 10b5-1 plan) pursuant to an existing share repurchase authorization of our Board of Directors. In April 2020, we repurchased 0.1 million shares of our common stock pursuant to our stock incentive plans. Our stock incentive plans are described in Note 8 to our consolidated financial statements included in our Annual Report on Form 10-K for ~~rent holidays, rent expense is generally recognized on a straight-line basis over~~Fiscal 2019. For the ~~initial term~~First Quarter of ~~the lease~~Fiscal 2020, there were 0.2 million shares of restricted stock outstanding that were excluded from the ~~date that~~diluted earnings per share calculation because we ~~take possession~~incurred a net loss for the period and their inclusion would be anti-dilutive.

8. Income Taxes: Our effective income tax rate for the First Quarter of Fiscal 2020 and the ~~space~~First Quarter of Fiscal 2019 was a benefit of 22.5% and ~~assumes that any termination options included in the lease will not be exercised. Contingent rents, including those based on a percentage~~an expense of ~~retail sales over stated levels, and rental payment increases based on a contingent future event have been recognized as the expense is incurred.~~25.5%, respectively. The difference between the ~~rents payable under~~U.S. federal statutory income tax rate of 21% and our effective income tax rate for the ~~lease~~First Quarter of Fiscal 2020 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~~First Quarter 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 as a reduction to rent expense over the term of the lease agreement on a straight-line basis. Deferred rent in our consolidated balance sheets, including tenant improvement allowances and all amounts in non-current and current liabilities, as of February 2,Fiscal 2019 was ~~$61 million.~~

~~Pursuant to~~impacted by a variety of factors, including those discussed in the revised lease accounting guidance adopted in Fiscal 2019, we determine if an arrangement is a lease at contract inception. Operating lease liabilities are recognized at the lease commencement date based on the 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,following paragraph, as well as the ~~discount~~impact of state income taxes, impact of foreign operations rate ~~applied to~~differential, valuation allowances and other carry-forwards, the ~~unpaid lease payments. Operating leases are included~~deductibility of certain charges and changes in ~~operating lease assets, current operating lease liabilities and non-current operating lease liabilities~~enacted tax regulations.

The income tax benefit in ~~our consolidated balance sheet. The operating lease asset at commencement~~the First Quarter of Fiscal 2020 reflects the income tax benefit on the operating ~~lease liability reduced~~losses at the statutory rate of 21% decreased by certain unfavorable items including (1) certain non-deductible impairment charges, resulting in an estimated effective income tax benefit rate of approximately 17% on the impairment charges, and (2) restricted stock which vested in the period with a vesting date price lower than the grant date price. These unfavorable items in the First Quarter of Fiscal 2020 were partially offset by the favorable impact of the CARES Act providing 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~~additional income tax benefit for the ~~underlying~~carry back of the substantial majority of our Fiscal 2020 net operating ~~lease asset at the individual lease level. Typically, we do not include any renewal or termination options at our discretion~~losses to years prior to U.S. Tax Reform, which had a federal income tax rate of 35%. The income tax expense 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, our incremental borrowing rate. As our leases typically do not provide an implicit rate, we use an estimated incremental borrowing rate based on information available at commencement date, or as of February 3, 2019 for any leases in place at adoption of the 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 SG&A in our consolidated statements of operations. For the Second~~First Quarter of Fiscal 2019 ~~operating lease expense~~ was ~~$16 million and variable lease expense~~not impacted by any significant or unusual discrete or other items.

On March 27, 2020, the CARES Act was ~~$8 million, resulting~~signed into law, with applicable provisions reflected in ~~total lease expense of $24 million. For~~our financial statements for the First Half of Fiscal 2019, operating lease expense was $33 million and variable lease expense was $17 million, resulting in total lease expense of $49 million. As of August 3, 2019, the weighted-average remaining operating lease term was seven years and the weighted-average discount rate for operating leases was 5%. Cash paid for lease amounts included in the measurement of operating lease liabilities in the Second Quarter of Fiscal ~~2019 and~~2020. This law includes several taxpayer favorable provisions which may impact us including allowing the ~~First Half~~carryback of ~~Fiscal 2019 was $17 million and $35 million, respectively.~~

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~~As of August 3, 2019, the required lease liability payments for the fiscal years specified below were as follows (in thousands):~~

Operating lease
Remainder of 2019

$
34,369
2020

60,608
2021

63,487
2022

59,825
2023

56,639
2024

43,981
After 2024

86,588
Total lease payments

$
405,497
Less: Difference between discounted and undiscounted lease payments

61,320
Present value of lease liabilities

$
344,177

~~Disclosures related~~net operating losses 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. 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 August 3, 2019 under the U.S. Revolving Credit Agreement, compared to $25 million of borrowings outstanding as of August 4, 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 intereststax reform, accelerated depreciation of certain ~~subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash~~leasehold improvement costs and ~~cash equivalents, eligible trademarks, proceeds~~relaxed interest expense limitations, as well as non-income tax benefits including deferral of employer FICA payments and ~~other personal property.~~an employee retention credit.

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 August 3, 2019, $5 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 borrowing base, as of August 3, 2019, we had $311 million in unused availability under the U.S. Revolving Credit Agreement, subject to 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 2018.~~2019.

OVERVIEW

Business 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.~~products of Lanier Apparel. During Fiscal ~~2018,~~2019, 93% of our net sales were from products bearing brands that we own and ~~69%~~97% of our net sales were ~~through our direct to consumer channels of distribution. In Fiscal 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.~~States.

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

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loyalty and higher price points at retail and create licensing ~~opportunities, which may drive higher earnings.~~opportunities. We believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products to consumers where and when they want them.

We believe the principal competitive factors in the apparel industry are reputation, value, and image of brand names; design; consumer preference; price; quality; marketing; product fulfillment capabilities; and customer service. 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 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 productsDuring Fiscal 2019, 70% of our brands and create an emotional connection with consumers is critical to the success of our brands. 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~~net sales were through our direct to consumer channels ~~consisting~~ of distribution, which consists of our brand-specific full-price retail stores, our e-commerce websites, our Tommy Bahama food and ~~Lilly Pulitzer retail stores~~beverage operations and our ~~e-commerce sites for~~ Tommy Bahama ~~Lilly Pulitzer and Southern Tide, and through~~outlets. The remaining 30% of our net sales are generated from 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 restaurants and Marlin Bars, generally adjacent to a Tommy Bahama full-price retail store location, which we believe further enhance the brand’s image with consumers. Our e-commerce websites 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 include sales of products bearing our lifestyle brands, which complement our direct to consumer operations and provide access to a larger group of ~~consumers. As we seek to maintain~~consumers, and also represent substantially all of the ~~integrity~~net sales 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, Signature Stores for Lilly Pulitzer and Southern Tide, better

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

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 Bahama, e-commerce flash sales in Lilly Pulitzer, and off-price 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.Industry Overview

~~All~~Each of our operating groups ~~operate~~operates in highly competitive apparel markets ~~in which numerous U.S. and foreign-based apparel firms compete.~~that continue to evolve rapidly with the expanding application of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the apparel industry, and our 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. 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~~

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

While ~~this~~the competition and 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.

COVID-19 Pandemic

In March 2020, the World Health Organization characterized the outbreak of a novel coronavirus (COVID-19) as a pandemic. COVID-19 had a significant effect on overall economic conditions and our operations resulting in a 43% net sales reduction and a net loss in the First Quarter of Fiscal 2020. While our mission remains the enhancement of long-term shareholder value, our focus during this crisis has been and will continue to be the health and well-being of our employees, customers and communities as well as protecting our brands and preserving liquidity.

The COVID-19 pandemic is expected to continue to have a material adverse impact on our business, financial condition, results of operations and cash flows for the foreseeable future, including as a result of temporary closure of our retail and restaurant locations, which continued into the Second Quarter of Fiscal 2020; decreased customer traffic in

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~~Specifically,~~stores and restaurants even as we ~~believe~~reopen locations in accordance with federal, state and local guidelines, including due to limited operating hours and capacity and seating limitations; uncertainty as to continued strength of our ~~lifestyle brands have opportunities for long-term growth~~brands’ e-commerce websites during the pendency of the pandemic; overall changes 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~~confidence and mortar store 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. We expect there will continue to be desirable locations to add new retail storesconsumer spending habits; any potential disruptions to our ~~portfolio, but at~~supply chain; and 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 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~~slowdown 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 12% of our consolidated net sales in Fiscal 2018, compared to approximately 14% in Fiscal 2017. The management of wholesale distribution for our lifestyle brands resulted in a decrease in wholesale sales in Fiscal 2018. While we anticipate modest growth in our wholesale sales in Fiscal 2019, there could be additional reductions in wholesale sales in future years, as the amount of sales to certain wholesale accounts could decrease if the number of doors that carry our product decreases, the volume sold for a particular door is reduced or the account is exited altogether. We anticipate that sales increases in our wholesale businesses in the long term will stem primarily from current customers adding within their existing door countU.S. and increasing their online business; increased sales to online retailers; and our selective addition of new 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.global economies.

We believe we ~~must continue~~have adequate liquidity and the financial discipline to ~~invest in our lifestyle brands to take advantage of their long-term growth opportunities. Investments include capital expenditures primarily~~address the near-term challenges related to the ~~direct~~COVID-19 pandemic. With significant uncertainty as to ~~consumer operations, such as technology enhancements, e-commerce initiatives~~the duration 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 employment and other administrative function costs to support ongoing business operations and fuel future sales growth.

~~In the midst~~severity of the ~~changes in~~pandemic and associated restrictions on our industry, an important initiative for us in recent years was to increase the profitability of the Tommy Bahama business. These initiatives generally focused 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 Asia-Pacific operating losses. Whileoperations, we have ~~made progress~~taken a number of actions to mitigate the impact of this pandemic on ~~these initiatives in recent years, we expect~~our business and operations including:

●

we furloughed and laid off a significant number of our retail, restaurant and office employees;

●

certain of our salaried employees, including our Chief Executive Officer, Chief Financial Officer and other executives, took reductions in their base salary;

●

we drew down $200 million from our U.S. Revolving Credit Agreement to increase our cash position and preserve financial flexibility;

●

our Board of Directors reduced the rate of our dividend payable in the First Quarter of Fiscal 2020;

●

in June 2020, our Board of Directors elected to reduce by 50% its cash retainers for the remainder of Fiscal 2020;

●

believing that the payment of rents in respect of our retail store and restaurant leases was inappropriate due to the impact of the COVID-19 pandemic, we suspended rent payments and have been actively negotiating with our landlords on equitable arrangements in respect of the closure and subsequent periods for those operations;

●

we have worked with suppliers to cancel, delay or suspend future product deliveries;

●

we have worked with our wholesale customers to identify suitable changes to our business arrangements;

●

under the CARES Act, we are deferring the employer portion of FICA payments and obtaining employee retention credits for qualifying wages paid to employees who are unable to work during the COVID-19 pandemic; and

●

in many cases, we suspended, cancelled or deferred capital expenditures, reducing our capital expenditure expectations for Fiscal 2020.

We have established management committees, reporting to ~~make further progress~~the Chief Executive Officer on ~~improving the profitability of the Tommy Bahama business in Fiscal 2019 and future years.~~

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 abilityan ongoing basis, to continue to ~~evaluate opportunities~~monitor the COVID-19 pandemic and its impact and are taking the necessary precautionary measures to ~~add additional lifestyle brands to~~protect the health and safety of our ~~portfolio in~~employees. Given the ~~future if we identify appropriate targets that meet our investment criteria. While we are actively exploring acquisition opportunities, investment opportunities for the types~~dynamic nature 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 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 competitivethese circumstances, and the ~~expectations~~uncertain duration and severity of ~~sellers are high relative to~~ the ~~historical~~business disruption caused by the COVID-19 pandemic and its impact on discretionary consumer spending, the financial impact of the pandemic cannot be reasonably estimated at this time but will significantly impact our operating results, cash flows and ~~opportunities of the brand.~~financial position in Fiscal 2020.

~~Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could impact~~For additional information about our business ~~are described in~~and each of our operating groups, see Part I, Item ~~1A. Risk Factors~~1. Business included in our Annual Report on Form 10-K for Fiscal ~~2018.~~2019. Important factors relating to certain risks which could impact our business, including those resulting from the COVID-19 pandemic, are described in Part II, Item 1A. Risk Factors of this report and Part I. Item 1A. Risk Factors of our Annual Report on Form 10-K for Fiscal 2019.

Key Operating Results

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The following table sets forth our consolidated operating results (in thousands, except per share amounts) for the First ~~Half~~Quarter of Fiscal ~~2019~~2020 compared to the First ~~Half~~Quarter of Fiscal ~~2018~~2019:


	First Half				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Net sales	$	583,973	$	575,269	$	160,343	$	281,973
Operating income	$	70,001	$	64,886
Net earnings	$	51,493	$	47,751
Net earnings per diluted share	$	3.05	$	2.84
Operating (loss) income					$	(85,489)	$	29,742
Net (loss) earnings					$	(66,784)	$	21,657
Net (loss) earnings per diluted share					$	(4.02)	$	1.29
Weighted average shares outstanding - diluted		16,878		16,804		16,612		16,848

The ~~higher~~lower net earnings per diluted share in the First ~~Half~~Quarter of Fiscal ~~2019~~2020 was primarily due to ~~higher~~(1) the $60 million of impairment charges for goodwill and intangible assets in Southern Tide, (2) the lower operating ~~income~~results in each operating group primarily due to lower sales resulting from the impact of the COVID-19 pandemic and (3) a lower ~~interest expense.~~effective tax rate in the First Quarter of Fiscal 2020, which resulted in a lower income tax benefit than may have otherwise been recognized. These items were partially offset by ~~lower~~the improved operating results in Corporate and Other, ~~and a higher effective tax rate.~~

~~COMPARABLE SALES~~

We often disclose comparable sales in order to provide additional information regarding changes in our results of operations between periods. Our disclosures of comparable sales include net sales from full-price retail stores and e-commerce sites, excluding sales associated with e-commerce flash clearance sales. We believe that the inclusion of both full-price retail stores and e-commerce sites in the comparable sales disclosures is a more meaningful way of reporting our comparable sales results, given similar inventory planning, allocation and return policies, as well as our cross-channel marketing and other initiatives for the direct to consumer channel. For our comparable sales disclosures, we exclude (1) outlet store sales, warehouse sales and e-commerce flash clearance sales, as those clearance sales are usedwhich was 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 sales disclosures is meaningful in assessing our consolidated results of operations. Comparable sales information reflects net sales, including shipping and handling revenues, if any, associated with product sales.

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

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

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STORE COUNT

The table below provides store count information for Tommy Bahama, ~~and~~ Lilly Pulitzer and Southern Tide as of the dates specified. The table includes our permanent stores and excludes any pop-up or temporary store locations which have an initial lease term of less than 12 months. Due to the impact of the COVID-19 pandemic, as of May 2, 2020 none of these stores were open or operating for business. We began reopening stores and restaurants starting on May 3, 2020 in a phased approach in accordance with local government guidelines and additional safety protocols implemented. As of June 10, 2020, we had reopened approximately 55% of our retail stores and restaurants and barring any material public reopening setbacks, we expect that we will reopen substantially all of our stores and restaurants by the end of June 2020.


	August 3,	February 2,	August 4,	February 3,	May 2,	February 1,	May 4,	February 2,
	2019	2019	2018	2018	2020	2020	2019	2019
Tommy Bahama retail stores	113	113	111	110	110	111	113	113
Tommy Bahama retail-restaurant locations	17	17	18	18	18	16	17	17
Tommy Bahama outlets	37	37	38	38	35	35	37	37
Total Tommy Bahama locations	167	167	167	166	163	162	167	167
Lilly Pulitzer retail stores	63	62	60	57	61	61	63	62
Southern Tide retail stores					1	1	—	—
Total Oxford locations	230	229	227	223	225	224	230	229

RESULTS OF OPERATIONS

~~SECOND~~FIRST QUARTER OF FISCAL ~~2019~~2020 COMPARED TO ~~SECOND~~FIRST QUARTER OF FISCAL ~~2018~~2019

The discussion and tables below compare our statements of operations for the ~~Second~~First Quarter of Fiscal ~~2019~~2020 to the ~~Second~~First Quarter of Fiscal ~~2018.~~2019. 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.

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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 the same period of the prior ~~year.~~year:


	Second Quarter												First Quarter
	Fiscal 2019				Fiscal 2018				$ Change		% Change		Fiscal 2020				Fiscal 2019				$ Change		% Change

Net sales	$	302,000	100.0	%	$	302,641	100.0	%	$	(641)	(0.2)	%	$	160,343	100.0	%	$	281,973	100.0	%	$	(121,630)	(43.1)	%
Cost of goods sold		122,175	40.5	%		123,344	40.8	%		(1,169)	(0.9)	%		66,269	41.3	%		116,204	41.2	%		(49,935)	(43.0)	%
Gross profit	$	179,825	59.5	%	$	179,297	59.2	%	$	528	0.3	%	$	94,074	58.7	%	$	165,769	58.8	%	$	(71,695)	(43.2)	%
SG&A		143,403	47.5	%		146,340	48.4	%		(2,937)	(2.0)	%		123,001	76.7	%		139,814	49.6	%		(16,813)	(12.0)	%
Impairment of goodwill and intangible assets														60,452	37.7	%		—	—	%		60,452	100.0	%
Royalties and other operating income		3,837	1.3	%		3,556	1.2	%		281	7.9	%		3,890	2.4	%		3,787	1.3	%		103	2.7	%
Operating income	$	40,259	13.3	%	$	36,513	12.1	%	$	3,746	10.3	%
Operating (loss) income													$	(85,489)	(53.3)	%	$	29,742	10.5	%	$	(115,231)	NM	%
Interest expense, net		419	0.1	%		602	0.2	%		(183)	(30.4)	%		658	0.4	%		671	0.2	%		(13)	(1.9)	%
Earnings before income taxes	$	39,840	13.2	%	$	35,911	11.9	%	$	3,929	10.9	%
Income taxes		10,004	3.3	%		8,727	2.9	%		1,277	14.6
Net earnings	$	29,836	9.9	%	$	27,184	9.0	%	$	2,652	9.8	%
(Loss) earnings before income taxes													$	(86,147)	(53.7)	%	$	29,071	10.3	%	$	(115,218)	NM	%
Income tax (benefit) provision														(19,363)	(12.1)	%		7,414	2.6	%		(26,777)	NM	%
Net (loss) earnings													$	(66,784)	(41.7)	%	$	21,657	7.7	%	$	(88,441)	NM	%

Net Sales


	Second Quarter								First Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change		Fiscal 2020		Fiscal 2019		$ Change		% Change
Tommy Bahama	$	188,870	$	192,728	$	(3,858)	(2.0)	%	$	86,984	$	164,730	$	(77,746)	(47.2)	%
Lilly Pulitzer		75,555		71,623		3,932	5.5	%		49,149		72,595		(23,446)	(32.3)	%
Lanier Apparel		20,905		23,860		(2,955)	(12.4)	%		10,725		26,154		(15,429)	(59.0)	%
Southern Tide		12,468		11,777		691	5.9	%		8,301		14,134		(5,833)	(41.3)	%
Corporate and Other		4,202		2,653		1,549	58.4	%		5,184		4,360		824	18.9	%
Total net sales	$	302,000	$	302,641	$	(641)	(0.2)	%
Consolidated net sales									$	160,343	$	281,973	$	(121,630)	(43.1)	%

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Consolidated net sales decreased $1$122 million, or 43%, in the ~~Second~~First Quarter of Fiscal ~~2019.~~2020. In response to COVID-19, we closed substantially all of our stores, outlets and restaurants from March 17, 2020 through the end of the quarter and substantially all of our wholesale customers similarly closed their doors, resulting in lower wholesale sales. The ~~decrease~~decreases in ~~consolidated~~ net sales ~~was primarily driven by~~included decreases in (1) ~~a $5~~retail sales of $54 million, ~~net decrease in~~or 58%, (2) wholesale sales ~~primarily driven by reductions in sales at Tommy Bahama and Lanier Apparel, (2) a $2~~of $53 million, ~~decrease in Tommy Bahama outlet store sales, and~~or 52%, (3) ~~a $1 million decrease in~~ restaurant sales ~~in Tommy Bahama.~~of $12 million, or 50%, and (4) outlet sales of $8 million, or 60%. These decreases were partially offset by ~~(1) a $5~~increased e-commerce sales of $6 million, or 3%12%, ~~comparable sales increase~~primarily due to ~~$168 million in the Second Quarter of Fiscal 2019 from $163 million in the Second Quarter of Fiscal 2018~~additional online marketing and ~~(2) an incremental net sales increase of $2 million associated with non-comp retail store operations primarily resulting from an increase at Lilly Pulitzer.~~promotional events by our brands to engage our brands’ consumers online as our e-commerce websites and distribution centers remained open. 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:


	Second Quarter				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Retail	44	%	45	%	28	%	38	%
E-commerce	23	%	21	%	34	%	17	%
Restaurant	7	%	7	%	7	%	9	%
Wholesale	26	%	27	%	31	%	36	%
Total	100	%	100	%	100	%	100	%

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Tommy Bahama:

Tommy Bahama net sales decreased $4$78 million, or 2%47%, in the ~~Second~~First Quarter of Fiscal ~~2019.~~2020. The decrease in net sales in Tommy Bahama ~~net~~included decreases in (1) retail sales ~~was primarily driven by (1) a $3~~of $35 million, ~~decrease in~~(2) wholesale sales ~~reflecting decreases in both full-price and off-price wholesale~~of $21 million, (3) restaurant sales ~~(2) a $2~~of $12 million, ~~decrease in~~(4) outlet store sales ~~primarily due to lower~~of $8 million and (5) e-commerce sales in existing outlet stores and the net sales impact of fewer outlet store locations, (3) a $1 million decrease in restaurant sales primarily reflecting lower sales in existing restaurants and the Third Quarter of Fiscal 2018 closure of the Ginza, Japan restaurant and (4) a net sales decrease of $1 million associated with the operation of non-comp retail stores. These decreases were partially offset by a $3 million, or 3%, comparable sales increase to $111 million in the Second Quarter of Fiscal 2019 from $109 million in the Second Quarter of Fiscal 2018.million. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:


	Second Quarter				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Retail	50	%	50	%	39	%	47	%
E-commerce	23	%	21	%	28	%	15	%
Restaurant	11	%	11	%	13	%	14	%
Wholesale	16	%	18	%	20	%	24	%
Total	100	%	100	%	100	%	100	%

Lilly Pulitzer:

Lilly Pulitzer net sales ~~increased $4~~decreased $23 million, or 6%32%, in the ~~Second~~First Quarter of Fiscal ~~2019.~~2020. The ~~increase~~decrease in net sales in Lilly Pulitzer ~~net~~included decreases in (1) retail sales ~~was primarily driven by (1) an incremental net sales increase~~ of $3$19 million ~~associated with non-comp retail store operations, including the operation of additional retail stores~~ and ~~increased gift card breakage income,~~ (2) ~~a $1 million increase in~~ wholesale sales ~~reflecting higher full-price wholesale sales~~of $11 million. These decreases were partially offset by ~~lower off-price wholesale sales and (3) a 1% comparable sales increase reflecting comparable~~increased e-commerce sales of ~~$51 million in both the Second~~

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~~Quarter of Fiscal 2019 and the Second Quarter of Fiscal 2018.~~$6 million. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:


	Second Quarter				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Retail	51	%	52	%	24	%	42	%
E-commerce	29	%	27	%	50	%	25	%
Wholesale	20	%	21	%	26	%	33	%
Total	100	%	100	%	100	%	100	%

Lanier Apparel:

~~The~~ Lanier Apparel net sales ~~decrease of $3~~decreased $15 million, or ~~12%,~~59% in the ~~Second~~First Quarter of Fiscal ~~2019 was primarily due to decreased volume~~2020 resulting from decreases in ~~various~~replenishment and seasonal ~~in-stock~~programs for the branded and replenishment programs, including initial shipments for a warehouse club program in the Second Quarter of Fiscal 2018 that did not repeat in the Second Quarter of Fiscal 2019. These decreases were partially offset by increases in other programs.private label businesses.

Southern Tide:

~~The~~ Southern Tide net sales ~~increase of $1~~decreased $6 million, or 6%41%, in the ~~Second~~First Quarter of Fiscal ~~2019 was~~2020 primarily due to increased sales in both the e-commerce and wholesale channels of distribution, with e-commerce growing at a faster pace than wholesale during the quarter. The increased wholesale sales reflect increased sales to department stores and Signature Stores, including those that opened in Fiscal 2018, partially offset by lower ~~off-price~~ wholesale sales. The following table presents the proportion of net sales by distribution channel for Southern Tide for each period presented:


	Second Quarter				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
E-commerce	22	%	20	%	21	%	13	%
Wholesale	78	%	80	%	79	%	87	%
Total	100	%	100	%	100	%	100	%

Corporate and Other:

Corporate and Other net sales ~~primarily consist~~increased $1 million, or 19%, in the First Quarter of ~~the~~Fiscal 2020 reflecting increased net sales ofin both TBBC and ~~our Lyons, Georgia distribution center operations. The increase in net sales was primarily due to sales growth in TBBC.~~Duck Head.

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Gross Profit

The tables below present gross profit by operating group and in total for the ~~Second~~First Quarter of Fiscal ~~2019~~2020 and the ~~Second~~First Quarter of Fiscal ~~2018,~~2019, as well as the change between those two periods and gross margin by operating group and in total. Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be

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directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company.


	Second Quarter								First Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change		Fiscal 2020		Fiscal 2019		$ Change		% Change
Tommy Bahama	$	114,526	$	115,954	$	(1,428)	(1.2)	%	$	51,680	$	103,507	$	(51,827)	(50.1)	%
Lilly Pulitzer		51,817		49,082		2,735	5.6	%		31,699		45,481		(13,782)	(30.3)	%
Lanier Apparel		6,025		6,345		(320)	(5.0)	%		2,847		7,225		(4,378)	(60.6)	%
Southern Tide		6,141		6,095		46	0.8	%		1,539		7,152		(5,613)	(78.5)	%
Corporate and Other		1,316		1,821		(505)	(27.7)	%		6,309		2,404		3,905	162.4	%
Total gross profit	$	179,825	$	179,297	$	528	0.3	%
Consolidated gross profit									$	94,074	$	165,769	$	(71,695)	(43.2)	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	705	$	(122)					$	(3,254)	$	141
Tommy Bahama Japan inventory markdown charges	$	—	$	461


	Second Quarter				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Tommy Bahama	60.6	%	60.2	%	59.4	%	62.8	%
Lilly Pulitzer	68.6	%	68.5	%	64.5	%	62.7	%
Lanier Apparel	28.8	%	26.6	%	26.5	%	27.6	%
Southern Tide	49.3	%	51.8	%	18.5	%	50.6	%
Corporate and Other	NM		NM		NM		NM
Consolidated gross margin	59.5	%	59.2	%	58.7	%	58.8	%

The ~~increase~~decrease in consolidated gross profit in the ~~Second~~First Quarter of Fiscal ~~2019~~2020 was primarily due to ~~an improved gross margin, which offset~~ the ~~impact of~~ lower net sales. The ~~improved~~comparable consolidated gross margin reflects ~~increased gross margin in Tommy Bahama, Lilly Pulitzer and Lanier Apparel as well as a change in~~the negative impact of $4 million of inventory markdowns on the lower sales ~~mix as wholesale sales, including Lanier Apparel sales which typically have lower gross margins, represented a lower proportion of our net sales. These favorable changes were~~ partially offset by ~~the net unfavorable impact~~a $3 million LIFO accounting credit in the ~~Second~~First Quarter of Fiscal ~~2019~~2020, with no significant impact of inventory markdowns or LIFO accounting ~~and the Tommy Bahama Japan inventory markdown charges incurred~~ in the ~~Second~~First Quarter of Fiscal ~~2018.~~2020. Changes in gross margin by operating group are discussed below.

Tommy Bahama:

The ~~increase~~decrease in gross margin for Tommy Bahama was primarily driven by (1) a change in sales mix in Tommy Bahama’s direct to consumer business as ~~retail store and e-commerce sales represented~~ a greater proportion of ~~net~~direct to consumer sales ~~while~~were concentrated in Tommy Bahama’s Friends and Family and other promotional events, (2) lower gross margin on wholesale ~~and outlet store sales represented a lower proportion of net~~ sales and ~~(2)~~(3) increased inventory markdowns on the ~~Second Quarter of Fiscal 2018 including certain Tommy Bahama Japan inventory markdown charges with no such charges in the Second Quarter of Fiscal 2019.~~lower sales.

Lilly Pulitzer:

The increase in gross margin for Lilly Pulitzer was primarily due to (1) higher gross margin in the direct to consumer business resulting from higher initial gross margins and less gift with purchase amounts and (2) a change in sales mix as a greater proportion of Lilly Pulitzer sales were direct to consumer sales represented a larger proportion of net sales and the favorable impact of higher gift card breakage income. These favorable items were partially offset by higher costs associated with gift with purchase and other promotion events.sales.

Lanier Apparel:

The ~~increase~~decrease in gross margin for Lanier Apparel was primarily due to inventory markdowns having a ~~change in~~more significant impact on the significantly lower sales ~~mix as a greater proportion of sales~~volume in the ~~Second~~First Quarter of Fiscal ~~2019 were related to higher gross margin programs, while the Second Quarter of Fiscal 2018 included more sales related to a warehouse club program.~~2020.

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Southern Tide:

The decrease in gross margin for Southern Tide was primarily due to increased inventory markdowns, which also had a more significant impact on the ~~prior year including an insurance recovery on certain inventory partially offset by a change~~significantly lower sales volume, and lower gross margin in ~~sales mix as e-commerce~~the wholesale and ~~full-price wholesale sales represented a greater proportion of net sales~~direct to consumer distribution channels reflecting higher discounts and ~~off-price sales represented a lower proportion of net sales.~~allowances.

Corporate and Other:

The gross profit in Corporate and Other primarily reflects ~~(1)~~ the gross profit of TBBC, ~~(2)~~Duck Head and the ~~gross profit of our~~ Lyons, Georgia distribution center ~~and (3)~~as well as the impact of LIFO accounting adjustments. The primary ~~driver~~drivers for the ~~lower~~higher gross profit ~~was~~were (1) the ~~unfavorable~~ impact of a $3 million LIFO accounting credit reflecting the reversal in Corporate and Other of certain inventory markdowns taken in the ~~Second Quarter of Fiscal 2019 compared to~~operating groups during the ~~Second Quarter of Fiscal 2018.~~quarter, with no significant LIFO accounting adjustment in the prior year and (2) the gross profit associated with the increased net sales in Corporate and Other. The LIFO accounting impact in Corporate and Other in each period primarily reflects (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 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 ~~the inventory~~ has not been sold as of period end.

SG&A


	Second Quarter										First Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change		Fiscal 2020			Fiscal 2019			$ Change		% Change
SG&A	$	143,403		$	146,340		$	(2,937)	(2.0)	%	$	123,001		$	139,814		$	(16,813)	(12.0)	%
SG&A (as a % of net sales)		47.5	%		48.4	%						76.7	%		49.6	%
Amortization of Tommy Bahama Canada intangible assets	$	—		$	378
Notable items included in amounts above:
Amortization of Lilly Pulitzer Signature Store intangible assets	$	80		$	93						$	68		$	80
Amortization of Southern Tide intangible assets	$	73		$	72						$	72		$	72
Tommy Bahama Japan restructuring SG&A charges	$	590		$	3,206

The lower SG&A in the ~~Second~~First Quarter of Fiscal ~~2019~~2020 was primarily due to (1) decreased employment costs of $8 million primarily reflecting the actions taken to reduce our employment cost in response to COVID-19 including the furlough of substantially all retail and restaurant employees, in addition to layoffs or pay reductions for certain employees, (2) a reduction of $3 million in certain variable expenses, including merchant services fees on credit card transactions, commissions, royalties, shipping fees and supplies, (3) a reduction ~~in incentive compensation amounts, (2) a~~of $3 million in bonus expense reflecting the discontinuation of our bonus plans for Fiscal 2020, (4) a reduction of $2 million in ~~restructuring charges related to~~occupancy expenses primarily resulting from the operation of fewer Tommy Bahama ~~Japan operations~~ and ~~(3)~~Lilly Pulitzer brick and mortar locations as well as other negotiated reductions in occupancy expense as a ~~$2 million reduction~~result of COVID-19, and (5) other SG&A reductions in ~~advertising expense.~~travel, administrative and general expenses. These decreases were partially offset by ~~(1) increases~~a $2 million increase in ~~SG&A~~the estimated provision for credit losses resulting from the consideration of exposure for our trade receivables amounts.

Impairment of goodwill and intangible assets

In the First Quarter of Fiscal 2020, impairment charges for goodwill and intangible assets totaling $60 million were recognized primarily in Southern Tide. The impairment charges for Southern Tide primarily reflect the impact of COVID-19 on the operations, plans and strategy of the Southern Tide business. In addition, a small impairment charge was recognized in Lanier Apparel related to ~~support~~a trademark acquired in a prior year that was not deemed recoverable. Refer to Note 1 and Note 4 in the ~~businesses, including increased salaries and wages, occupancy and other operating expenses~~unaudited condensed consolidated financial statements included in ~~our ongoing direct to consumer and wholesale operations and (2) $1 million~~this report for additional discussion regarding the impairment charges recognized in the First Quarter of ~~incremental SG&A associated with~~Fiscal 2020. There were no impairment charges for goodwill or intangible assets in the ~~operation~~prior year period.

Table of ~~additional direct to consumer locations.~~Contents

Royalties and other operating income


	Second Quarter								First Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change		Fiscal 2020		Fiscal 2019		$ Change		% Change
Royalties and other operating income	$	3,837	$	3,556	$	281	7.9	%	$	3,890	$	3,787	$	103	2.7	%

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 ~~Second~~First Quarter of Fiscal ~~2019~~2020 reflects increased royalty income in ~~both~~ Tommy Bahama ~~and~~partially offset by lower royalty income in Lilly Pulitzer.

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Operating income (loss)


	Second Quarter								First Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change		Fiscal 2020		Fiscal 2019		$ Change		% Change
Tommy Bahama	$	23,218	$	20,621	$	2,597	12.6	%	$	(23,362)	$	15,192	$	(38,554)	NM	%
Lilly Pulitzer		20,449		18,421		2,028	11.0	%		4,146		15,252		(11,106)	(72.8)	%
Lanier Apparel		253		825		(572)	(69.3)	%		(2,637)		1,367		(4,004)	NM	%
Southern Tide		1,834		1,420		414	29.2	%		(63,366)		2,517		(65,883)	NM	%
Corporate and Other		(5,495)		(4,774)		(721)	(15.1)	%		(270)		(4,586)		4,316	94.1	%
Total Operating Income	$	40,259	$	36,513	$	3,746	10.3	%
Consolidated Operating (Loss) Income									$	(85,489)	$	29,742	$	(115,231)	NM	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	705	$	(122)					$	(3,254)	$	141
Tommy Bahama Japan inventory markdown charges	$	—	$	461
Amortization of Tommy Bahama Canada intangible assets	$	—	$	378
Amortization of Lilly Pulitzer Signature Store intangible assets	$	80	$	93					$	68	$	80
Lanier Apparel impairment charge									$	207	$	—
Amortization of Southern Tide intangible assets	$	73	$	72					$	72	$	72
Tommy Bahama Japan restructuring SG&A charges	$	590	$	3,206

Southern Tide impairment charge									$	60,245	$	—

The ~~increase in~~lower operating ~~income~~results in the ~~Second~~First Quarter of Fiscal ~~2019 was~~2020 were primarily due to the Southern Tide impairment charges and the lower ~~SG&A and an improved gross margin,~~net sales resulting from the impact of COVID-19 on each ~~as discussed above. On an~~ operating group ~~basis, the increase~~partially offset by lower SG&A. The decrease in operating income reflects ~~increased~~lower operating ~~income~~results in ~~Tommy Bahama, Lilly Pulitzer and Southern Tide,~~each operating group partially offset by ~~lower~~improved operating ~~income in Lanier Apparel and a larger operating loss~~results in Corporate and Other. Changes in operating income (loss) by operating group are discussed below.

Tommy Bahama:


	Second Quarter										First Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change		Fiscal 2020			Fiscal 2019			$ Change		% Change
Net sales	$	188,870		$	192,728		$	(3,858)	(2.0)	%	$	86,984		$	164,730		$	(77,746)	(47.2)	%
Gross profit	$	114,526		$	115,954		$	(1,428)	(1.2)	%	$	51,680		$	103,507		$	(51,827)	(50.1)	%
Gross margin		60.6	%		60.2	%						59.4	%		62.8	%
Operating income	$	23,218		$	20,621		$	2,597	12.6	%
Operating income as % of net sales		12.3	%		10.7	%
Tommy Bahama Japan inventory markdown charges	$	—		$	461
Amortization of Tommy Bahama Canada intangible assets	$	—	��	$	378
Tommy Bahama Japan restructuring SG&A charges	$	590		$	3,206

Operating (loss) income											$	(23,362)		$	15,192		$	(38,554)	NM	%
Operating (loss) income as % of net sales												(26.9)	%		9.2	%

The ~~increase in~~lower operating ~~income~~results for Tommy Bahama ~~was~~in the First Quarter of Fiscal 2020 were primarily due to lower ~~SG&A~~sales and ~~improved~~lower gross margin partially offset by lower ~~net sales.~~SG&A. The lower SG&A ~~for the Second Quarter of Fiscal 2019 reflects (1) a $3 million reduction in restructuring charges related~~was primarily due to ~~the Tommy Bahama Japan operations, (2) a $2 million reduction in incentive compensation amounts,~~lower employment costs; lower variable costs such as merchant services fees on credit card transactions, commissions, shipping fees and ~~(3) $2 million of~~supplies; lower ~~advertising expense.~~travel, administrative and general expenses; and lower occupancy costs. These decreases were partially offset by increased ~~salaries and wages, occupancy and other operating expenses in our ongoing operations.~~provisions for credit losses.

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Lilly Pulitzer:


	Second Quarter										First Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change		Fiscal 2020			Fiscal 2019			$ Change		% Change
Net sales	$	75,555		$	71,623		$	3,932	5.5	%	$	49,149		$	72,595		$	(23,446)	(32.3)	%
Gross profit	$	51,817		$	49,082		$	2,735	5.6	%	$	31,699		$	45,481		$	(13,782)	(30.3)	%
Gross margin		68.6	%		68.5	%						64.5	%		62.7	%
Operating income	$	20,449		$	18,421		$	2,028	11.0	%
Operating income as % of net sales		27.1	%		25.7	%
Operating (loss) income											$	4,146		$	15,252		$	(11,106)	(72.8)	%
Operating (loss) income as % of net sales												8.4	%		21.0	%
Notable items included in amounts above:
Amortization of Lilly Pulitzer Signature Store intangible assets	$	80		$	93						$	68		$	80

The ~~increase in~~lower operating income infor Lilly Pulitzer in the First Quarter of Fiscal 2020 was primarily due to ~~higher net~~lower sales partially offset by higher gross margin and lower SG&A. The ~~higher~~lower SG&A ~~for the Second Quarter of Fiscal 2019 included (1) $1 million of incremental SG&A associated with the cost of operating additional retail stores,~~was primarily due to lower employment costs; lower variable costs such as merchant services fees on credit card transactions and ~~(2) SG&A increases to support the planned growth of the business, including additional employment~~supplies; lower travel, administrative and general expenses; and lower occupancy costs. These ~~increases in SG&A~~decreases were partially offset by ~~a reduction in advertising~~increased provisions for credit losses and marketing expense.

Lanier Apparel:


	Second Quarter										First Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change		Fiscal 2020			Fiscal 2019			$ Change		% Change
Net sales	$	20,905		$	23,860		$	(2,955)	(12.4)	%	$	10,725		$	26,154		$	(15,429)	(59.0)	%
Gross profit	$	6,025		$	6,345		$	(320)	(5.0)	%	$	2,847		$	7,225		$	(4,378)	(60.6)	%
Gross margin		28.8	%		26.6	%						26.5	%		27.6	%
Operating income	$	253		$	825		$	(572)	(69.3)	%
Operating income as % of net sales		1.2	%		3.5	%
Operating (loss) income											$	(2,637)		$	1,367		$	(4,004)	NM	%
Operating (loss) income as % of net sales												(24.6)	%		5.2	%
Notable items included in amounts above:
Lanier Apparel impairment charge											$	207		$	—

The ~~decrease in~~lower operating ~~income~~results for Lanier Apparel in the First Quarter of Fiscal 2020 were primarily due to lower sales and lower gross margin partially offset by lower SG&A. The lower SG&A was primarily due to lower ~~net sales~~variable expenses including royalties, commissions and ~~higher SG&A,~~advertising and employment costs which were partially offset by ~~the higher gross margin. The higher SG&A~~increased provisions for ~~the Second Quarter~~credit losses and an impairment charge of ~~Fiscal 2019 was primarily due to increased advertising and sales-related variable expenses.~~intangible assets.

Southern Tide:


	Second Quarter										First Quarter
	Fiscal 2019			Fiscal 2018			$ Change		% Change		Fiscal 2020			Fiscal 2019			$ Change		% Change
Net sales	$	12,468		$	11,777		$	691	5.9	%	$	8,301		$	14,134		$	(5,833)	(41.3)	%
Gross profit	$	6,141		$	6,095		$	46	0.8	%	$	1,539		$	7,152		$	(5,613)	(78.5)	%
Gross margin		49.3	%		51.8	%						18.5	%		50.6	%
Operating income	$	1,834		$	1,420		$	414	29.2	%
Operating income as % of net sales		14.7	%		12.1	%
Operating (loss) income											$	(63,366)		$	2,517		$	(65,883)	NM	%
Operating (loss) income as % of net sales												(763.4)	%		17.8	%
Notable items included in amounts above:
Amortization of Southern Tide intangible assets	$	73		$	72						$	72		$	72
Southern Tide impairment charge											$	60,245		$	—

The ~~increase in~~lower operating ~~income~~results for Southern Tide ~~was~~in the First Quarter of Fiscal 2020 were primarily due to ~~higher~~the significant impairment charge for goodwill and intangible assets as well as lower sales and ~~lower~~gross margin with comparable SG&A. Lower SG&A ~~partially~~for employment costs, advertising and other variable expenses were offset by ~~lower gross margin. The lower SG&A in the Second Quarter of Fiscal 2019 was primarily due to decreased incentive compensation amounts and other expense reductions.~~increased provisions for credit losses.

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Corporate and Other:


	Second Quarter								First Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change		Fiscal 2020		Fiscal 2019		$ Change		% Change
Net sales	$	4,202	$	2,653	$	1,549	58.4	%	$	5,184	$	4,360	$	824	18.9	%
Gross profit	$	1,316	$	1,821	$	(505)	(27.7)	%	$	6,309	$	2,404	$	3,905	162.4	%
Operating loss	$	(5,495)	$	(4,774)	$	(721)	(15.1)	%	$	(270)	$	(4,586)	$	4,316	94.1	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	705	$	(122)					$	(3,254)	$	141

The ~~larger~~smaller operating loss infor Corporate and Other was primarily due to the ~~unfavorable~~favorable impact of LIFO ~~accounting.~~accounting, higher net sales and lower SG&A, which was primarily due to lower employment costs in Corporate and Other.

Interest expense, net


	Second Quarter								First Quarter
	Fiscal 2019		Fiscal 2018		$ Change		% Change		Fiscal 2020		Fiscal 2019		$ Change		% Change
Interest expense, net	$	419	$	602	$	(183)	(30.4)	%	$	658	$	671	$	(13)	(1.9)	%

Interest expense ~~decreased~~was comparable. In the First Quarter of Fiscal 2020 interest expense reflects the net impact of interest expense on debt outstanding partially offset by interest income of cash invested in money market accounts, while in the ~~Second~~First Quarter of Fiscal 2019, ~~primarily due~~we did not have any cash invested in money market accounts.

Income tax (benefit) provision


	First Quarter
	Fiscal 2020			Fiscal 2019			$ Change		% Change
Income tax (benefit) provision	$	(19,363)		$	7,414		$	(26,777)	NM	%
Effective tax rate		22.5	%		25.5	%

Income taxes were a tax benefit in the First Quarter of Fiscal 2020 resulting from an operating loss and the impact of certain discrete and other items as noted below, as compared to ~~lower average debt outstanding during~~a tax expense in the ~~Second~~First Quarter of Fiscal 2019 resulting from operating income. The income tax benefit in the First Quarter of Fiscal 2020 reflects the income tax benefit on the operating losses at 21% decreased by certain unfavorable items including (1) the non-deductibility of certain impairment charges, resulting in an estimated effective income tax benefit rate of approximately 17% on the impairment charges, and (2) restricted stock which vested in the period with a vesting date price lower than the grant date price. These unfavorable items in the First Quarter of Fiscal 2020 were partially offset by ~~higher interest rates and higher unused line fees.~~

~~Income taxes~~

Second Quarter


Fiscal 2019

Fiscal 2018

$ Change

% Change

Income taxes

$
10,004

$
8,727

$
1,277

14.6
%
Effective tax rate

25.1
%

24.3
%

~~The higher effective~~the favorable impact of the CARES Act providing for additional income tax benefit for the carry back of the substantial majority of our Fiscal 2020 net operating losses to years prior to U.S. Tax Reform, which had a federal income tax rate ~~was primarily due to~~of 35% rather than the ~~Second Quarter~~federal income tax rate in Fiscal 2020 of ~~Fiscal 2018 including the impact of more significant favorable discrete items.~~21%.

Net earnings


	Second Quarter				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Net sales	$	302,000	$	302,641	$	160,343	$	281,973
Operating income	$	40,259	$	36,513
Net earnings	$	29,836	$	27,184
Net earnings per diluted share	$	1.76	$	1.61
Operating (loss) income					$	(85,489)	$	29,742
Net (loss) earnings					$	(66,784)	$	21,657
Net (loss) earnings per diluted share					$	(4.02)	$	1.29
Weighted average shares outstanding - diluted		16,907		16,840		16,612		16,848

The ~~higher~~lower net earnings per diluted share in the ~~Second~~First Quarter of Fiscal ~~2019~~2020 was primarily due to ~~higher operating income~~(1) the $60 million of impairment charges for goodwill and intangible assets in ~~Tommy Bahama, Lilly Pulitzer and~~ Southern Tide, ~~and~~(2) the lower ~~interest expense. These improved~~ operating results in each operating group and (3) a lower effective tax rate in the First Quarter of Fiscal 2020. These items were partially offset by ~~lower operating income in Lanier Apparel, a larger operating loss in Corporate and Other and the impact of a higher effective tax rate.~~

~~FIRST HALF OF FISCAL 2019 COMPARED TO FIRST HALF OF FISCAL 2018~~

The discussion and tables below compare our statements of operations for the First Half of Fiscal 2019 to the First Half of Fiscal 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.

~~Table of Contents~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Net sales

$
583,973

100.0
%

$
575,269

100.0
%

$
8,704

1.5
%
Cost of goods sold

238,379

40.8
%

231,826

40.3
%

6,553

2.8
%
Gross profit

$
345,594

59.2
%

$
343,443

59.7
%

$
2,151

0.6
%
SG&A

283,217

48.5
%

286,060

49.7
%

(2,843)

(1.0)
%
Royalties and other operating income

7,624

1.3
%

7,503

1.3
%

121

1.6
%
Operating income

$
70,001

12.0
%

$
64,886

11.3
%

$
5,115

7.9
%
Interest expense, net

1,090

0.2
%

1,383

0.2
%

(293)

(21.2)
%
Earnings before income taxes

$
68,911

11.8
%

$
63,503

11.0
%

$
5,408

8.5
%
Income taxes

17,418

3.0
%

15,752

2.7
%

1,666

10.6
%
Net earnings

$
51,493

8.8
%

$
47,751

8.3
%

$
3,742

7.8
%

~~Net Sales~~

First Half

Fiscal 2019

Fiscal 2018

$ Change

% Change

Tommy Bahama

$
353,600

$
359,860

$
(6,260)

(1.7)
%
Lilly Pulitzer

148,150

140,250

7,900

5.6
%
Lanier Apparel

47,494

43,769

3,725

8.5
%
Southern Tide

26,602

25,249

1,353

5.4
%
Corporate and Other

8,127

6,141

1,986

32.3
%
Total net sales

$
583,973

$
575,269

$
8,704

1.5
%

Consolidated net sales increased $9 million, or 2%, in the First Half of Fiscal 2019. The increase in consolidated net sales was primarily driven by (1) a $7 million, or 3%, comparable sales increase to $296 million in the First Half of Fiscal 2019 from $289 million in the First Half of Fiscal 2018, with comparable sales increases in both Tommy Bahama and Lilly Pulitzer, (2) an incremental net sales increase of $4 million associated with non-comp retail store operations, resulting from an increase at Lilly Pulitzer, and (3) a $2 million increase in wholesale sales reflecting increases in Lilly Pulitzer, Lanier Apparel and Southern Tide. These increases in net sales were partially offset by (1) a $3 million decrease in restaurant sales in Tommy Bahama and (2) a $2 million decrease in outlet store sales in Tommy Bahama. 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 Half



Fiscal 2019

Fiscal 2018

Retail

41
%
42
%
E-commerce

20
%
19
%
Restaurant

8
%
8
%
Wholesale

31
%
31
%
Total

100
%
100
%

~~Tommy Bahama:~~

The Tommy Bahama net sales decrease of $6 million, or 2%, in the First Half of Fiscal 2019 reflects (1) a $5 million decrease in wholesale sales reflecting decreases in both full-price and off-price wholesale sales, (2) a $3 million decrease in restaurant sales primarily due to the net impact of certain 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 $4 million, or 2%, increase in comparable sales to $193 million in the First Half of Fiscal 2019

Table of Contents

~~from $189 million~~the improved operating results in ~~the First Half of Fiscal 2018. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:~~

First Half


Fiscal 2019

Fiscal 2018

Retail

49
%
49
%
E-commerce

19
%
18
%
Restaurant

13
%
13
%
Wholesale

19
%
20
%
Total

100
%
100
%

~~Lilly Pulitzer:~~

The Lilly Pulitzer net sales increase of $8 million, or 6%, in the First Half of Fiscal 2019 was primarily the result of (1) an incremental net sales increase of $5 million associated with non-comp retail store operations including the operation of additional retail stores and increased gift card breakage income, (2) a $3 million increase in wholesale sales reflecting increases in both full-price and off-price wholesale sales and (3) a $1 million, or 1%, increase in comparable sales to $93 million in the First Half of Fiscal 2019 from $92 million the First Half of Fiscal 2018. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

First Half


Fiscal 2019

Fiscal 2018

Retail

46
%
48
%
E-commerce

27
%
26
%
Wholesale

27
%
26
%
Total

100
%
100
%

~~Lanier Apparel:~~

The Lanier Apparel net sales increase of $4 million, or 9%, in the First Half of Fiscal 2019 was primarily due to increased volume in various seasonal, in-stock and replenishment programs, including initial shipments for certain programs in the First Half of Fiscal 2019. These increases were partially offset by decreased sales in other programs, including lower volume for programs resulting from the exit of certain programs and customers, including programs with customers who filed for bankruptcy in Fiscal 2018 and certain programs that had initial shipments in the First Half of Fiscal 2018. While the Cole Haan and Duck Head businesses both had significant sales growth rates in the First Half of Fiscal 2019, those business still represent a small proportion of Lanier Apparel’s net sales. We expect the net sales at Lanier Apparel for the remainder of Fiscal 2019 to grow at a more modest rate than the sales growth rate achieved for the First Half of Fiscal 2019.

~~Southern Tide:~~

The Southern Tide net sales increase of $1 million, or 5%, in the First Half of Fiscal 2019 was due to increased sales in both the wholesale and e-commerce channels of distribution, with e-commerce growing at a faster pace than wholesale sales. The increased wholesale sales reflect increased sales to department stores and Signature Stores, including those that opened in Fiscal 2018. The following table presents the proportion of net sales by distribution channel for Southern Tide for each period presented:

First Half


Fiscal 2019

Fiscal 2018

E-commerce

17
%
16
%
Wholesale

83
%
84
%
Total

100
%
100
%

~~Table of Contents~~

~~Corporate and Other:~~

Corporate and Other, ~~net sales primarily consist of the net sales of TBBC and our Lyons, Georgia distribution center operations. The increase in net sales was primarily due to sales growth in TBBC.~~

~~Gross Profit~~

The tables below present gross profit by operating group and in total for the First Half of Fiscal 2019 and the First Half of Fiscal 2018, as well as the change between those two periods and gross margin by operating group and in total for those periods. Our gross profit and gross margin, which ~~is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company.~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Tommy Bahama

$
218,033

$
220,244

$
(2,211)

(1.0)
%
Lilly Pulitzer

97,298

94,587

2,711

2.9
%
Lanier Apparel

13,427

12,313

1,114

9.0
%
Southern Tide

13,293

12,832

461

3.6
%
Corporate and Other

3,543

3,467

76

2.2
%
Total gross profit

$
345,594

$
343,443

$
2,151

0.6
%
LIFO adjustments in Corporate and Other

$
845

$
166





Tommy Bahama Japan inventory markdown charges

$
—

$
461

Inventory step-up charges in Corporate and Other

$
—

$
157

First Half


Fiscal 2019

Fiscal 2018

Tommy Bahama

61.7
%
61.2
%
Lilly Pulitzer

65.7
%
67.4
%
Lanier Apparel

28.3
%
28.1
%
Southern Tide

50.0
%
50.8
%
Corporate and Other

NM

NM

Consolidated gross margin

59.2
%
59.7
%

The increase in consolidated gross profit in the First Half of Fiscal 2019 was primarily due to increased sales partially offset by lower gross margin. The lower consolidated gross margin was primarily due to lower gross margins 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 increase in gross margin for Tommy Bahama was primarily due to (1) a change in sales mix with retail store and e-commerce sales representing a greater proportion of net sales and wholesale and outlet store sales representing a lower proportion of net sales and (2) the First Half of Fiscal 2018 including certain Tommy Bahama Japan inventory markdown charges with no such charges in the First Half of Fiscal 2019.

~~Lilly Pulitzer:~~

The decrease in gross margin for Lilly Pulitzer reflects (1) a greater proportion of wholesale sales, including increased off-price sales, which had lower gross margins in the First Half of Fiscal 2019, and (2) higher costs associated with gift with purchase and other promotion events. These unfavorable items were ~~partially offset by the impact of higher gift card breakage income.~~

~~Table of Contents~~

~~Lanier Apparel:~~

The increase in gross margin for Lanier Apparel was primarily due to a change in sales mix as a greater proportion of sales in the First Half of Fiscal 2019 were related to higher gross margin programs, due in part to the First Half of Fiscal 2018 including more sales related to a warehouse club program.

~~Southern Tide:~~

~~The decrease in gross margin for Southern Tide was~~ primarily due to the ~~prior year including an insurance recovery on certain inventory partially offset by a change in sales mix as e-commerce sales represented a greater proportion of 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~~favorable impact of LIFO accounting adjustments. The increased gross profit primarily reflects the impact of higher sales in TBBC partially offset by the unfavorable impact of LIFO accounting in the First Half of Fiscal 2019 compared to the First Half of Fiscal 2018. The LIFO accounting impact in Corporate and Other in each period primarily reflects (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 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 the inventory has not been sold as of period end.accounting.

~~SG&A~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

SG&A

$
283,217

$
286,060

$
(2,843)

(1.0)
%
SG&A (as a % of net sales)

48.5
%

49.7
%





Amortization of Tommy Bahama Canada intangible assets

$
—

$
763

Amortization of Lilly Pulitzer Signature Store intangible assets

$
160

$
188

Amortization of Southern Tide intangible assets

$
145

$
144

Tommy Bahama Japan restructuring SG&A charges

$
590

$
3,206

The decrease in SG&A in the First Half of Fiscal 2019 was primarily due to (1) a $5 million decrease in advertising expense, (2) a $3 million reduction in restructuring charges related to the Tommy Bahama Japan operations and (3) a $3 million reduction in incentive compensation expense. These decreases were partially offset by (1) increases in SG&A to support the businesses, including increased salaries and wages, occupancy and other operating expenses in our ongoing direct to consumer and wholesale operations and (2) $1 million of incremental SG&A associated with the cost of operating additional retail stores and restaurants.

~~Royalties and other operating income~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Royalties and other operating income

$
7,624

$
7,503

$
121

1.6
%

Royalties and other operating income primarily reflects income received from third parties from the licensing of our brands. The increase in royalties and other income in the First Half of Fiscal 2019 reflects increased royalty income in both Tommy Bahama and Lilly Pulitzer.

~~Table of Contents~~

~~Operating income (loss)~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Tommy Bahama

$
38,410

$
34,924

$
3,486

10.0
%
Lilly Pulitzer

35,701

34,247

1,454

4.2
%
Lanier Apparel

1,435

1,187

248

20.9
%
Southern Tide

4,351

3,907

444

11.4
%
Corporate and Other

(9,896)

(9,379)

(517)

(5.5)
%
Total Operating Income

$
70,001

$
64,886

$
5,115

7.9
%
LIFO adjustments in Corporate and Other

$
845

$
166





Tommy Bahama Japan inventory markdown charges

$
—

$
461

Inventory step-up charges in Corporate and Other

$
—

$
157

Amortization of Tommy Bahama Canada intangible assets

$
—

$
763

Amortization of Lilly Pulitzer Signature Store intangible assets

$
160

$
188

Amortization of Southern Tide intangible assets

$
145

$
144

Tommy Bahama Japan restructuring SG&A charges

$
590

$
3,206

The increase in operating income in the First Half of Fiscal 2019 was primarily due to higher sales and lower SG&A partially offset by lower gross margin. On an operating group basis, the increase in operating income reflects increased operating income in each operating group and a larger operating loss in Corporate and Other. Changes in operating income (loss) by operating group are discussed below.

~~Tommy Bahama:~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Net sales

$
353,600

$
359,860

$
(6,260)

(1.7)
%
Gross profit

$
218,033

$
220,244

$
(2,211)

(1.0)
%
Gross margin

61.7
%

61.2
%





Operating income

$
38,410

$
34,924

$
3,486

10.0
%
Operating income as % of net sales

10.9
%

9.7
%





Tommy Bahama Japan inventory markdown charges

$
—

$
461

Amortization of Tommy Bahama Canada intangible assets

$
—

$
763





Tommy Bahama Japan restructuring SG&A charges

$
590

$
3,206

The increase in operating income in Tommy Bahama was primarily due to lower SG&A and higher gross margin, partially offset by lower net sales. The lower SG&A for the First Half of Fiscal 2019 reflects (1) a $4 million decrease in advertising expense, (2) a $3 million reduction in restructuring charges related to the Tommy Bahama Japan operations, and (3) a $2 million reduction in incentive compensation. These decreases were partially offset by increased salaries and wages, occupancy and other operating expenses in our ongoing operations.

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~~Lilly Pulitzer:~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Net sales

$
148,150

$
140,250

$
7,900

5.6
%
Gross profit

$
97,298

$
94,587

$
2,711

2.9
%
Gross margin

65.7
%

67.4
%



Operating income

$
35,701

$
34,247

$
1,454

4.2
%
Operating income as % of net sales

24.1
%

24.4
%





Amortization of Lilly Pulitzer Signature Store intangible assets

$
160

$
188

The increase in operating income in Lilly Pulitzer was primarily due to increased sales partially offset by lower gross margin and higher SG&A. The higher SG&A in the First Half of Fiscal 2019 included (1) $2 million of incremental SG&A associated with the cost of operating additional retail stores and (2) SG&A increases to support the planned growth of the business, including additional employment costs. These increases in SG&A were partially offset by a $1 million reduction in advertising expense.

~~Lanier Apparel:~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Net sales

$
47,494

$
43,769

$
3,725

8.5
%
Gross profit

$
13,427

$
12,313

$
1,114

9.0
%
Gross margin

28.3
%

28.1
%





Operating income

$
1,435

$
1,187

$
248

20.9
%
Operating income as % of net sales

3.0
%

2.7
%

The increase in operating income in Lanier Apparel was primarily due to higher sales partially offset by higher SG&A. The SG&A increase in the First Half of Fiscal 2019 was primarily due to higher sales-related variable expenses as well as increased advertising expense.

~~Southern Tide:~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Net sales

$
26,602

$
25,249

$
1,353

5.4
%
Gross profit

$
13,293

$
12,832

$
461

3.6
%
Gross margin

50.0
%

50.8
%



Operating income

$
4,351

$
3,907

$
444

11.4
%
Operating income as % of net sales

16.4
%

15.5
%





Amortization of Southern Tide intangible assets

$
145

$
144

The increase in operating income in Southern Tide was primarily due to higher sales partially offset by lower gross margin. SG&A was comparable between periods as increased advertising expense, variable expenses associated with the higher sales and other costs to support future growth of the business were offset by lower incentive compensation amounts.

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~~Corporate and Other:~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Net sales

$
8,127

$
6,141

$
1,986

32.3
%
Gross profit

$
3,543

$
3,467

$
76

2.2
%
Operating loss

$
(9,896)

$
(9,379)

$
(517)

(5.5)
%
LIFO adjustments in Corporate and Other

$
845

$
166



Inventory step-up charges in Corporate and Other

$
—

$
157

~~The larger operating loss in 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 Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Interest expense, net

$
1,090

$
1,383

$
(293)

(21.2)
%

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

~~Income taxes~~

First Half



Fiscal 2019

Fiscal 2018

$ Change

% Change

Income taxes

$
17,418

$
15,752

$
1,666

10.6
%
Effective tax rate

25.3
%

24.8
%

Both periods include the favorable benefit of certain stock awards that vested during the period and the First Half of Fiscal 2018 also includes certain other favorable discrete items. Our effective tax rate for Fiscal 2019 is expected to be approximately 26%.

~~Net earnings~~

First Half


Fiscal 2019

Fiscal 2018
Net sales

$
583,973

$
575,269
Operating income

$
70,001

$
64,886
Net earnings

$
51,493

$
47,751
Net earnings per diluted share

$
3.05

$
2.84
Weighted average shares outstanding - diluted

16,878

16,804

The higher net earnings per diluted share in the First Half of Fiscal 2019 was primarily due to higher operating income in each operating group and lower interest expense. These items were partially offset by a larger operating loss in Corporate and Other and a higher effective tax rate.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Our primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of branded apparel products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer and Southern Tide lifestyle brands, other owned and licensed brands, and private label apparel products. We distribute our products to our customers via direct to consumer and wholesale channels of distribution. 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

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costs, distribution costs, other general and administrative expenses and the payment of periodic interest and other payments related to our financing arrangements.

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 ~~August 3, 2019,~~May 2, 2020, we had ~~$31~~$182 million of cash and cash equivalents on ~~hand, no~~hand. Additionally, we had $208 million of borrowings outstanding and ~~$311~~$114 million of availability under our U.S. Revolving Credit Agreement. ~~Generally, we anticipate that excess~~We believe our cash ~~if any, will be used to repay any debt outstanding on~~and cash equivalents and our U.S. Revolving Credit ~~Agreement. We believe our balance sheet~~Agreement will provide sufficient liquidity to fund operating cash flow needs and ~~anticipated future~~other ongoing cash requirements during the COVID-19 pandemic in Fiscal 2020 until we return to generating 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, direct to consumer initiatives and other strategic initiatives.operations.

Key Liquidity Measures


	August 3,			February 2,			August 4,			February 3,			May 2,			February 1,			May 4,			February 2,
($ in thousands)	2019			2019			2018			2018			2020			2020			2019			2019
Total current assets	$	265,044		$	269,788		$	230,095		$	236,118		$	423,692		$	288,826		$	273,167		$	269,788
Total current liabilities	$	164,119		$	142,209		$	110,921		$	135,010		$	153,127		$	177,779		$	166,301		$	142,209
Working capital	$	100,925		$	127,579		$	119,174		$	101,108		$	270,565		$	111,047		$	106,866		$	127,579
Working capital ratio		1.61			1.90			2.07			1.75			2.77			1.62			1.64			1.90
Debt to total capital ratio		—	%		3	%		5	%		10	%		32	%		—	%		6	%		3	%

Our working capital ratio is calculated by dividing total current assets by total current liabilities. Current assets as of May 2, 2020, increased from ~~August~~May 4, ~~2018 to August 3,~~ 2019 primarily due to increased cash balances as well as higher inventories, ~~and increased cash~~which were partially offset by lower ~~receivables and lower prepaid expenses.~~receivables. Current liabilities ~~increased primarily~~as of May 2, 2020 decreased from May 4, 2019 due to ~~the impact of the revised lease accounting guidance which required the recognition of $54 million of~~lower accounts payable, accrued compensation and other accrued expenses and liabilities accounts partially offset by increased current operating lease liabilities at August 3, 2019, as discussed in Note 5 to the unaudited condensed consolidated financial statements included in this report. Changes in current assets and current liabilities are discussed below.liabilities.

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’ equity. Debt was $0$208 million at ~~August 3, 2019~~May 2, 2020 and ~~$25~~$33 million at ~~August~~May 4, ~~2018,~~2019, while shareholders’ equity was ~~$519~~$439 million at ~~August 3, 2019~~May 2, 2020 and ~~$467~~$493 million at ~~August~~May 4, ~~2018.~~2019. The ~~decrease~~increase in debt since ~~August~~May 4, ~~2018~~2019 was primarily due to ~~$106 million~~borrowing to maintain certain amounts of cash ~~flow from operations which was partially offset by cash payments of $31 million for capital expenditures and $24 million for dividends,~~on our balance sheet during the COVID-19 pandemic resulting in ~~$31~~$182 million of cash and cash equivalents on hand as of ~~August 3, 2019.~~May 2, 2020. Additionally, the change in debt reflects the net impact of $82 million of cash flow from operations partially offset by cash payments of $38 million for capital expenditures, $23 million for dividends and $20 million for share repurchases. Shareholders’ equity ~~increased~~decreased from ~~August~~May 4, ~~2018,~~2019, primarily ~~as a result of~~due to net ~~earnings less~~losses, dividends ~~paid.~~paid and shares repurchased. Our debt levels

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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, the ultimate impact of the COVID-19 pandemic 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 August~~as of May 2, 2020 as compared to May 4, ~~2018 to August 3,~~ 2019.

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Current Assets:


	August 3,		February 2,		August 4,		February 3,		May 2,		February 1,		May 4,		February 2,
	2019		2019		2018		2018		2020		2020		2019		2019
Cash and cash equivalents	$	30,756	$	8,327	$	7,054	$	6,343	$	181,775	$	52,460	$	5,501	$	8,327
Receivables, net		59,176		69,037		69,724		67,542		51,055		58,724		85,857		69,037
Inventories, net		152,672		160,656		123,924		126,812		169,495		152,229		157,221		160,656
Prepaid expenses and other current assets		22,440		31,768		29,393		35,421		21,367		25,413		24,588		31,768
Total current assets	$	265,044	$	269,788	$	230,095	$	236,118	$	423,692	$	288,826	$	273,167	$	269,788

Cash and cash equivalents were ~~$31~~$182 million as of ~~August 3, 2019~~May 2, 2020 compared to $7$6 million as of ~~August~~May 4, ~~2018. Typical cash~~2019. Cash amounts maintained on an ongoing basis in our operations generally range from $5 million to $10 million at any given time if we have debt ~~outstanding.~~outstanding; however, due to the uncertainty associated with the COVID-19 pandemic, we borrowed a significant amount of cash during the First Quarter of Fiscal 2020 as a precautionary measure. Any ~~excess~~ cash that is ~~generally~~not used to repay ~~any~~ amounts outstanding under our U.S. Revolving Credit 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.~~

is generally invested in money market investment accounts. The decrease in receivables, net as of ~~August 3, 2019~~May 2, 2020 was primarily due to lower trade receivables resulting from lower wholesale sales induring the ~~Second Quarter of Fiscal 2019 resulting in~~quarter, lower ~~trade accounts~~credit card receivables due to lower direct to consumer sales and a ~~$5 million reduction in income tax receivables reflecting the collection~~higher provision for credit losses as of ~~certain income tax receivable amounts.~~May 2, 2020.

Inventories, net, which is net of a $62 million LIFO reserve in both periods, increased as of ~~August 3, 2019 due to increases in inventories in each operating group to support planned sales growth and to increase base~~May 2, 2020 as inventory ~~levels in certain programs and product categories. The higher inventory levels reflect (1)~~ increased ~~inventory levels~~ in Tommy Bahama ~~including increases in certain core product categories~~and Lilly Pulitzer, primarily due to the lower net sales in the ~~direct to consumer operations, and (2) increased inventory~~First Quarter of Fiscal 2020, partially offset by a decrease in Lanier Apparel due to ~~less inventory than optimal~~a reduction in the ~~prior year~~number of weeks of inventory on hand for ~~certain~~Lanier Apparel replenishment and other programs. ~~We believe that inventory levels in each operating group are appropriate to support anticipated sales.~~

Prepaid expenses and other current assets decreased as of ~~August 3, 2019~~May 2, 2020 primarily ~~as a result of~~due to lower prepaid rent, expense due to the adoption of the revised lease accounting guidance, which resulted in the classification of prepaid rent in operating lease assets in our consolidated balance sheet, as well as lower prepaid advertising and other ~~prepaid amounts.~~operating expenses.

Non-current Assets:


	August 3,		February 2,		August 4,		February 3,		May 2,		February 1,		May 4,		February 2,
	2019		2019		2018		2018		2020		2020		2019		2019
Property and equipment, net	$	189,410	$	192,576	$	195,378	$	193,533	$	188,568	$	191,517	$	191,104	$	192,576
Intangible assets, net		175,591		176,176		177,418		178,858		157,015		175,005		175,883		176,176
Goodwill		66,585		66,621		66,581		66,703		23,802		66,578		66,597		66,621
Operating lease assets		288,928		—		—		—		274,778		287,181		294,131		—
Other non-current assets, net		24,636		22,093		23,918		24,729		29,615		24,262		23,543		22,093
Total non-current assets	$	745,150	$	457,466	$	463,295	$	463,823	$	673,778	$	744,543	$	751,258	$	457,466

Property and equipment, net as of ~~August 3, 2019~~May 2, 2020 decreased primarily as a result of depreciation expense during the ~~twelve~~12 months ended ~~August 3, 2019,~~May 2, 2020, partially offset by capital expenditures during the same period. The decrease in intangible assets, net and goodwill as of ~~August 3, 2019~~May 2, 2020 was primarily due to ~~amortization of intangible assets~~the impairment charges in Southern Tide in the ~~12 months ended August 3, 2019.~~First Quarter of Fiscal 2020, as discussed in Note 1 and Note 4. The operating lease assets ~~amount~~ as of ~~August 3, 2019 is a result~~May 2, 2020 decreased primarily due to the recognition of amortization related to existing operating leases exceeding operating lease assets associated with new operating lease agreements that commenced during the ~~adoption~~last 12 months. The increase in other non-current assets, net was primarily due to the First Quarter of ~~the revised lease accounting guidance during~~ Fiscal ~~2019.~~2020 including an $8 million income tax receivable associated with Fiscal 2020 net operating losses expected to be applied against prior year income tax returns.

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Liabilities:


	August 3,		February 2,		August 4,		February 3,		May 2,		February 1,		May 4,		February 2,
	2019		2019		2018		2018		2020		2020		2019		2019
Total current liabilities	$	164,119	$	142,209	$	110,921	$	135,010	$	153,127	$	177,779	$	166,301	$	142,209
Long-term debt		—		12,993		24,936		45,809		207,618		—		33,182		12,993
Non-current operating lease liabilities		290,133		—		—		—		271,810		291,886		295,399		—
Other non-current liabilities		17,077		75,286		74,649		74,029		17,101		18,566		16,707		75,286
Deferred taxes		19,916		18,411		15,752		15,269		9,119		16,540		19,664		18,411
Total liabilities	$	491,245	$	248,899	$	226,258	$	270,117	$	658,775	$	504,771	$	531,253	$	248,899

Current liabilities ~~increased~~decreased as of ~~August 3, 2019~~May 2, 2020 primarily due to ~~the $54 million of current~~lower accounts payable, accrued compensation and other accrued expenses and liabilities partially offset by increased operating lease liabilities ~~recognized~~ as significant prior period rents were withheld during the pendency of ~~August 3, 2019, as a result of the adoption of the revised lease accounting guidance during Fiscal 2019.~~discussions with real property landlords. The ~~decrease~~increase in long-term debt since ~~August~~May 4, ~~2018~~2019 was primarily due to ~~$106~~us borrowing certain amounts of cash to maintain on our balance sheet during the COVID-19 pandemic. Additionally, debt reflects the net impact of $82 million of cash flow from operations ~~which was~~ partially offset by cash payments of ~~$31~~$38 million for capital expenditures, ~~and $24~~$23 million for ~~dividends.~~dividends and $20 million for share repurchases, resulting in $182 million of cash and cash equivalents on hand as of May 2, 2020.

The non-current operating lease liabilities ~~amount~~ as of ~~August 3, 2019 is a result of the adoption of the revised lease accounting guidance during Fiscal 2019. Other non-current liabilities~~May 2, 2020 decreased ~~as of August 3, 2019~~ primarily due to the ~~amount~~payment of operating lease liabilities exceeding operating lease liabilities associated with new operating lease agreements that commenced in the last 12 months. Deferred taxes decreased as of August 4, 2018 including $61 million of deferred rent and deferred rent tenant improvement allowance liabilities which were classified as operating lease assets as of August 3, 2019, as a result of the adoption of the 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 August 3, 2019~~May 2, 2020 primarily due to timing differences associated with ~~depreciation,~~ amortization of intangibles and ~~prepaid expenses~~depreciation 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 ~~Half~~Quarter of Fiscal ~~2019~~2020 and the First ~~Half~~Quarter of Fiscal ~~2018~~2019 (in thousands):


	First Half				First Quarter
	Fiscal 2019		Fiscal 2018		Fiscal 2020		Fiscal 2019
Cash provided by operating activities	$	67,267	$	57,532
Cash used in operating activities					$	(45,849)	$	(6,088)
Cash used in investing activities		(15,976)		(22,651)		(8,591)		(8,282)
Cash used in financing activities		(29,089)		(33,932)
Cash provided by financing activities						183,908		11,579
Net change in cash and cash equivalents	$	22,202	$	949	$	129,468	$	(2,791)

Cash and cash equivalents on hand were ~~$31~~$182 million and $7$6 million at ~~August 3,~~May 2, 2020 and May 4, 2019, ~~and August 4, 2018,~~ respectively. Changes in cash flows in the First ~~Half~~Quarter of Fiscal ~~2019~~2020 and the First ~~Half~~Quarter of Fiscal ~~2018~~2019 related to operating activities, investing activities and financing activities are discussed below.

Operating Activities:

In the First ~~Half~~Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019, ~~and the First Half of Fiscal 2018,~~ operating activities ~~provided $67~~used $46 million and ~~$58~~$6 million ~~respectively,~~ of ~~cash.~~cash, respectively. The cash flow from operating activities for each period was primarily the result of net earnings (loss) for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization, impairment and equity-based compensation, as well as the net impact of changes in deferred taxes and ~~our working capital accounts.~~operating assets and liabilities. In both the First ~~Half~~Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019, changes in operating assets and ~~the First Half of Fiscal 2018, working capital account changes~~liabilities had an unfavorable impact on cash flow from operations. In the First ~~Half~~Quarter of Fiscal 2020, the more significant changes in operating assets and liabilities were a decrease in current liabilities, an increase in inventories and a net unfavorable change in other non-current liabilities and non-current assets, which decreased cash flow from operations, partially offset by a decrease in receivables and prepaid expenses and other current assets, which increased cash flow from operations. In the First Quarter of Fiscal 2019, the more significant changes in ~~working capital,~~operating assets and liabilities, 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, receivables and prepaid expenses, which increased cash flow from operations. In the First Half

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~~of Fiscal 2018, the more significant changes in working capital~~revised lease accounting guidance, were a decrease in current liabilities and an increase in receivables, which reduced cash flow from operations, ~~partially offset by~~and a ~~reduction~~decrease in ~~prepaid expenses,~~inventories, which increased cash flow from operations.

Investing Activities:

In the First ~~Half~~Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019, ~~and the First Half of Fiscal 2018,~~ investing activities used ~~$16~~$9 million and ~~$22~~$8 million ~~respectively,~~ of ~~cash. Our~~cash, respectively. On an ongoing basis, our cash flow used in investing activities ~~on an ongoing basis~~ 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 retail stores and restaurants; and facilities enhancements for distribution centers and offices.

Financing Activities:

In the First ~~Half~~Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019, ~~and the First Half of Fiscal 2018,~~ financing activities used $29 million and $34 million, respectively, of cash. During the First Half of Fiscal 2019 and the First Half of Fiscal 2018, we decreased debt and increased cash as our cash flow from operations was greater than our capital expenditures and payment of dividends. During the First Half of Fiscal 2019 and the First Half of Fiscal 2018 we paid $13provided $184 million and $12 million of ~~dividends,~~cash, respectively. ~~Also,~~During the First Quarter of Fiscal 2020, we increased debt in order to maintain certain cash amounts on our balance sheet during the COVID-19 pandemic as well as to fund our cash flows used in operations, share repurchases, capital expenditures and dividends, while in the First ~~Half~~Quarter of Fiscal 2019, we increased debt to fund our cash flows used in operations, capital expenditures and dividends.

During the First Quarter of Fiscal 2020, we repurchased $18 million of shares of our common stock pursuant to an open market stock repurchase program, which was suspended March 17, 2020. During the First Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019 we paid $1$4 million ~~for~~and $6 million in dividends, respectively. Both the ~~payment~~First Quarter of Fiscal 2020 and the First Quarter of Fiscal 2019 included certain amounts related to ~~previous acquisitions including~~ the ~~payment~~issuance of ~~certain holdback~~equity pursuant to our employee stock purchase plan and ~~contingent consideration amounts.~~the repurchase of equity awards for employee tax withholding liabilities due to the vesting of equity awards during the period.

~~If we are in a debt position, we~~We may borrow or 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. However, due to the uncertainty related to the COVID-19 pandemic, we expect to concurrently hold a significant amount of cash on hand as well as a significant amount of debt under on our U.S. Revolving Credit Agreement in Fiscal 2020. If we have cash and cash equivalents in excess of cash used in our ongoing operations, we will generally invest the excess cash in short term money market investments.

Liquidity and Capital Resources

~~In July 2019,~~As of May 2, 2020, we ~~amended the U.S. Revolving Credit Agreement by entering into the First Amendment to the Fourth Amended~~had $182 million of cash and ~~Restated Credit Agreement to (1) extend the maturity~~cash equivalents on hand. Additionally, we had $208 million of ~~the facility to July 2024,~~borrowings outstanding and ~~(2) modify certain provisions including a reduction~~$114 million of ~~interest rates on certain borrowings and a reduction in unused line fees. We had no amounts outstanding as of August 3, 2019~~availability under our U.S. Revolving Credit Agreement. We believe our U.S. Revolving Credit Agreement ~~compared~~will provide ample liquidity to ~~$25 million of borrowings outstanding as of August 4, 2018.~~ fund operating cash flow needs and other ongoing cash requirements during the COVID-19 pandemic in Fiscal 2020 until we return to generating positive cash flow from operations.

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 1.7% as of May 2, 2020), 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 (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.

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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 ~~August 3, 2019, $5~~May 2, 2020, $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 borrowing base, as of ~~August 3, 2019,~~May 2, 2020, we had ~~$311~~$114 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 only 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 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 ~~Second~~First Quarter of Fiscal ~~2019~~2020 and as of ~~August 3, 2019,~~May 2, 2020, 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 ~~August 3, 2019,~~May 2, 2020, we were compliant with all applicable 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.~~Agreement and positive cash flows from operations in the long term. 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.

On June 9, 2020, our Board of Directors approved a cash dividend of $0.25 per share payable on July 31, 2020 to shareholders of record as of the close of business on July 17, 2020. 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

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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 ~~August 3, 2019~~May 2, 2020 have not changed materially from the contractual obligations outstanding at February ~~2, 2019,~~1, 2020, as disclosed in our Annual Report on Form 10-K for Fiscal ~~2018~~2019 filed with the SEC, other than changes in amounts outstanding under our U.S. Revolving Credit Agreement and operating lease liabilities, as discussed above.

Our anticipated capital expenditures for Fiscal ~~2019,~~2020, including the ~~$16~~$9 million incurred in the First ~~Half~~Quarter of Fiscal ~~2019,~~2020, are expected to be approximately $30 million in ~~a range~~Fiscal 2020. Due to the uncertainty of ~~$45 million~~the COVID-19 pandemic we are deferring and/or cancelling certain capital expenditures that were originally planned for Fiscal 2020. However, we are continuing other projects, including certain direct to ~~$50 million. These expenditures are expected to consist primarily of costs associated with information technology initiatives, including e-commerce capabilities; new retail stores~~consumer location openings and ~~Marlin Bars; and investments to remodel existing retail stores and restaurants.~~remodels. Our capital expenditure amounts in future years

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~~may increase or decrease~~ will fluctuate from the amounts incurred in prior years depending on the information technology initiatives, 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, including those discussed below.~~estimates. We base our estimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions. We believe it is possible that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts. We believe that we have appropriately applied our critical accounting policies. However, in the event that inappropriate assumptions or methods were used relating to the critical accounting policies, our consolidated statements of operations could be 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 ~~2018.~~2019. There have not been any significant changes to ~~the application of~~ our critical accounting policies and estimates during the First ~~Half~~Quarter of Fiscal ~~2019.~~2020. 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 ~~2018.~~2019.

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 ~~2018.~~

2019. 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

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operating income for Fiscal ~~2018~~2019 are necessarily indicative of anticipated results for Fiscal ~~2019~~2020 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.~~years, particularly in light of the COVID-19 pandemic.

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 ~~2018.~~2019. There have not been any ~~significant~~material changes in our exposure to these risks during the First ~~Half~~Quarter of Fiscal ~~2019.~~2020.

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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.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting during the ~~Second~~First Quarter of Fiscal ~~2019~~2020 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

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 trademark and other intellectual property, licensing arrangements, real estate, employee relations matters, importing or exporting regulations, taxation ~~employee 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 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 may ~~also~~ adversely affect our business. ~~The risks~~In addition to the other information set forth in this report, investors should carefully consider the risk factors described in Part I. Item 1A. Risk Factors in our Annual Report on Form 10-K for ~~2018~~Fiscal 2019, which could materially affect our business, financial condition and/or operating results, as well as the following:

The COVID-19 pandemic has had, and will continue to have, a material adverse effect, on our business, revenues, financial condition and results of operations.

The COVID-19 pandemic has severely restricted the level of economic activity around the world. Governments and public health officials of many countries, states, cities and other geographic regions took preventative or protective actions to mitigate the spread and severity of the coronavirus, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes. Due to the COVID-19 pandemic, we temporarily closed all our retail stores and restaurants in North America on March 17, 2020. Subsequent to those closures, we also temporarily closed all of our retail locations in Australia. The COVID-19 pandemic and the related preventative and protective actions have significantly impacted our business and the business operations of other apparel retailers, including our wholesale customers, and have had, and will continue to have, a significant effect on our sales and results of operations for Fiscal 2020.

Our temporary retail store and restaurant closures starting in March 2020 were made in conjunction with orders, mandates, guidelines and recommendations from government and public health authorities limiting business activities, as well as in many cases in connection with closures of the centers in which our retail stores and restaurants are ~~not~~located. As a result of these closures, as well as the ~~only risks facing~~depressed consumer traffic and economic climate which have continued even as we started reopening our ~~company.~~locations, we determined that the payment of rents that might have otherwise been due under our retail store and restaurant leases was inappropriate. Accordingly, with limited exceptions where alternative arrangements with our landlords have been finalized, we discontinued rent payments starting in April 2020. We have been actively negotiating with our landlords on equitable arrangements in respect of the closure and subsequent periods and are confident that we will be able to resolve these matters with our landlords. However, there can be no assurances, and some of our landlords may choose to assert a claim that this non-payment constitutes a default under our leases. Successful claims against us, if any, could materially affect our business, operations, financial condition and future growth. Even where successful, litigation could be costly, distract our management and result in reputational harm.

We began reopening stores and restaurants starting on May 3, 2020 in a phased approach in accordance with local government guidelines and additional safety protocols implemented. As we reopen our stores, restaurants and office locations, as well as within our distribution centers, we have implemented additional processes and procedures to facilitate social distancing, to enhance cleaning and sanitation activities, including for high-touch surfaces throughout the day, to provide personal protective equipment to our employees and for takeout food and beverage services, handling

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merchandise returns and providing curbside service. These actions will result in increased costs to operate these locations on an ongoing basis.

In addition, our business is particularly sensitive to reductions in discretionary consumer spending, and we cannot predict the degree to, or the time period over, which our business will be affected by the coronavirus pandemic, even as our retail stores and restaurants are reopened to the public. There are numerous uncertainties associated with this pandemic, including the number of individuals who will become infected, whether a vaccine or cure that mitigates the effect of the virus will be synthesized, and, if so, when such vaccine or cure will be ready to be used, the extent of the protective and preventative measures that have been put in place by both governmental entities and other businesses and those that may be put in place in the future, whether the coronavirus’ impact will be seasonal, the duration of store and restaurant closures, including subsequent closures due to a positive coronavirus test for one of our employees or customers, the impact on the U.S. and world economy and numerous other uncertainties. Further, even after containment of the virus or after all of our stores and restaurants are able to fully resume operations, any significant reduction in consumer willingness to visit malls and shopping centers, consumer traffic, including as the result of limitations on the number of persons permitted in stores at one time, or the levels of consumer discretionary spending would result in a further loss of revenues of cash flows.

The coronavirus pandemic has also impacted, and may continue to impact, our office locations and distribution centers, which may negatively impact our ability to meet consumer demand and may increase our costs of production and distribution.

For the reasons set forth above and other reasons that may come to light if as a result of the coronavirus pandemic, we cannot reasonably estimate the impact to our business, revenues, financial condition or results of operations; however, the adverse impact of this event will be significant.

Any of the negative impacts of the COVID-19 pandemic, alone or in combination with others, could exacerbate many of the risk factors discussed in Part I. Item 1A. Risk Factors in our Annual Report on Form 10-K for Fiscal 2019. The full extent to which the COVID-19 pandemic will negatively affect our results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Our business may be adversely affected by instability, disruption, or destruction, including civil insurrection or social unrest.

Our business may be adversely affected by instability, disruption, or destruction, regardless of cause, including civil insurrection or social unrest. These events may result in closures of our retail stores, restaurants, offices or distribution centers, declines in consumer traffic, and/or property damage and loss, which could have a material adverse effect on our business, results of operations or financial condition. In addition, consumer reaction to any statements we may make in response to the protests, outrage and dialogue rightly sparked by the underlying social issues could be perceived in a way that negatively impacts the reputation, value and image of one or more of our brands.

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

During the First Quarter of Fiscal 2020, we repurchased the following shares of our common stock:


				Total Number of	Dollar Value
				Shares	(000s) of Shares
		Average		Purchased as	That May Yet be
	Total Number	Price		Part of Publicly	Purchased Under
	of Shares	Paid per		Announced Plans	the Plans or
Fiscal Month	Purchased⁽¹⁾	Share		or Programs⁽²⁾	Programs⁽²⁾
February (2/2/20 - 2/29/20)	21,941	$	62.48	21,941	$ 48,629
March (3/1/20 - 3/28/20)⁽³⁾	310,487	$	53.73	310,487	$ 31,947

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April (3/29/20 - 5/2/20)		45,605		$	41.02		—		$ 31,947
Total		378,033		$	52.70		332,428		$ 31,947

~~(a)~~

~~During the Second Quarter of Fiscal 2019, we did not sell any unregistered equity securities.~~

~~(b)~~(1)

We have certain stock incentive plans as described in Note 78 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~~2019. The share amounts in this column include the ~~plans, we can repurchase~~45,605 shares ~~from employees~~surrendered by participants in April 2020 to cover employee tax liabilities related to the vesting of restricted stock. Such repurchases are in accordance with the terms of our stock incentive plan and applicable award agreements and not pursuant to a publicly announced share repurchase program.

(2)

As disclosed in our Annual Report on Form 10-K for Fiscal 2017 and subsequent annual and quarterly reports, in March 2017, our Board of Directors authorized us to spend up to $50 million to repurchase shares of our stock. ~~During the Second Quarter~~This authorization superseded and replaced all previous authorizations to repurchase shares of ~~Fiscal 2019,~~our stock and has no automatic expiration. The share amounts in this column represent 332,428 shares ~~were~~ repurchased for $18 million during February and March 2020 under an open market stock repurchase program (Rule 10b5-1 plan) pursuant to ~~these plans.~~this share repurchase authorization.

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.

(3)

On March 17, 2020, we suspended our share repurchases until such time as we deem appropriate.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None

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ITEM 6. EXHIBITS


3.1		Restated Articles of Incorporation of Oxford Industries, Inc. (filed as Exhibit 3.1 to the Company’s Form ~~10Q~~10-Q for the fiscal quarter ended July 29, 2017)
3.2		Bylaws of Oxford Industries, Inc., as amended (filed as Exhibit 3.2 to the Company’s Form ~~10K~~10-K for Fiscal 2017)
~~10.1~~		First Amendment to Fourth Amended and Restated Credit Agreement, dated as of July 31, 2019, by and among Oxford Industries, Inc., Tommy Bahama Group, Inc., the Persons party thereto from time to time as guarantors, the financial institutions party thereto from time to time as lenders, and SunTrust Bank, as administrative agent (filed as Exhibit 10.1 to the Company’s Form 8-K filed on August 1, 2019)
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 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.


~~September 12, 2019~~June 11, 2020	OXFORD INDUSTRIES, INC.

	(Registrant)

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

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	Second Quarter Fiscal 2019
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	188,870	50	%	23	%	11	%	16	%	—	%
Lilly Pulitzer		75,555	51	%	29	%	—	%	20	%	—	%
Lanier Apparel		20,905	—	%	2	%	—	%	98	%	—	%
Southern Tide		12,468	—	%	22	%	—	%	78	%	—	%
Corporate and Other		4,202	—	%	62	%	—	%	29	%	9	%
Total	$	302,000	44	%	23	%	7	%	26	%	—	%


	Second Quarter Fiscal 2018
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other
Tommy Bahama	$	192,728	50	%	21	%	11	%	18	%	—	%
Lilly Pulitzer		71,623	52	%	27	%	—	%	21	%	—	%
Lanier Apparel		23,860	—	%	—	%	—	%	100	%	—	%
Southern Tide		11,777	—	%	20	%	—	%	80	%	—	%
Corporate and Other		2,653	—	%	51	%	—	%	22	%	27	%
Total	$	302,641	45	%	21	%	7	%	27	%	—	%


	Operating lease
Remainder of 2019	$	34,369
2020		60,608
2021		63,487
2022		59,825
2023		56,639
2024		43,981
After 2024		86,588
Total lease payments	$	405,497
Less: Difference between discounted and undiscounted lease payments		61,320
Present value of lease liabilities	$	344,177