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 ~~October~~July 29, ~~2022~~2023

	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 ~~December 2, 2022,~~August 28, 2023, there were ~~15,768,530~~15,620,354 shares of the registrant’s common stock outstanding.

Table of Contents

OXFORD INDUSTRIES, INC.

INDEX TO FORM 10-Q

For the ~~Third~~Second Quarter of Fiscal ~~2022~~2023


	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	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4843
Item 4. Controls and Procedures	4843
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	4843
Item 1A. Risk Factors	4943
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
~~Item 3. Defaults Upon Senior Securities~~	51
~~Item 4. Mine Safety Disclosures~~	5143
Item 5. Other Information	5144
Item 6. Exhibits	5145
SIGNATURES	5245

Table of Contents

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~~generally 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, 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 and pricing levels for apparel and related products, many of which may be impacted by current inflationary pressures, rising interest rates, concerns about the stability of the banking industry or general economic uncertainty; acquisition activities (such as ~~our recent~~the acquisition of Johnny Was), including our ability to integrate key functions, recognize anticipated synergies and minimize related disruptions or distractions to our business as a result of these activities; ~~the impact of the coronavirus (COVID-19) pandemic on our business, operations and financial results;~~ supply chain disruptions; costs and availability of labor and freight ~~deliveries;~~deliveries, including our ability to appropriately staff our retail stores and food and beverage locations; costs of products as well as the raw materials used in those ~~products;~~products, as well as our ability to pass along price increases to consumers; energy costs; our ability to ~~be more hyper-digital and~~ respond to rapidly changing consumer expectations; weather or natural disasters, including the ultimate impact of the recent wildfires on the island of Maui; the ability of business partners, including suppliers, vendors, wholesale customers, licensees, logistics providers and landlords, to meet their obligations to us and/or continue our business relationship to the same degree ~~in light of current or future staffing shortages, liquidity challenges and/or bankruptcy filings;~~as they have historically; retention of and disciplined execution by key management and other critical personnel; cybersecurity breaches and ransomware attacks, as well as our and our third party vendors’ ability to properly collect, use, manage and secure business, consumer and employee data; the level of our indebtedness, including the risks associated with heightened interest rates on the debt and the potential impact on our ability to operate and expand our business; changes in international, federal or state tax, trade and other laws and regulations, including the potential imposition of additional duties; the timing of shipments requested by our wholesale customers; ~~weather;~~ fluctuations and volatility in global financial and/or real estate markets; the timing and cost of retail store and food and beverage location openings and remodels, technology implementations and other capital ~~expenditures; store closures~~expenditures, including the timing, cost and successful implementation of changes to our distribution network; pandemics or other ~~operating restrictions due to COVID-19, natural disaster or otherwise;~~public health crises; expected outcomes of pending or potential litigation and regulatory actions; the increased consumer, employee and regulatory focus on ~~climate change and~~ environmental, social and governance issues; the regulation or prohibition of goods sourced, or containing raw materials or components, from certain regions and our ability to evidence compliance; access to capital and/or credit markets; factors that could affect our consolidated effective tax rate; the risk of impairment to goodwill and other intangible assets; and geopolitical risks, including those related to the war between Russia and Ukraine. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I. Item 1A. Risk Factors contained in our Fiscal ~~2021~~2022 Form 10-K, ~~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; "TBBC" means The Beaufort Bonnet Company; and “Fiscal ~~2021~~2022 Form 10-K” means our Annual Report on Form 10-K for Fiscal ~~2021.~~2022. Additionally, the terms listed below reflect the respective period noted:


Fiscal 2024		52 weeks ending February 1, 2025
Fiscal 2023		53 weeks ending February 3, 2024
Fiscal 2022		52 weeks ~~ending~~ended January 28, 2023
Fiscal 2021		52 weeks ended January 29, 2022
Fourth Quarter Fiscal ~~2020~~2023		5214 weeks ending February 3, 2024
Third Quarter Fiscal 2023		13 weeks ending October 28, 2023
Second Quarter Fiscal 2023		13 weeks ended ~~January 30, 2021~~July 29, 2023
First Quarter Fiscal 2023		13 weeks ended April 29, 2023
Fourth Quarter Fiscal 2022		13 weeks ~~ending~~ended January 28, 2023
Third Quarter Fiscal 2022		13 weeks ended October 29, 2022
Second Quarter Fiscal 2022		13 weeks ended July 30, 2022
First Quarter Fiscal 2022		13 weeks ended April 30, 2022
~~Fourth Quarter~~First Half Fiscal ~~2021~~2023		~~13 weeks ended January 29, 2022~~
~~Third Quarter Fiscal 2021~~		~~13 weeks ended October 30, 2021~~
~~Second Quarter Fiscal 2021~~		1326 weeks ended July ~~31, 2021~~
~~First Quarter Fiscal 2021~~		~~13 weeks ended May 1, 2021~~29, 2023
First Half Fiscal 2022		26 weeks ended July 30, 2022
~~First~~Second Half Fiscal ~~2021~~2023		2627 weeks ~~ended July 31, 2021~~ending February 3, 2024
Second Half Fiscal 2022		26 weeks ~~ending~~ended January 28, 2023
~~Second Half Fiscal 2021~~		~~26 weeks ended January 29, 2022~~
~~First Nine Months Fiscal 2022~~		~~39 weeks ended October 29, 2022~~
~~First Nine Months Fiscal 2021~~		~~39 weeks ended October 30, 2021~~

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par amounts)

(unaudited)


	October 29,		January 29,		October 30,		July 29,		January 28,		July 30,
	2022		2022		2021		2023		2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	14,976	$	44,859	$	37,976	$	7,790	$	8,826	$	31,269
Short-term investments		—		164,890		150,036		—		—		154,754
Receivables, net		64,497		34,550		46,266		55,583		43,986		48,691
Inventories, net		171,639		117,709		90,981		161,866		220,138		135,483
Income tax receivable		19,740		19,728		18,085		19,401		19,440		19,743
Prepaid expenses and other current assets		28,643		18,599		23,609		37,740		38,073		31,308
Total Current Assets	$	299,495	$	400,335	$	366,953	$	282,380	$	330,463	$	421,248
Property and equipment, net		173,391		152,447		156,672		188,004		177,584		150,887
Intangible assets, net		287,626		155,307		155,527		277,114		283,845		154,853
Goodwill		116,268		23,869		23,909		123,079		120,498		23,861
Operating lease assets		237,078		195,100		200,508		241,452		240,690		179,217
Other assets, net		26,459		30,584		29,234		37,829		35,585		27,136
Total Assets	$	1,140,317	$	957,642	$	932,803	$	1,149,858	$	1,188,665	$	957,202
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	72,932	$	80,753	$	64,709	$	76,216	$	94,611	$	76,974
Accrued compensation		36,150		30,345		32,744		20,481		35,022		28,779
Current portion of operating lease liabilities		62,349		61,272		58,287		67,676		73,865		53,119
Accrued expenses and other liabilities		58,964		53,796		51,432		68,188		66,141		63,768
Total Current Liabilities	$	230,395	$	226,166	$	207,172	$	232,561	$	269,639	$	222,640
Long-term debt		130,449		—		—		48,472		119,011		—
Non-current portion of operating lease liabilities		225,921		199,488		206,484		219,207		220,709		180,092
Other non-current liabilities		18,058		21,413		21,779		20,402		20,055		19,200
Deferred income taxes		2,455		2,911		1,899		4,587		2,981		1,254
Shareholders’ Equity
Common stock, $1.00 par value per share		15,815		16,805		16,891		15,630		15,774		15,960
Additional paid-in capital		169,063		163,156		160,421		170,789		172,175		166,139
Retained earnings		351,731		331,175		321,238		440,319		370,145		355,037
Accumulated other comprehensive loss		(3,570)		(3,472)		(3,081)		(2,109)		(1,824)		(3,120)
Total Shareholders’ Equity	$	533,039	$	507,664	$	495,469	$	624,629	$	556,270	$	534,016
Total Liabilities and Shareholders’ Equity	$	1,140,317	$	957,642	$	932,803	$	1,149,858	$	1,188,665	$	957,202

See accompanying notes.

Table of Contents

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Third Quarter

First Nine Months

Fiscal 2022

Fiscal 2021

Fiscal 2022

Fiscal 2021

Net sales

$
313,033

$
247,729

$
1,029,044

$
842,163

Cost of goods sold

115,339

95,191

372,824

313,414

Gross profit

$
197,694

$
152,538

$
656,220

$
528,749

SG&A

175,027

137,505

495,574

420,997

Royalties and other operating income

4,648

15,574

18,018

25,744

Operating income

$
27,315

$
30,607

$
178,664

$
133,496

Interest expense, net

698

222

1,214

685

Earnings before income taxes

$
26,617

$
30,385

$
177,450

$
132,811

Income tax expense

6,951

4,400

43,764

26,898

Net earnings

$
19,666

$
25,985

$
133,686

$
105,913

Net earnings per share:









Basic

$
1.25

$
1.56

$
8.36

$
6.37

Diluted

$
1.22

$
1.54

$
8.19

$
6.29

Weighted average shares outstanding:







Basic

15,740

16,649

15,992

16,627

Diluted

16,139

16,872

16,333

16,841

Dividends declared per share

$
0.55

$
0.42

$
1.65

$
1.21


	Second Quarter				First Half
	Fiscal 2023		Fiscal 2022		Fiscal 2023		Fiscal 2022
Net sales	$	420,319	$	363,430	$	840,416	$	716,011
Cost of goods sold		151,590		131,281		296,558		257,485
Gross profit	$	268,729	$	232,149	$	543,858	$	458,526
SG&A		205,231		163,135		408,380		320,547
Royalties and other operating income		4,176		6,357		12,497		13,370
Operating income	$	67,674	$	75,371	$	147,975	$	151,349
Interest expense, net		1,297		274		3,639		516
Earnings before income taxes	$	66,377	$	75,097	$	144,336	$	150,833
Income tax expense		14,924		18,485		34,345		36,813
Net earnings	$	51,453	$	56,612	$	109,991	$	114,020

Net earnings per share:
Basic	$	3.31	$	3.56	$	7.06	$	7.07
Diluted	$	3.22	$	3.49	$	6.86	$	6.94
Weighted average shares outstanding:
Basic		15,550		15,919		15,589		16,118
Diluted		15,979		16,238		16,025		16,430
Dividends declared per share	$	0.65	$	0.55	$	1.30	$	1.10

See accompanying notes.

Table of Contents

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Third Quarter				First Nine Months				Second Quarter				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022		Fiscal 2023		Fiscal 2022
Net earnings	$	19,666	$	25,985	$	133,686	$	105,913	$	51,453	$	56,612	$	109,991	$	114,020
Other comprehensive income (loss), net of taxes:
Net foreign currency translation adjustment		(450)		654		(98)		583		319		(125)		(285)		352
Comprehensive income	$	19,216	$	26,639	$	133,588	$	106,496	$	51,772	$	56,487	$	109,706	$	114,372

See accompanying notes.

Table of Contents

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

First Nine Months


Fiscal 2022

Fiscal 2021

Cash Flows From Operating Activities:





Net earnings

$
133,686

$
105,913

Adjustments to reconcile net earnings to cash flows from operating activities:





Depreciation

31,126

28,592

Amortization of intangible assets

2,322

660

Equity compensation expense

7,796

5,854

Gain on sale of investment in unconsolidated entity

—

(11,586)

Amortization of deferred financing costs

258

258

Change in fair value of contingent consideration

—

786

Deferred income taxes

(456)

3,115

Changes in operating assets and liabilities, net of acquisitions and dispositions:



Receivables, net

(21,230)

(14,341)

Inventories, net

(31,332)

32,544

Income tax receivable

(12)

(109)

Prepaid expenses and other current assets

(5,644)

(3,238)

Current liabilities

(23,271)

10,361

Other balance sheet changes

(6,988)

(1,724)

Cash provided by operating activities

$
86,255

$
157,085

Cash Flows From Investing Activities:





Acquisitions, net of cash acquired

(263,656)

—

Purchases of property and equipment

(32,331)

(25,132)

Purchases of short-term investments

(70,000)

(150,000)

Proceeds from short-term investments

234,837

—

Proceeds from sale of investment in unconsolidated entity

—

14,586

Other investing activities

1,450

(2,000)

Cash used in investing activities

$
(129,700)

$
(162,546)

Cash Flows From Financing Activities:





Repayment of revolving credit arrangements

(45,262)

—

Proceeds from revolving credit arrangements

175,711

—

Repurchase of common stock

(86,804)

—

Proceeds from issuance of common stock

1,263

1,044

Repurchase of equity awards for employee tax withholding liabilities

(3,166)

(2,983)

Cash dividends paid

(26,572)

(20,447)

Other financing activities

(2,010)

(749)

Cash provided by (used in) financing activities

$
13,160

$
(23,135)

Net change in cash and cash equivalents

$
(30,285)

$
(28,596)

Effect of foreign currency translation on cash and cash equivalents

402

559

Cash and cash equivalents at the beginning of year

44,859

66,013

Cash and cash equivalents at the end of period

$
14,976

$
37,976


	First Half
	Fiscal 2023		Fiscal 2022
Cash Flows From Operating Activities:
Net earnings	$	109,991	$	114,020
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation		23,128		20,358
Amortization of intangible assets		7,331		454
Equity compensation expense		7,508		5,252
Gain on sale of assets		(1,756)		—
Amortization and write-off of deferred financing costs		368		172
Deferred income taxes		1,451		(1,657)
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net		(11,611)		(15,322)
Inventories, net		57,947		(17,867)
Income tax receivable		39		(15)
Prepaid expenses and other current assets		360		(11,541)
Current liabilities		(39,471)		(939)
Other balance sheet changes		(2,785)		(2,286)
Cash provided by operating activities	$	152,500	$	90,629
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired		(3,320)		—
Purchases of property and equipment		(31,410)		(19,746)
Purchases of short-term investments		—		(70,000)
Proceeds from short-term investments		—		80,000
Proceeds from the sale of property, plant and equipment		2,125		—
Other investing activities		(33)		(50)
Cash used in investing activities	$	(32,638)	$	(9,796)
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements		(334,225)		—
Proceeds from revolving credit arrangements		263,686		—
Deferred financing costs paid		(1,661)		—
Repurchase of common stock		(18,987)		(72,680)
Proceeds from issuance of common stock		1,090		882
Repurchase of equity awards for employee tax withholding liabilities		(9,941)		(3,166)
Cash dividends paid		(20,843)		(17,829)
Other financing activities		—		(2,010)
Cash used in financing activities	$	(120,881)	$	(94,803)
Net change in cash and cash equivalents	$	(1,019)	$	(13,970)
Effect of foreign currency translation on cash and cash equivalents		(17)		380
Cash and cash equivalents at the beginning of year		8,826		44,859
Cash and cash equivalents at the end of period	$	7,790	$	31,269

See accompanying notes.

Table of Contents

OXFORD INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~THIRD~~SECOND QUARTER OF FISCAL ~~2022~~2023

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 interim periods are not necessarily indicative of results to be expected for a full fiscal year due to the seasonality of our ~~business, as well as the acquisition of Johnny Was during the Third Quarter of Fiscal 2022.~~business.

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.

The significant accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Fiscal ~~2021~~2022 Form 10-K. No recently issued guidance adopted in Fiscal ~~2022~~2023 had a material impact on our consolidated financial statements upon adoption or is expected to have a material impact in future periods.

~~On September 19, 2022, we acquired~~ These financial statements should be read in conjunction with the Johnny Was® lifestyle apparel brand and its related assets and operations, which is discussed in further detail in Note 7 of these unaudited condensed consolidated financial statements. Also, in Fiscal 2021, we exited our Lanier Apparel business, as discussed in Note 11 of our consolidated financial statements ofand notes thereto included in our Fiscal ~~2021~~2022 Form 10-K. ~~Johnny Was in Fiscal 2022 and Lanier Apparel in Fiscal 2021 are each disclosed as separate operating groups in Note 2 of these unaudited condensed consolidated financial statements.~~

~~Recently Issued Accounting Standards Applicable to Future Periods~~

Recent accounting pronouncements pending adoption are either not applicable or not expected to have a material impact on our consolidated financial statements.

~~Recent Macroeconomic Conditions~~

The COVID-19 pandemic has had a significant effect on overall economic conditions and our operations in recent years. In Fiscal 2021, the economic environment improved significantly with a rebound in retail traffic starting in March 2021 and other improvements as the year progressed, although certain stores were closed for portions of Fiscal 2021, particularly in the First Quarter of Fiscal 2021. This exceptionally strong consumer demand, along with the strength of our brands, resulted in record earnings for us during Fiscal 2021 and the First Nine Months of Fiscal 2022. The strong earnings in recent periods are despite certain challenges in the retail apparel market, including labor shortages, supply chain disruptions and product and operating cost increases in Fiscal 2021 and Fiscal 2022. We, as well as others in our industry, have increased prices to attempt to offset inflationary pressures.

There can be no assurance that the strong consumer demand of Fiscal 2021 and Fiscal 2022 will continue for our business or the broader retail apparel market. There remains significant uncertainty in the macroeconomic environment as to the impact of changing consumer discretionary spending habits, recent supply chain and other business disruptions, ongoing operating cost increases and other inflationary pressures, rising interest rates, the duration and severity of the pandemic and general economic conditions. Thus, the ultimate impact of these items on our business remains uncertain at this time.

~~Table of Contents~~

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. With our acquisition of Johnny Was on September 19, 2022, our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups. ~~Results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021.~~

Tommy Bahama, Lilly Pulitzer and Johnny Was each design, source, market and distribute apparel and related products bearing their respective trademarks and may license their trademarks for other product categories. The Emerging Brands operating group, which was organized in Fiscal 2022, consists of the operations of our smaller, earlier stage Southern Tide, TBBC and Duck Head brands. In prior years, Southern Tide was reported as a separate operating group, while both TBBC and Duck Head were included in Corporate and Other. All prior year amounts have been restated to conform to the current year presentation.

Each of the smaller brands included in Emerging Brands designs, sources, markets and distributes apparel and related products bearing its respective trademarks and is supported by Oxford’s emerging brands team that provides certain support functions to the smaller brands, including marketing and advertising execution, customer relationship management and analysis and other functions. The shared resources provide for operating efficiencies and enhanced knowledge sharing across our smaller brands.

Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, the elimination of ~~inter-segment~~any sales between operating groups, any other items that are not allocated to the operating groups, including LIFO inventory accounting adjustments, and the operations of our Lyons, Georgia distribution center and our Oxford America business, which we exited in Fiscal 2022. The accounting policies of the reportable operating segments are the same as those described in our Fiscal 2022 Form 10-K.

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


	Third Quarter				First Nine Months				Second Quarter				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022		Fiscal 2023		Fiscal 2022
Net sales
Tommy Bahama	$	178,645	$	148,454	$	650,677	$	513,985	$	245,443	$	243,965	$	484,878	$	472,032
Lilly Pulitzer		84,053		72,157		264,763		233,066		91,349		88,665		188,799		180,710
Johnny Was ⁽¹⁾		22,661		—		22,661		—		52,023		—		101,514		—
Emerging Brands		26,912		22,082		88,588		67,336		31,580		29,913		65,571		61,676
Lanier Apparel		—		4,232		—		24,743
Corporate and Other		762		804		2,355		3,033		(76)		887		(346)		1,593
Consolidated net sales	$	313,033	$	247,729	$	1,029,044	$	842,163	$	420,319	$	363,430	$	840,416	$	716,011

Depreciation and amortization
Tommy Bahama	$	6,576	$	6,895	$	20,110	$	20,801	$	6,073	$	6,916	$	12,057	$	13,534
Lilly Pulitzer		3,288		2,445		9,384		6,833		3,979		3,121		7,371		6,096
Johnny Was ⁽¹⁾		2,184		—		2,184		—		4,717		—		9,909		—
Emerging Brands		391		324		1,143		955		460		393		885		752
Lanier Apparel		—		27		—		88
Corporate and Other		197		186		627		575		58		192		237		430
Consolidated depreciation and amortization	$	12,636	$	9,877	$	33,448	$	29,252	$	15,287	$	10,622	$	30,459	$	20,812

Operating income (loss)
Tommy Bahama	$	18,984	$	5,531	$	130,508	$	73,515	$	51,037	$	58,918	$	106,558	$	111,524
Lilly Pulitzer		12,688		15,985		60,358		61,713		18,566		21,492		43,082		47,670
Johnny Was ⁽¹⁾		117		—		117		—		3,847		—		6,331		—
Emerging Brands		3,729		4,103		15,456		13,565		3,028		3,991		6,941		11,727
Lanier Apparel		—		348		—		2,053
Corporate and Other		(8,203)		4,640		(27,775)		(17,350)		(8,804)		(9,030)		(14,937)		(19,572)
Consolidated operating income		27,315		30,607	$	178,664	$	133,496		67,674		75,371	$	147,975	$	151,349
Interest expense, net		698		222		1,214		685		1,297		274		3,639		516
Earnings before income taxes	$	26,617	$	30,385	$	177,450	$	132,811	$	66,377	$	75,097	$	144,336	$	150,833


	October 29, 2022		January 29, 2022		October 30, 2021		July 29, 2023		January 28, 2023		July 30, 2022
Assets
Tommy Bahama ⁽²⁾	$	544,947	$	531,678	$	531,534	$	548,893	$	569,833	$	524,765
Lilly Pulitzer ⁽³⁾		192,609		176,757		173,104		201,310		211,119		198,681
Johnny Was ⁽⁴⁾⁽¹⁾		350,212		—		—		330,503		334,603		—
Emerging Brands ⁽⁵⁾⁽⁴⁾		83,280		66,825		54,532		92,675		91,306		76,368
Lanier Apparel⁽⁶⁾		—		207		3,261
Corporate and Other⁽⁷⁾		(30,731)		182,175		170,372
Corporate and Other⁽⁵⁾								(23,523)		(18,196)		157,388
Consolidated Total Assets	$	1,140,317	$	957,642	$	932,803	$	1,149,858	$	1,188,665	$	957,202

(1)	~~Amount included for Johnny Was represents the post-acquisition period only.~~

~~(2)~~

Increase in Tommy Bahama total assets from October 30, 2021 includes increases in inventories and receivables partially offset by reductions in non-current assets, including operating lease assets and property and equipment.

~~(3)~~

~~Increase in Lilly Pulitzer total assets from October 30, 2021 includes increases in inventories and property and equipment partially offset by reductions in operating lease assets.~~

~~(4)~~

The Johnny Was business was acquired on September 19, 2022.

~~(5)~~(2)

Increase in Tommy Bahama total assets from July 30, 2022, includes increases in operating lease assets and inventories.

(3)	Increase in Lilly Pulitzer total assets from July 30, 2022, includes increases in property and equipment partially offset by decreases in operating lease assets.

(4)	Increase in Emerging Brands total assets from ~~October~~July 30, ~~2021~~2022, includes increases in ~~inventories and non-current assets, including~~ operating lease assets, ~~and~~inventories, property and ~~equipment.~~equipment and other non-current assets.

~~(6)~~(5)

Decrease in ~~Lanier Apparel~~Corporate and Other total assets from ~~October~~July 30, ~~2021 is due~~2022, includes reductions in short-term investments and cash and cash equivalents, which were used to ~~the exit~~fund a portion of the ~~Lanier Apparel business during Fiscal 2021.~~acquisition purchase price for Johnny Was.

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~~(7)~~

Decrease in Corporate and Other total assets from October 30, 2021 includes reductions in short-term investments, cash and cash equivalents, which were used to fund a portion of the acquisition purchase price for Johnny Was, and reductions in inventories, which was primarily due to the change in the LIFO reserve, and reductions in other non-current assets.

The tables below quantify net sales, for each operating group and in total (in thousands), and the percentage of net sales by distribution channel for each operating group and in total, for each ~~quarter or nine month~~ period ~~presented, except that the amounts included for Johnny Was represent the post-acquisition period only.~~presented. We have calculated all percentages below based on actual data, and percentages may not add to 100 due to rounding.


	Third Quarter Fiscal 2022												Second Quarter Fiscal 2023
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other		Net Sales		Retail		E-commerce		Food & Beverage		Wholesale		Other
Tommy Bahama	$	178,645	44	%	20	%	13	%	23	%	—	%	$	245,443	46	%	28	%	12	%	14	%	—	%
Lilly Pulitzer		84,053	27	%	62	%	—	%	11	%	—	%		91,349	36	%	50	%	—	%	14	%	—	%
Johnny Was ⁽¹⁾		22,661	38	%	41	%	—	%	21	%	—	%		52,023	38	%	43	%	—	%	19	%	—	%
Emerging Brands		26,912	5	%	40	%	—	%	55	%	—	%		31,580	12	%	48	%	—	%	40	%	—	%
Lanier Apparel		—	—	%	—	%	—	%	—	%	—	%
Corporate and Other		762	—	%	—	%	—	%	47	%	53	%		(76)	—	%	—	%	—	%	—	%	NM	%
Total	$	313,033	36	%	34	%	7	%	22	%	—	%	$	420,319	41	%	36	%	7	%	16	%	—	%


	Third Quarter Fiscal 2021												Second Quarter Fiscal 2022
	Net Sales		Retail		E-commerce		Restaurant		Wholesale		Other		Net Sales		Retail		E-commerce		Food & Beverage		Wholesale		Other
Tommy Bahama	$	148,454	47	%	22	%	13	%	18	%	—	%	$	243,965	48	%	28	%	11	%	13	%	—	%
Lilly Pulitzer		72,157	31	%	58	%	—	%	11	%	—	%		88,665	40	%	43	%	—	%	17	%	—	%
Johnny Was(1)		—	—	%	—	%	—		—	%	—	%		—	—	%	—	%	—		—	%	—	%
Emerging Brands		22,082	4	%	34	%	—	%	62	%	—	%		29,913	7	%	46	%	—	%	47	%	—	%
Lanier Apparel		4,232	—	%	—	%	—	%	100	%	—	%
Corporate and Other		804	—	%	—	%	—	%	67	%	33	%		887	—	%	—	%	—	%	—	%	NM	%
Total	$	247,729	37	%	33	%	8	%	21	%	—	%	$	363,430	42	%	33	%	8	%	17	%	—	%


	First Nine Months 2022												First Half 2023
	Net Sales		Retail		E‑commerce		Restaurant		Wholesale		Other		Net Sales		Retail		E‑commerce		Food & Beverage		Wholesale		Other
Tommy Bahama	$	650,677	46	%	23	%	12	%	19	%	—	%	$	484,878	45	%	24	%	13	%	18	%	—	%
Lilly Pulitzer		264,763	34	%	49	%	—	%	17	%	—	%		188,799	35	%	49	%	—	%	16	%	—	%
Johnny Was ⁽¹⁾		22,661	38	%	41	%	—	%	21	%	—	%		101,514	37	%	40	%	—	%	23	%	—	%
Emerging Brands		88,588	5	%	39	%	—	%	56	%	—	%		65,571	10	%	42	%	—	%	48	%	—	%
Lanier Apparel		—	—	%	—	%	—	%	—	%	—	%
Corporate and Other		2,355	—	%	—	%	—	%	50	%	50	%		(346)	—	%	—	%	—	%	—	%	NM	%
Consolidated net sales	$	1,029,044	39	%	31	%	8	%	21	%	—	%	$	840,416	39	%	33	%	7	%	21	%	—	%


	First Nine Months 2021												First Half 2022
	Net Sales		Retail		E‑commerce		Restaurant		Wholesale		Other		Net Sales		Retail		E‑commerce		Food & Beverage		Wholesale		Other
Tommy Bahama	$	513,985	46	%	24	%	14	%	16	%	—	%	$	472,032	47	%	24	%	12	%	17	%	—	%
Lilly Pulitzer		233,066	35	%	48	%	—	%	17	%	—	%		180,710	37	%	43	%	—	%	20	%	—	%
Johnny Was(1)		—	—	%	—	%	—	%	—	%	—	%		—	—	%	—	%	—	%	—	%	—	%
Emerging Brands		67,336	4	%	37	%	—	%	59	%	—	%		61,676	6	%	38	%	—	%	56	%	—	%
Lanier Apparel		24,743	—	%	—	%	—	%	100	%	—	%
Corporate and Other		3,033	—	%	—	%	—	%	65	%	35	%		1,593	—	%	—	%	—	%	—	%	NM	%
Consolidated net sales	$	842,163	38	%	31	%	8	%	22	%	—	%	$	716,011	41	%	30	%	8	%	21	%	—	%

(1)

~~Amount included for~~The Johnny Was ~~represents the period from~~business was acquired on September 19, ~~2022 through October 29, 2022 only.~~2022.

~~Table of Contents~~

3. Revenue Recognition and Receivables: Our revenue consists of direct to consumer sales, including our retail store, e-commerce and ~~restaurant~~food and beverage operations, and wholesale sales, as well as royalty income, which is included in royalties and other operating 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 is described in the significant accounting policies described in our Fiscal ~~2021~~2022 Form 10-K.

Table of Contents

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


	Third Quarter				First Nine Months				Second Quarter				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022		Fiscal 2023		Fiscal 2022
Retail	$	112,344	$	92,579	$	402,400	$	319,493	$	170,137	$	153,976	$	327,742	$	290,056
E-commerce		107,756		82,402		323,045		261,393		152,264		118,816		278,028		215,289
Restaurant		23,157		19,748		81,333		70,784
Food & Beverage										29,503		27,291		61,535		58,176
Wholesale		69,292		52,658		220,707		189,133		68,312		62,799		173,141		151,415
Other		484		342		1,559		1,360		103		548		(30)		1,075
Net sales	$	313,033	$	247,729	$	1,029,044	$	842,163	$	420,319	$	363,430	$	840,416	$	716,011

An estimated sales return liability of $9$14 million, ~~$11~~$12 million and $7$14 million for expected direct to consumer returns is classified in accrued expenses and other liabilities in our consolidated balance sheet as of ~~October~~July 29, ~~2022,~~2023, January ~~29,~~28, 2023, and July 30, 2022, ~~and October 30, 2021,~~ respectively. As of ~~October~~July 29, ~~2022,~~2023, January ~~29,~~28, 2023, and July 30, 2022, ~~and October 30, 2021,~~ prepaid expenses and other current assets included $4 million, $4 million and $3$5 million, respectively, ~~representing~~relating to the estimated value of inventory for expected direct to consumer and wholesale sales returns.

Substantially all amounts recognized in receivables, net represent trade receivables related to contracts with customers. In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising support to and accept returns from certain of our wholesale customers for certain products. As of ~~October~~July 29, ~~2022,~~2023, January ~~29,~~28, 2023, and July 30, 2022, ~~and October 30, 2021,~~ reserve balances recorded as a reduction to receivables related to these items were ~~$5 million,~~ $3 million, $4 million and $5$4 million, respectively. As of ~~October~~July 29, ~~2022,~~2023, January ~~29,~~28, 2023, and July 30, 2022, ~~and October 30, 2021,~~ our provision for credit losses related to receivables included in our consolidated balance sheets was $1 million, $1 million and $2$1 million, respectively. In both the First Nine Months of Fiscal 2022 and the First Nine Months of Fiscal 2021, provisions for credit losses expense included in our consolidated statement of operations and the write-offs of credit losses were less than $1 million.

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 accrued expenses and other liabilities in our consolidated balance sheet and totaled ~~$17~~$18 million, ~~$16~~$19 million and ~~$14~~$15 million as of ~~October~~July 29, 2023, January 28, 2023, and July 30, 2022, ~~January 29, 2022, and October 30, 2021,~~ respectively.

4. Leases: In the ordinary course of business, we enter into real estate lease agreements for our direct to consumer locations, which include retail and food and beverage locations, and office and warehouse/distribution space, as well as leases for certain equipment. Our real estate leases have varying terms and expirations and may have provisions to extend, renew or terminate the lease agreement at our discretion, among other provisions. Our real estate lease terms are typically for a period of ten years or less and typically require monthly rent payments with specified rent escalations 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 direct to consumer location leases often provide for contingent rent payments based on sales if certain sales thresholds are achieved.

For the ~~First Nine Months~~Second Quarter of Fiscal ~~2022~~2023, operating lease expense ~~which includes amounts used in determining the operating lease liability and operating lease asset,~~ was ~~$43~~$18 million and variable lease expense was ~~$31~~$11 million, resulting in total lease expense of ~~$75~~$29 million compared to ~~$70~~$22 million of total lease expense in the Second Quarter of Fiscal 2022. For the First Half of Fiscal 2023, operating lease expense was $35 million and variable lease expense was $21 million, resulting in total lease expense of $56 million compared to $47 million of total lease expense in the First ~~Nine Months~~Half of Fiscal ~~2021.~~ 2022.

Cash paid for lease amounts included in the measurement of operating lease liabilities in the First Half of Fiscal 2023 was $41 million, while cash paid for lease amounts included in the measurement of operating lease liabilities in the First Half of Fiscal 2022 was $35 million.

The increase in lease expense and cash paid was primarily driven by the acquisition of Johnny Was.

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~~First Nine Months of Fiscal 2022 was $53 million, while cash paid for lease amounts included in the measurement of operating lease liabilities in the First Nine Months of Fiscal 2021 was $53 million.~~

As of ~~October~~July 29, ~~2022,~~2023, the stated lease liability payments for the fiscal years specified below were as follows (in thousands):


	Operating lease		Operating lease
Remainder of 2022	$	15,300
2023		79,865
Remainder of 2023			$	39,686
2024		63,653		72,199
2025		47,707		55,324
2026		40,493		48,295
2027		27,146		34,751
After 2027		52,525
2028				28,479
After 2028				53,276
Total lease payments	$	326,689	$	332,010
Less: Difference between discounted and undiscounted lease payments		38,419		45,127
Present value of lease liabilities	$	288,270	$	286,883

5. Income Taxes: Our effective income tax rate for the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 was ~~26.1%~~22.5% while our effective income tax rate for the ~~Third~~Second Quarter of Fiscal ~~2021~~2022 was ~~14.5%~~24.6%. Our effective income tax rate for the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 was ~~24.7%~~23.8% while our effective income tax rate for the First ~~Nine Months~~Half of Fiscal ~~2021~~2022 was ~~20.3%~~24.4%.

The effective tax rate for ~~both~~ the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 benefitted significantly from the vesting of restricted stock awards at a price higher than the grant date fair value and ~~the First Nine Months of Fiscal 2021 benefitted from~~ certain ~~favorable~~other items that resulted in a lower tax rate than a more typical annual effective tax rate of approximately 25% ~~to 26%~~.

The ~~income tax expense in both the~~ First ~~Nine Months~~Half of Fiscal 2022 ~~and the First Nine Months of Fiscal 2021~~ included ~~the benefit of~~ the utilization of certain net operating loss carryforward amounts in certain state and foreign jurisdictions and certain other items.

Inflation Reduction Act of 2022

On August 16, 2022, the ~~recognition~~U.S. government enacted the Inflation Reduction Act (“IRA”) into law. The IRA implemented a corporate alternative minimum tax, subject to certain thresholds being met, and a 1% excise tax on share repurchases effective beginning January 1, 2023. We do not currently expect that the tax-related provisions of ~~certain tax credit amounts and~~ the ~~vesting of restricted stock awards at~~IRA will have a price higher than the grant date fair value. These favorable items were partially offset by certain unfavorable permanent items which are not deductible for income tax purposes. Additionally, and more significantly, the income tax expense inmaterial effect on our reported results, cash flows or financial position. For the First ~~Nine Months~~Half of Fiscal ~~2021~~2023, excise taxes included as part of the ~~benefit~~price of common stock repurchased during the period did not have a $2 million net reduction in uncertain tax positions resulting from the settlement of those uncertain tax position amounts in the First Quarter of Fiscal 2021 and the utilization of benefits associated with certain capital losses to substantially offset the gain recognizedmaterial effect on ~~the sale of an unconsolidated entity in the Third Quarter of Fiscal 2021.~~our reported results.

6. Shareholders’ Equity: InFrom time to time, we repurchase our common stock mainly through open market repurchase plans. During the Second Quarter of Fiscal 2023 and First ~~Nine Months~~Half of 2023, we repurchased 186,000 shares of our common stock as part of an open market repurchase program at a cost of $19 million. During the Second Quarter of Fiscal 2022 and First Half of Fiscal 2022, we repurchased ~~976,000~~339,000 and 830,000 shares of our common stock, respectively, at a cost of $30 million and $73 million, respectively. The excise taxes included in the cost of shares repurchased during Fiscal 2023 was not material. Additionally, subsequent to July 29, 2023, we repurchased an additional 10,000 shares of our common stock for ~~$87~~$1 million under our $100 million open market stock repurchase program after repurchasing 91,000 shares for $8 million in the Fourth Quarter of Fiscal 2021. These repurchases resulted in $5 million remaining under the existing open market repurchase program and $55 million remaining under our existing Board of Directors’ authorization as of October 29, 2022. Additionally, subsequent to October 29, 2022, we repurchased an additional 47,000 shares of our common stock for $5 million under the open market repurchase program resulting in no amounts remaining underthat completed the open market repurchase program as of ~~December 8, 2022.~~August 31, 2023.

We also repurchase shares from our employees to cover employee tax liabilities related to the vesting of shares of our common stock. During ~~both~~ the First ~~Quarter~~Half of Fiscal 2023 and the First Half of Fiscal 2022, ~~and the First Quarter of Fiscal 2021,~~ we repurchased $10 million and $3 million of shares, respectively, from our employees to cover employee tax liabilities related to the vesting of shares of our common stock.

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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.


	Fiscal 2021										Fiscal 2022
	Common Stock		APIC		Retained Earnings		AOCI		Total		Common Stock		APIC		Retained Earnings		AOCI		Total
January 30, 2021	$	16,889	$	156,508	$	235,995	$	(3,664)	$	405,728
January 29, 2022											$	16,805	$	163,156	$	331,175	$	(3,472)	$	507,664
Comprehensive income		—		—		28,468		391		28,859		—		—		57,408		477		57,885
Shares issued under equity plans		39		283		—		—		322		5		387		—		—		392
Compensation expense for equity awards		—		2,227		—		—		2,227		—		2,725		—		—		2,725
Repurchase of shares		(34)		(2,949)		—		—		(2,983)		(526)		(3,131)		(42,375)		—		(46,032)
Dividends declared		—		—		(6,252)		—		(6,252)		—		—		(9,214)		—		(9,214)
May 1, 2021	$	16,894	$	156,069	$	258,211	$	(3,273)	$	427,901
April 30, 2022											$	16,284	$	163,137	$	336,994	$	(2,995)	$	513,420
Comprehensive income		—		—		51,460		(462)		50,998		—		—		56,612		(125)		56,487
Shares issued under equity plans		1		341		—		—		342		15		475		—		—		490
Compensation expense for equity awards		—		1,673		—		—		1,673		—		2,527		—		—		2,527
Repurchase of shares		—		—		—		—		—		(339)		—		(29,475)		—		(29,814)
Dividends declared		—		—		(7,215)		—		(7,215)		—		—		(9,094)		—		(9,094)
July 31, 2021	$	16,895	$	158,083	$	302,456	$	(3,735)	$	473,699
July 30, 2022											$	15,960	$	166,139	$	355,037	$	(3,120)	$	534,016
Comprehensive income		—		—		25,985		654		26,639		—		—		19,666		(450)		19,216
Shares issued under equity plans		(4)		386		—		—		382		1		379		—		—		380
Compensation expense for equity awards		—		1,952		—		—		1,952		—		2,545		—		—		2,545
Repurchase of shares		—		—		—		—		—		(146)		—		(13,977)		—		(14,123)
Dividends declared		—		—		(7,203)		—		(7,203)		—		—		(8,995)		—		(8,995)
October 30, 2021	$	16,891	$	160,421	$	321,238	$	(3,081)	$	495,469
October 29, 2022											$	15,815	$	169,063	$	351,731	$	(3,570)	$	533,039
Comprehensive income		—		—		25,408		(391)		25,017		—		—		32,049		1,746		33,795
Shares issued under equity plans		5		401		—		—		406		5		332		—		—		337
Compensation expense for equity awards		—		2,334		—		—		2,334		—		2,780		—		—		2,780
Repurchase of shares		(91)		—		(8,268)		—		(8,359)		(46)		—		(4,824)		—		(4,870)
Dividends declared		—		—		(7,203)		—		(7,203)		—		—		(8,811)		—		(8,811)
January 29, 2022	$	16,805	$	163,156	$	331,175	$	(3,472)	$	507,664
January 28, 2023											$	15,774	$	172,175	$	370,145	$	(1,824)	$	556,270


	First Nine Months Fiscal 2022										First Half Fiscal 2023
	Common Stock		APIC		Retained Earnings		AOCI		Total		Common Stock		APIC		Retained Earnings		AOCI		Total
January 29, 2022	$	16,805	$	163,156	$	331,175	$	(3,472)	$	507,664
January 28, 2023											$	15,774	$	172,175	$	370,145	$	(1,824)	$	556,270
Comprehensive income		—		—		57,408		477		57,885		—		—		58,538		(604)		57,934
Shares issued under equity plans		5		387		—		—		392		6		596		—		—		602
Compensation expense for equity awards		—		2,725		—		—		2,725		—		3,259		—		—		3,259
Repurchase of shares		(526)		(3,131)		(42,375)		—		(46,032)		—		—		—		—		—
Dividends declared		—		—		(9,214)		—		(9,214)		—		—		(10,640)		—		(10,640)
April 30, 2022	$	16,284	$	163,137	$	336,994	$	(2,995)	$	513,420
April 29, 2023											$	15,780	$	176,030	$	418,043	$	(2,428)	$	607,425
Comprehensive income		—		—		56,612		(125)		56,487		—		—		51,453		319		51,772
Shares issued under equity plans		15		475		—		—		490		130		358		—		—		488
Compensation expense for equity awards		—		2,527		—		—		2,527		—		4,249		—		—		4,249
Repurchase of shares		(339)		—		(29,475)		—		(29,814)		(280)		(9,848)		(18,800)		—		(28,928)
Dividends declared		—		—		(9,094)		—		(9,094)		—		—		(10,377)		—		(10,377)
July 30, 2022	$	15,960	$	166,139	$	355,037	$	(3,120)	$	534,016
Comprehensive income		—		—		19,666		(450)		19,216
Shares issued under equity plans		1		379		—		—		380
Compensation expense for equity awards				2,545		—		—		2,545
Repurchase of shares		(146)		—		(13,977)		—		(14,123)
Dividends declared		—		—		(8,995)		—		(8,995)
October 29, 2022	$	15,815	$	169,063	$	351,731	$	(3,570)	$	533,039
July 29, 2023											$	15,630	$	170,789	$	440,319	$	(2,109)	$	624,629

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~~During the First Quarter of Fiscal 2022,~~Long-Term Stock Incentive Plan and Equity Compensation Expense

In recent years, we have granted ~~0.1 million~~a combination of service-based restricted share ~~units, subject to the recipient remaining an employee through the May 2025 vesting date. Additionally, during the First Quarter of Fiscal 2022, we granted 0.1 million~~awards and awards based on relative total shareholder ~~return-based (“TSR-based”~~return ("TSR") to certain select employees.

Service-Based Restricted Share Awards

The table below summarizes the service-based restricted share awards, including both restricted shares and restricted share units, ~~at target subject to (1) our achievement~~activity for the First Half of ~~a specified~~ Fiscal 2023:


	First Half Fiscal 2023
		Weighted-
	Number of	average
	Shares or	grant date
	Units	fair value
Awards outstanding at beginning of year	212,945	$	64
Awards granted	58,055	$	115
Awards vested, including awards repurchased from employees for employees’ tax liability	(111,095)	$	41
Awards forfeited	(1,070)	$	62
Awards outstanding on July 29, 2023	158,835	$	99

TSR-based ~~ranking by Oxford relative to a comparator group during a period of approximately three years from the date of grant and (2) the recipient remaining an employee through the May 2025 vesting date.~~ Restricted Share Units

The ~~number of shares ultimately earned for~~table below summarizes the TSR-based restricted share ~~units will be between 0% and 200% of the restricted share units~~unit activity at ~~target. Neither the service-based or TSR-based restricted share units are included in the table above as the awards are not outstanding shares.~~

~~Both the service-based and TSR-based restricted share units are entitled to dividend equivalents for dividends declared on our common stock during the vesting period, with the dividend equivalents~~target for the service-based restricted share units payable at the time of the payment of the respective dividend and the dividend equivalents for the TSR-based restricted share units payable after vesting of the restricted shares solely attributable to the number of shares actually earned. Neither the service-based or TSR-based restricted share units have any voting rights during the vesting period. Both the service-based and TSR-based restricted share units granted during the First ~~Quarter~~Half of Fiscal 2022 include certain clauses related to accelerated vesting upon the occurrence of qualifying retirement, death or disability of the employee prior to the vesting date. Our stock incentive plans are described in Note 8 to our consolidated financial statements included in our Fiscal 2021 Form 10-K.2023:


	First Half Fiscal 2023
		Weighted-
		average
	Number of	grant date
	Share Units	fair value
TSR-based awards outstanding at beginning of year	196,040	$	89
TSR-based awards granted	74,605	$	153
TSR-based restricted shares earned and vested, including restricted share units repurchased from employees for employees’ tax liability	(76,340)	$	50
TSR-based awards forfeited	—	$	—
TSR-based awards outstanding on July 29, 2023	194,305	$	129

7. Business Combinations: On September 19, 2022, we acquired ~~100% of the ownership interests in~~ JW Holdings, LLC and its subsidiaries (collectively “Johnny Was”) (the “Acquisition”). ~~Johnny Was owns~~We accounted for this transaction as a business combination, which generally requires that we record the Johnny Was California lifestyle brand and its related operations including the design, sourcing, marketing and distribution of collections of affordable luxury, artisan-inspired bohemian apparel, accessories and home goods. Johnny Was products are sold through the Johnny Was website and retail stores as well as select department stores and specialty stores. Information about the operating results of Johnny Was from the acquisition date through the end of the fiscal quarter are included in the operating group information included in Note 2.

The purchase price for the acquisition of Johnny Was totaled $270 million in cash, subject to adjustment based on net working capital as of the closing date of the acquisition. After giving effect to the preliminary estimated working capital adjustment, which we expect to finalize near the end of the fiscal year, the purchase price paid at closing was $271 million, includingassets acquired cash of $7 million. We used cash and short-term investments on hand and borrowings under our Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”) to fund the transaction. There are no contingent consideration arrangements associated with this transaction. Transaction and integration costs related to this acquisition, which primarily consist of representation and warranty insurance, integration costs, due diligence costs, legal fees and other costs, total approximately $3 million as of October 29, 2022 and are included in SG&A in our consolidated statements of operations in the First Nine Months of Fiscal 2022. These costs are included in Corporate and Other in Note 2. We may incur additional integration costs in future periods.

~~Our allocation of the purchase price to the estimated fair values of the acquired assets~~ and liabilities including intangible assets, customer relationships, operating lease amounts, property and equipment, working capital amounts and other amounts, is preliminary. The allocation of purchase price will be revised during the one year allocation period, as appropriate, as we obtain new information about theassumed at fair ~~values of these assets and liabilities~~value as of the acquisition date and finalize our valuation estimates. Changes in future periods to the amounts allocated to the various assets and liabilities could be material. The following table summarizes our preliminary allocation of the purchase price for the Johnny Was acquisition (in thousands):date.

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Johnny Was acquisition
Cash and cash equivalents

$
7,288
Receivables

10,258
Inventories ⁽¹⁾

23,283
Prepaid expenses

4,417
Property and equipment

21,212
Intangible assets

134,640
Goodwill

92,457
Operating lease assets

54,485
Other non-current assets

656
Accounts payable, accrued expenses and other liabilities

(30,743)
Non-current portion of operating lease liabilities

(47,009)
Purchase price

$
270,944

~~(1)~~

~~Includes a preliminary estimate for~~

The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total purchase consideration, are as follows (in thousands):


	Provisional Amounts at January 28, 2023		Measurement Period Adjustments		Provisional Amounts at July 29, 2023
Cash and cash equivalents	$	7,296	$	—	$	7,296
Receivables		8,777		—		8,777
Inventories		23,434		—		23,434
Prepaid expenses and other assets		6,353		—		6,353
Property and equipment		21,108		—		21,108
Intangible assets		134,640		—		134,640
Goodwill		96,637		1,403		98,040
Operating lease assets		54,859		—		54,859
Accounts payable, accrued expenses and other liabilities		(34,777)		920		(33,857)
Non-current portion of operating lease liabilities		(47,009)		—		(47,009)
Purchase price	$	271,318	$	2,323	$	273,641

As of July 29, 2023, we considered these amounts to be provisional because we were still in the process of reviewing information to support the valuations of the assets acquired and liabilities assumed. We made measurement-period adjustments, as shown in the table above, that increased the ~~step-up of acquired inventory from cost to fair value of $4 million pursuant to the purchase method of accounting. This step-up~~ amount of provisional goodwill by $1 million. We expect that goodwill will be recognized in cost of goods sold as the acquired inventory is sold, including $1 million recognized in our consolidated statement of operations in the Third Quarter of Fiscal 2022. The remainder of the step-up is expected to be recognized in the Fourth Quarter of Fiscal 2022.

~~Goodwill, which is expected~~ be deductible for ~~federal~~ income tax ~~purposes, represents the amount by which the cost to acquire Johnny Was exceeds the fair value of individual acquired assets less liabilities of the business at acquisition.~~ purposes.

Intangible assets allocated in connection with our preliminary purchase price allocation consisted of the following (in thousands):


		Johnny Was
	Useful life	acquisition
Finite lived intangible assets acquired, primarily consisting of customer relationships	8 - 13 years	$	56,740
Trade names and trademarks	Indefinite		77,900
		$	134,640

The ~~consolidated~~following unaudited pro forma information presented below (in thousands, except per share data) ~~gives effect to~~shows the ~~September 19,~~results of our operations for the Second Quarter of Fiscal 2022 and First Half of 2022 as if the acquisition of Johnny Was ~~as if the acquisition~~ had occurred ~~as of~~at the beginning of Fiscal 2021. The information presented below is for illustrative purposes only, is not indicative of results that would have been achieved if the acquisition had occurred as of ~~the beginning of Fiscal 2021~~that date and is not intended to be a projection of future results of operations. The ~~consolidated~~following unaudited pro forma information has been prepared from ~~the~~historical financial statements for Johnny Was and ~~our historical statements of operations~~us for the periods presented, including without limitation, purchase accounting adjustments, but excluding any seller specific management/advisory or similar expenses and any synergies or operating cost reductions that may be achieved from the combined operations in the future.


	Third Quarter				First Nine Months				Second Quarter Fiscal 2022				First Half Fiscal 2022
	Fiscal 2022		Fiscal 2021		Fiscal 2022		Fiscal 2021		Actual		Pro Forma		Actual		Pro Forma
Net sales	$	344,058	$	294,416	$	1,163,889	$	976,718	$	363,430	$	413,657	$	716,011	$	819,831
Earnings before income taxes	$	36,085	$	33,424	$	198,341	$	135,889	$	75,097	$	80,513	$	150,833	$	162,256
Net earnings	$	26,767	$	28,264	$	149,354	$	108,221	$	56,612	$	60,674	$	114,020	$	122,588
Earnings per share:
Basic	$	1.70	$	1.70	$	9.34	$	6.51	$	3.56	$	3.81	$	7.07	$	7.61
Diluted	$	1.66	$	1.68	$	9.14	$	6.43	$	3.49	$	3.74	$	6.94	$	7.46

8. Debt: On March 6, 2023, we entered into a Second Amendment to the Fourth Amended and Restated Credit Agreement (the “Revolving Credit Agreement”). The ~~Third Quarter~~Revolving Credit Agreement provides for a revolving credit facility of up to $325 million, which may be used to fund working capital, to fund future acquisitions and for general

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corporate purposes. The Revolving Credit Agreement amended and restated our Fourth Amended and Restated Credit Agreement (the “Prior Credit Agreement”). The Revolving Credit Agreement (1) extended the maturity of the facility from July 2024 to March 2028 and (2) modified certain provisions of the agreement. In other non-current assets, we capitalized debt issuance costs of $2 million in connection with commitments upon entering into the Revolving Credit Agreement.

Pursuant to the Revolving Credit Agreement, the interest rate applicable to our borrowings under the Revolving Credit Agreement are based on either the Term Secured Overnight Financing Rate plus an applicable margin of 135 to 185 basis points or prime plus an applicable margin of 25 to 75 basis points.

The 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 interest rate of 8% as of July 29, 2023), unused line fees and letter of credit fees based upon average utilization or unused availability, as applicable, (3) requires periodic interest payments with principal due at maturity and (4) is secured by a first priority security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal property.

We have issued standby letters of credit of $6 million in the aggregate under the Revolving Credit Agreement as of July 29, 2023. Outstanding letters of credit under the Revolving Credit Agreement reduce the amount of borrowings available to us.

As of July 29, 2023, we had $48 million of borrowings outstanding and $266 million in unused availability under the Revolving Credit Agreement. Under the Prior Credit Agreement as of January 28, 2023, and July 30, 2022, we had $119 million and $0 million of borrowings outstanding, and $199 million and $322 million of unused availability, respectively.

Compliance with Covenants

The 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 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 Revolving Credit Agreement contains a financial covenant that applies only if excess availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10% of availability. In such case, our fixed charge coverage ratio as defined in the 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 Revolving Credit Agreement of more than the greater of (1) $23.5 million or (2) 10% of availability for 30 consecutive days.

We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the Revolving Credit Agreement are customary for those included in similar facilities entered into at the time we amended the Revolving Credit Agreement. During Fiscal ~~2022~~2023 and as of July 29, 2023, no financial covenant testing was required pursuant to our Revolving Credit Agreement, or the ~~First Nine Months of Fiscal 2022,~~Prior Credit Agreement, as ~~well~~applicable, as the ~~Third Quarter~~minimum availability threshold was met at all times. As of ~~Fiscal 2021, pro forma information above includes amortization of acquired intangible assets, but excludes~~July 29, 2023, we were compliant with all applicable covenants related to the transaction expenses associated with the transaction and the incremental cost of goods sold associated with the step-up of inventory at acquisition that will be recognized by us in our Fiscal 2022 consolidated statement of operations. TheRevolving Credit Agreement.

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First Nine Months of Fiscal 2021 pro forma information above includes amortization of acquired intangible assets, transaction expenses and integration costs associated with the transaction and incremental cost of goods sold associated with the step-up of inventory at acquisition. Additionally, the pro forma adjustments for each period prior to the date of acquisition reflect an estimate of incremental interest expense associated with additional borrowings and income tax expense that would have been incurred subsequent to the acquisition.

We believe that the acquisition of Johnny Was further advances our strategic goal of owning a diversified portfolio of lifestyle brands. The acquisition provides strategic benefits through growth opportunities and further diversification of our business.

~~8. Debt:~~ As of October 29, 2022, January 29, 2022 and October 30, 2021, we had $130 million, $0 million and $0 million outstanding under our U.S. Revolving Credit Agreement, with the increase in borrowings primarily due to the acquisition of Johnny Was as discussed above. As of October 29, 2022, January 29, 2022 and October 30, 2021, we had $160 million, $322 million and $322 million in unused availability under the U.S. Revolving Credit Agreement, subject to certain limitations on borrowings. The details of our U.S. Revolving Credit Agreement, which matures in July 2024, are described in Note 5 to our consolidated financial statements included in our Fiscal 2021 Form 10-K.

9. Subsequent Event: ~~On November 14, 2022, we invested $8 million for a minority ownership interest in the Miramonte Resort & Spa in Indian Wells, California. The property will be converted into~~In August 2023, the Tommy Bahama ~~Miramonte Resort & Spa, with an anticipated completion date~~Marlin Bar in late 2023. A national commercial and hospitality real estate company and its subsidiaries are the property manager and development project manager. Additionally, we entered into a licensing agreement pursuant to which we will earn certain royalty payments basedLahaina, Hawaii on the ~~revenues~~island of ~~the~~Maui was destroyed by wildfires. We maintain property loss insurance coverage and expect to recover substantially all losses on inventory, property and equipment and other fire-related costs from insurance proceeds. Our other locations on Maui, including a Tommy Bahama ~~Miramonte Resort & Spa.~~

restaurant in Wailea, have also been negatively affected by the wildfires.

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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 Fiscal ~~2021~~2022 Form 10-K.

OVERVIEW

Business Overview

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

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

~~Tommy Bahama~~On September 19, 2022, we acquired Johnny Was. Johnny Was products are sold through the Johnny Was website and ~~Lilly Pulitzer,~~full-price retail stores and outlets as well as select department stores and specialty stores. We continue to execute acquisition and integration activities in connection with the ~~aggregate, represented 90% of our consolidated net sales~~Johnny Was acquisition, such as investing in ~~Fiscal 2021.~~ technology infrastructure, and streamlining corporate and operational support structures.

During Fiscal ~~2021,~~2022, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, ~~and~~ e-commerce websites and outlets, as well as our Tommy Bahama food and beverage ~~operations and Tommy Bahama outlets.~~operations. The remaining 20% of our net sales was generated through our wholesale distribution ~~channels. Our wholesale operations consist of net sales of products bearing our lifestyle brands,~~channels, which complement our direct to consumer operations and provide access to a larger base of consumers. Our wholesale operations consist of sales of products bearing the trademarks of our lifestyle brands to various specialty stores, better department stores, Signature Stores, multi-branded e-commerce retailers and other retailers.

For additional information about our business and our operating groups, ~~in Fiscal 2021,~~ see Part I, Item 1. Business of our Fiscal ~~2021~~2022 Form 10-K. Important factors relating to certain risks which could impact our business are described in Part ~~II, Item 1A. Risk Factors of this report and Part~~ I. Item 1A. Risk Factors of our Fiscal ~~2021~~2022 Form 10-K.

Industry ~~and Recent Macroeconomic Conditions~~ Overview

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

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categories. Further, negative economic conditions often have a longer and more severe impact on the apparel industry than on other ~~industries.~~industries due, in part, to apparel purchases often being more of a discretionary purchase.

This competitive and evolving environment requires that brands and retailers approach their operations, including marketing and advertising, very differently than ~~historical practices~~they have historically and may result in increased operating costs and investments to generate growth or even maintain existing sales levels. While the competition and evolution present significant

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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 lifestyle brands have true competitive advantages, and we continue to invest in and leverage 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.~~industry in the current environment.

The ~~COVID-19 pandemic has had~~current macroenvironment, with heightened concerns about inflation, a ~~significant effect on overall~~global economic ~~conditions and our operations in recent years and accelerated or exacerbated many~~recession, geopolitical issues, the stability of the ~~changes in~~U.S. banking system, the ~~industry. In Fiscal 2021, the economic environment improved significantly with a rebound in retail traffic starting in March 2021~~availability and ~~other improvements as the year progressed, although certain stores were closed for portions~~cost of ~~Fiscal 2021, particularly in the First Quarter of Fiscal 2021. This exceptionally strong consumer demand, along with the strength of our brands, resulted in record earnings for us during Fiscal 2021~~credit and the First Nine Months of Fiscal 2022. The strong earnings in recent periods are despite certain challenges in the retail apparel market, including labor shortages, supply chain disruptions and product and operating costcontinued increases in ~~Fiscal 2021 and Fiscal 2022. We, as well as others~~interest rates, combined with heightened promotional activity in our industry, ~~have increased prices~~is creating a complex and challenging retail environment, which may impact our businesses and exacerbate some of the inherent challenges to ~~attempt to offset inflationary pressures.~~

~~There can be no assurance that the strong consumer demand of Fiscal 2021 and Fiscal 2022 will continue for~~ our ~~business or the broader retail apparel market.~~operations. There remains significant uncertainty in the macroeconomic environment, ~~as to~~and the impact of ~~changing consumer discretionary spending habits, recent supply chain~~these and other business disruptions, ongoing operating cost increase and other inflationary pressures, rising interest rates, the duration and severity of the pandemic and general economic conditions. Thus, the ultimate impact of these itemsfactors could have a major effect on our ~~business remains uncertain at this time.~~

~~Johnny Was Acquisition~~

On September 19, 2022, we acquired the Johnny Was California lifestyle brand and related operations, which includes the design, sourcing, marketing and distribution of collections of affordable luxury, artisan-inspired bohemian apparel, accessories and home goods. Johnny Was products are sold through the Johnny Was website and retail stores as well as select department stores and specialty stores.

In the 12 months ended October 29, 2022, the Johnny Was business generated approximately $209 million of net sales. On an annual basis, we anticipate that gross margins, excluding the impact of any inventory step-up charges related to purchase accounting, will be approximately 65% and earnings before interest and taxes, excluding the impact of any inventory step-up charges and amortization of intangible assets, which have not been finalized at this time as we have not completed our assessment and allocation of fair value of the acquired assets and liabilities, will be in the mid to high teen percentage of net sales. We expect that the business will continue to grow as each channel of distribution grows. During the 12 months ended October 2022, e-commerce, retail and wholesale represented 41%, 34% and 25%, respectively, of the net sales of Johnny Was.

The financial information included in the results of operations discussion below for the Third Quarter of Fiscal 2022 and the First Nine Months of Fiscal 2022, includes the six weeks from the September 19, 2022 acquisition through the October 29, 2022 quarter end only. Therefore, the amounts included in the results of operations below are not indicative of results for a full quarter or a nine month period.

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~~Lanier Apparel Exit~~

In Fiscal 2021, we exited our Lanier Apparel business, a business which had been focused on moderately priced tailored clothing and related products. This decision aligns with our stated business strategy of developing and marketing compelling lifestyle brands. It also took into consideration the increased macroeconomic challenges faced by the Lanier Apparel business, many of which were magnified by the COVID-19 pandemic. The operating results of the Lanier Apparel business in Fiscal 2021 largely reflect activities associated with the ongoing wind down of operations following the 2020 announcement that we would be exiting the business. In Fiscal 2021, Lanier Apparel’s net sales were $25 million and represented 2% of our consolidated net sales. We do not expect any future net sales, operations or charges for Lanier Apparel. Refer to Note 11 in our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2021 Form 10-K for additional information about the Lanier Apparel exit.businesses.

Key Operating Results:

The following table sets forth our consolidated operating results (in thousands, except per share amounts) for the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 compared to the First ~~Nine Months~~Half of Fiscal ~~2021:~~2022:


	First Nine Months				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Net sales	$	1,029,044	$	842,163	$	840,416	$	716,011
Operating income	$	178,664	$	133,496	$	147,975	$	151,349
Net earnings	$	133,686	$	105,913	$	109,991	$	114,020
Net earnings per diluted share	$	8.19	$	6.29	$	6.86	$	6.94
Weighted average shares outstanding - diluted		16,333		16,841		16,025		16,430

Net earnings per diluted share were ~~$8.19~~$6.86 in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 compared to ~~$6.29~~$6.94 in the First ~~Nine Months~~Half of Fiscal ~~2021.~~2022. The ~~30% increase~~1% decrease in net earnings per diluted share ~~was primarily due to~~included a ~~26% increase~~4% decrease in net earnings as well as a 3%2% reduction in weighted average shares outstanding due to ~~our~~open market share ~~repurchase program which commenced~~repurchases in ~~the Fourth Quarter of~~ Fiscal ~~2021.~~2023 and Fiscal 2022. The ~~higher~~decreased net earnings were primarily due to ~~higher~~(1) lower operating income inat Tommy Bahama, Lilly Pulitzer, and Emerging Brands and (2) increased interest expense. These decreases were partially offset by (1) the ~~First Nine Months~~inclusion of ~~Fiscal 2021 including a $12 million gain on sale~~the operating income of ~~investment in an unconsolidated entity and (2) a higher effective tax rate~~Johnny Was in the First ~~Nine Months~~Half of ~~Fiscal 2022.~~2023, (2) a lower operating loss at Corporate and Other and (3) a lower effective tax rate.

COMPARABLE SALES

We often disclose comparable sales to provide additional information regarding changes in our results of operations between periods. Our disclosures of comparable sales include net sales from our full-price retail stores and e-commerce sites, 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 channels. For our comparable sales disclosures, we exclude (1) outlet store sales and e-commerce flash clearance sales, as those clearance sales are used primarily to liquidate end of season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally occur at lower gross margins than our non-clearance direct to consumer sales, and (2) food and beverage sales, as we do not currently believe that the inclusion of food and beverage sales in our comparable sales disclosures is meaningful in

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assessing our branded apparel businesses. Comparable sales information reflects net sales, including shipping and handling revenues, if any, associated with product sales.

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

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

~~STORE COUNT~~DIRECT TO CONSUMER LOCATIONS

The table below provides information about the number of direct to consumer locations for our brands as of the dates specified. For ~~acquired brands,~~Johnny Was, locations are only included subsequent to the date of acquisition. The amounts below include our permanent locations and exclude any pop-up or temporary store locations which have an initial lease term of 12 months or less.

October 29,

January 29,

October 30,

January 30,


2022

2022

2021

2021
Tommy Bahama retail stores

102

102

103

105
Tommy Bahama retail-restaurant locations

21

21

21

20
Tommy Bahama outlets

35

35

35

35
Total Tommy Bahama locations

158

158

159

160
Lilly Pulitzer retail stores

59

58

59

59
Johnny Was retail stores

64

—

—

—
Johnny Was outlets

2

—

—

—
Total Johnny Was locations

66

—

—

—
Southern Tide retail stores

5

4

4

3
TBBC retail stores

2

1

—

—
Total Oxford locations

290

221

222

222

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On September 28, 2022, Hurricane Ian made landfall in Southwest Florida. The hurricane resulted in store closures at many of our Florida direct to consumer locations for a few days that week and caused significant property damage across the region. Substantially all of our direct to consumer locations returned to normal operating hours shortly after the hurricane. However, two of our locations in Naples, Florida, including a retail-restaurant location, suffered significantly greater damage as a result of the hurricane, resulting in those locations being closed for a longer period. Both of these locations reopened in November 2022. We estimate that the impact of the hurricane on our net sales during the Third Quarter of Fiscal 2022 was approximately $3 million. While all of our direct to consumer locations have reopened, due to the significant damage to the region and the potential impact on tourism, consumer demand and retail traffic, there remains uncertainty about the ultimate impact of Hurricane Ian on our business during the next few months.


	July 29,	January 28,	July 30,	January 29,
	2023	2023	2022	2022
Tommy Bahama full-price retail stores	101	103	102	102
Tommy Bahama retail-food & beverage locations	22	21	21	21
Tommy Bahama outlets	33	33	35	35
Total Tommy Bahama locations	156	157	158	158
Lilly Pulitzer full-price retail stores	59	59	58	58
Johnny Was full-price retail stores	67	65	—	—
Johnny Was outlets	2	2	—	—
Total Johnny Was locations	69	67	—	—
Southern Tide full-price retail stores	13	6	5	4
TBBC full-price retail stores	3	3	2	1
Total Oxford direct to consumer locations	300	292	223	221

RESULTS OF OPERATIONS

~~THIRD~~SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO ~~THIRD~~SECOND QUARTER OF FISCAL ~~2021~~2022

The discussion and tables below compare our statements of operations for the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 to the ~~Third~~Second Quarter of Fiscal ~~2021.~~2022. Each dollar and percentage change provided reflects the change between these fiscal periods unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share amounts. We have calculated all percentages based on actual data, and percentage columns in tables may not add due to rounding. Individual line items of our consolidated statements of operations, including gross profit, may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company.

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change as compared to the same period of the prior year. The table also includes net earnings per diluted share and diluted weighted average shares outstanding (in thousands), as well as the change and the percentage change for each of these items as compared to the same period of the prior year.


	Third Quarter												Second Quarter
	Fiscal 2022				Fiscal 2021				$ Change		% Change		Fiscal 2023				Fiscal 2022				$ Change		% Change

Net sales	$	313,033	100.0	%	$	247,729	100.0	%	$	65,304	26.4	%	$	420,319	100.0	%	$	363,430	100.0	%	$	56,889	15.7	%
Cost of goods sold		115,339	36.8	%		95,191	38.4	%		20,148	21.2	%		151,590	36.1	%		131,281	36.1	%		20,309	15.5	%
Gross profit	$	197,694	63.2	%	$	152,538	61.6	%	$	45,156	29.6	%	$	268,729	63.9	%	$	232,149	63.9	%	$	36,580	15.8	%
SG&A		175,027	55.9	%		137,505	55.5	%		37,522	27.3	%		205,231	48.8	%		163,135	44.9	%		42,096	25.8	%
Royalties and other operating income		4,648	1.5	%		15,574	6.3	%		(10,926)	(70.2)	%		4,176	1.0	%		6,357	1.7	%		(2,181)	(34.3)	%
Operating income	$	27,315	8.7	%	$	30,607	12.4	%	$	(3,292)	(10.8)	%	$	67,674	16.1	%	$	75,371	20.7	%	$	(7,697)	(10.2)	%
Interest expense, net		698	0.2	%		222	0.1	%		476	214.4	%		1,297	0.3	%		274	0.1	%		1,023	373.4	%
Earnings before income taxes	$	26,617	8.5	%	$	30,385	12.3	%	$	(3,768)	(12.4)	%	$	66,377	15.8	%	$	75,097	20.7	%	$	(8,720)	(11.6)	%
Income tax expense		6,951	2.2	%		4,400	1.8	%		2,551	58.0	%		14,924	3.6	%		18,485	5.1	%		(3,561)	(19.3)	%
Net earnings	$	19,666	6.3	%	$	25,985	10.5	%	$	(6,319)	(24.3)	%	$	51,453	12.2	%	$	56,612	15.6	%	$	(5,159)	(9.1)	%
Net earnings per diluted share	$	1.22			$	1.54			$	(0.32)	(20.8)	%	$	3.22			$	3.49			$	(0.27)	(7.7)	%
Weighted average shares outstanding - diluted		16,139				16,872				(733)	(4.3)	%		15,979				16,238				(259)	(1.6)	%

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Net Sales


	Third Quarter								Second Quarter
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Tommy Bahama	$	178,645	$	148,454	$	30,191	20.3	%	$	245,443	$	243,965	$	1,478	0.6	%
Lilly Pulitzer		84,053		72,157		11,896	16.5	%		91,349		88,665		2,684	3.0	%
Johnny Was		22,661		—		22,661	100.0	%		52,023		—		52,023	100.0	%
Emerging Brands		26,912		22,082		4,830	21.9	%		31,580		29,913		1,667	5.6	%
Lanier Apparel		—		4,232		(4,232)	(100.0)	%
Corporate and Other		762		804		(42)	(5.2)	%		(76)		887		(963)	(108.6)	%
Consolidated net sales	$	313,033	$	247,729	$	65,304	26.4	%	$	420,319	$	363,430	$	56,889	15.7	%

Consolidated net sales were ~~$313~~$420 million in the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 compared to net sales of ~~$248~~$363 million in the ~~Third~~Second Quarter of Fiscal ~~2021, with an increase in each brand and channel of distribution.~~2022. The ~~26%~~16% increase in net sales included ~~double-digit percentage increases~~(1) $52 million in ~~each of our Tommy Bahama, Lilly Pulitzer and Emerging Brands operating groups as well as $23 million of~~ sales for Johnny Was, which was acquired during the Third Quarter of Fiscal ~~2022. These~~2022, and (2) increases ~~were partially offset by a $4 million decrease~~ in sales for Lanier Apparel, which we exited in Fiscal 2021. The higher net sales were due to a combination of increased volume as well as price increases, which were implemented in order to mitigate increased product and other costs. The Third Quarter of Fiscal 2022 included the unfavorable impact of Hurricane Ian in Southwest Florida, which we estimate reduced our net sales by approximately $3 million.each operating group.

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

●

an increase in full-price ~~retail~~e-commerce sales of ~~$18~~$17 million, or ~~22%~~15%, including (1) $22 million of e-commerce sales in Johnny Was, (2) a ~~12% aggregate~~$2 million increase ~~in full-price retail sales~~ in Tommy Bahama ~~Lilly Pulitzer~~ and (3) a $1 million increase in Emerging ~~Brands driven primarily by increased consumer traffic and average dollars per transaction~~Brands. These increases were partially offset by ~~lower conversion rates, and (2)~~an $8 million decrease in Lilly Pulitzer;

●

an increase in Lilly Pulitzer e-commerce flash clearance sales of ~~full-price retail~~$16 million with no similar e-commerce flash clearance sales in ~~Johnny Was;~~the Second Quarter of Fiscal 2022;

●

an increase in full-price ~~e-commerce~~retail sales of ~~$17~~$15 million, or ~~26%~~11%, including (1) $9$18 million of ~~full-price e-commerce~~retail sales in Johnny Was and (2) a ~~12% aggregate~~$2 million increase in ~~e-commerce sales~~Emerging Brands as we opened new retail locations. These increases were partially offset by (1) a $3 million decrease in Tommy Bahama and (2) a $3 million decrease in Lilly Pulitzer;

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●

an increase in wholesale sales of $6 million, or 9%, including $10 million of wholesale sales in Johnny Was. This increase was partially offset by (1) a $3 million decrease in Lilly Pulitzer and (2) a $2 million decrease in Emerging Brands;

●

an increase in ~~wholesale~~food and beverage sales of ~~$17~~$2 million, or 32%, with this increase primarily due to higher order books as wholesale accounts increased their buys for Fiscal 2022 compared to Fiscal 2021, with $5 million of wholesale sales for Johnny Was in the Third Quarter of Fiscal 2022 largely offset by $4 million of wholesale sales for Lanier Apparel in the Third Quarter of Fiscal 2021;

●

~~an increase in e-commerce flash clearance sales of $9 million, or 45%;~~

●

~~an increase in restaurant sales of $3 million, or 17%~~8%; and

●

an increase in outlet sales of $2 million, or ~~15%.~~9%, primarily due to the addition of Johnny Was.

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


	Third Quarter				Second Quarter
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Retail	36	%	37	%	41	%	42	%
E-commerce	34	%	33	%	36	%	33	%
Restaurant	7	%	8	%
Food & beverage					7	%	8	%
Wholesale	22	%	21	%	16	%	17	%
Total	100	%	100	%	100	%	100	%

Tommy Bahama:

Tommy Bahama net sales increased ~~$30~~$1 million, or ~~20%~~1%, in the ~~Third~~Second Quarter of Fiscal ~~2022,~~2023, with an increase in ~~each channel of distribution. The increase in net sales in Tommy Bahama included increases in~~ (1) ~~wholesale~~food and beverage sales of ~~$14~~$2 million, or ~~53%~~8%, ~~with this increase primarily due to higher order books as~~(2) e-commerce sales of $2 million, or 2%, and (3) wholesale ~~accounts increased their buys for Fiscal 2022 compared to Fiscal 2021, (2)~~sales. These increases were partially offset by a decrease in full-price retail ~~sales of $8 million, or 14%, (3) restaurant~~ sales of $3 million, or 17%, with high single-digit percentage increases in locations open the full quarter of both periods as well as increased sales at the New York and Palm Desert locations, which were not open the full quarter in the Third Quarter of Fiscal 2021, (4) e-commerce sales of $3 million, or 9%, and (5) outlet sales of $2 million, or 14%3%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:


	Third Quarter				Second Quarter
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Retail	44	%	47	%	46	%	48	%
E-commerce	20	%	22	%	28	%	28	%
Restaurant	13	%	13	%
Food & beverage					12	%	11	%
Wholesale	23	%	18	%	14	%	13	%
Total	100	%	100	%	100	%	100	%

Lilly Pulitzer:

Lilly Pulitzer net sales increased ~~$12~~$3 million, or ~~16%~~3%, in the ~~Third~~Second Quarter of Fiscal ~~2022, with~~2023. The increase was primarily driven by an increase in ~~each channel~~e-commerce sales of ~~distribution. The~~$8 million, or 22%, including an increase in ~~net~~e-commerce flash sales of $16 million, with no e-commerce flash sales in ~~Lilly Pulitzer included increases~~the Second Quarter of 2022, and a decrease in full-price e-commerce sales of $8 million, or 21%. This increase was partially offset by decreases in (1) ~~e-commerce flash clearance~~retail sales of $9$3 million, or ~~45%~~8%, ~~as Lilly Pulitzer had increased levels of inventory available for the e-commerce flash clearance sales in Fiscal 2022 after having more limited end of season inventory in Fiscal 2021,~~and (2) wholesale sales of $1$3 million, or ~~16%, (3) full-price e-commerce sales of $1 million, or 5%, and (4) retail sales of $1 million, or 4%~~19%. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:


	Third Quarter				Second Quarter
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Retail	27	%	31	%	36	%	40	%
E-commerce	62	%	58	%	50	%	43	%
Wholesale	11	%	11	%	14	%	17	%
Total	100	%	100	%	100	%	100	%

~~Johnny Was:~~

Johnny Was net sales were $23 million in the six weeks following the September 19, 2022 acquisition through the end of the quarter. During the six-week period, e-commerce, retail and wholesale sales were 41%, 38% and 21% of the net sales of Johnny Was. As the net sales are for less than half the fiscal quarter, the percentage of net sales by

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~~distribution channel are not indicative~~Johnny Was:

Johnny Was net sales were $52 million during the Second Quarter of Fiscal 2023. The following table presents the proportion of net sales by distribution channel for Johnny Was for the ~~full Third~~Second Quarter of Fiscal ~~2022 or any other fiscal quarter.~~2023:


	Second Quarter
	Fiscal 2023		Fiscal 2022
Retail	38	%	—	%
E-commerce	43	%	—	%
Wholesale	19	%	—	%
Total	100	%	—	%

Emerging Brands:

Emerging Brands net sales increased $5$2 million, or ~~22%~~6%, in the ~~Third~~Second Quarter of Fiscal 2022, with an increase in each of the TBBC, Duck Head and Southern Tide businesses comprising Emerging Brands. By brand, the increase in net sales included increases in (1) TBBC of $4 million, or 50%, (2) Duck Head of $1 million, or 57%, and (3) Southern Tide of $0 million, or 2%.2023. By distribution channel, the $5$2 million increase included increases of (1) $3$2 million, or ~~44%~~89%, in ~~e-commerce,~~retail sales as we opened new retail locations and (2) $1 million, or 8%10%, in ~~wholesale, and (3) $0~~e-commerce sales. These increases were partially offset by a $2 million, or ~~46%~~11%, decrease in wholesale sales that includes the impact of the acquisition and conversion of three former Southern Tide ~~and TBBC~~Signature Store operations to company owned retail ~~businesses, as those brands continue to open new retail locations.~~stores. The following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:


	Third Quarter				Second Quarter
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Retail	5	%	4	%	12	%	7	%
E-commerce	40	%	34	%	48	%	46	%
Wholesale	55	%	62	%	40	%	47	%
Total	100	%	100	%	100	%	100	%

~~Lanier Apparel:~~

~~There were no Lanier Apparel net sales in the Third Quarter of Fiscal 2022, compared to $4 million of net sales in the Third Quarter of Fiscal 2021.~~

Corporate and Other:

Corporate and Other net sales primarily consist of net sales of our Lyons, Georgia distribution center business, ~~as well as~~ our Oxford America business, which we exited in Fiscal ~~2022.~~2022, and the elimination of any sales between operating groups.

Gross Profit

The tables below present gross profit by operating group and in total for the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 and the ~~Third~~Second Quarter of Fiscal ~~2021,~~2022, as well as the dollar change and percentage change between those two periods, and gross margin by operating group and in total. Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company.


	Third Quarter								Second Quarter
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Tommy Bahama	$	115,641	$	91,773	$	23,868	26.0	%	$	155,294	$	156,796	$	(1,502)	(1.0)	%
Lilly Pulitzer		52,993		48,668		4,325	8.9	%		63,099		63,320		(221)	(0.3)	%
Johnny Was		14,597		—		14,597	100.0	%		35,922		—		35,922	100.0	%
Emerging Brands		13,426		11,770		1,656	14.1	%		15,793		14,127		1,666	11.8	%
Lanier Apparel		—		2,195		(2,195)	(100.0)	%
Corporate and Other		1,037		(1,868)		2,905	NM	%		(1,379)		(2,094)		715	NM	%
Consolidated gross profit	$	197,694	$	152,538	$	45,156	29.6	%	$	268,729	$	232,149	$	36,580	15.8	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	(650)	$	2,197					$	1,432	$	2,733
Inventory step-up charge included in Johnny Was	$	1,376	$	—
Lanier Apparel exit charges in cost of goods sold	$	—	$	(684)

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	Third Quarter				Second Quarter
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Tommy Bahama	64.7	%	61.8	%	63.3	%	64.3	%
Lilly Pulitzer	63.0	%	67.4	%	69.1	%	71.4	%
Johnny Was	64.4	%	—	%	69.1	%	—	%
Emerging Brands	49.9	%	53.3	%	50.0	%	47.2	%
Lanier Apparel	—	%	51.9	%
Corporate and Other	NM	%	NM	%	NM	%	NM	%
Consolidated gross margin	63.2	%	61.6	%	63.9	%	63.9	%

The increased gross profit of ~~30%~~16% was primarily due to the ~~26%~~16% increase in net ~~sales as well as increased consolidated gross margin.~~sales. The ~~higher~~comparable gross margin included (1) ~~lower freight costs~~increased e-commerce flash clearance sales in Lilly Pulitzer and (2) increased sales during the loyalty award, Flip Side marketing, and end of ~~$5 million, or 175 basis points, after incurring $6 million, or 270 basis points~~season clearance events in Tommy Bahama. These decreases were partially offset by (1) the 69.1% gross margin of ~~incremental freight costs in the Third Quarter of Fiscal 2021,~~Johnny Was, (2) a $3$1 million lower LIFO accounting charge in the ~~Third~~Second Quarter of Fiscal 2023 compared to the Second Quarter of Fiscal 2022, ~~compared to the Third Quarter of Fiscal 2021,~~ (3) improved initial product margins, as certain sales prices were increased more than the increased product costs, and (4) the lack of any Lanier Apparel sales, which had lower gross margins than our branded businesses. These items were partially offset by (1) the impact of the Lilly Pulitzer e-commerce flash sale, which represented a larger proportion of net sales and had lower gross margins in the Third Quarter of Fiscal 2022, (2) the $1 million inventory step up charge related to the Johnny Was acquisition in the Third Quarter of Fiscal 2022, and (3) the lack of a favorable adjustment of Lanier Apparel exit charges in cost of goods sold after a $1 million favorable adjustment of Lanier Apparel exit charges in cost of goods sold in the Third Quarter of Fiscal 2021.

In the Third Quarter of Fiscal 2021, freight costs increased significantly from prior periods, including rate increases for both ocean and air shipments as well as the increased utilization of air freight on inbound products as we navigated our need for inventory and the supply chain challenges. The increased inbound freight rates, which have moderated somewhat from the peak, have continued into Fiscal 2022. However, our use of air freight has decreased as we have placed seasonal inventory purchases on an earlier timeline to reduce the risk of late delivery of our products. These factors resulted in a significant negative impact on our gross margin during the Second Half of Fiscal 2021, but not as significant of a negative impact on ourhigher gross margin in ~~the Second Half of Fiscal 2022. In Fiscal 2022~~Emerging Brands resulting from lower inventory markdowns and (4) lower freight ~~costs are still elevated by approximately 50 to 100 basis points as compared to pre-pandemic levels.~~costs.

Tommy Bahama:

The ~~higher~~lower gross margin for Tommy Bahama was primarily due to an increased proportion of direct to consumer sales occurring during periodic loyalty award, Flip Side marketing and end of season clearance events. This decrease was partially offset by (1) reduced freight costs ~~in the Third Quarter of Fiscal 2022, after significantly higher freight costs were incurred in the Third Quarter of Fiscal 2021, as well as improved initial product~~and (2) increased food and beverage gross margins. ~~These items were partially offset by a change in sales mix with wholesale sales representing a higher proportion of net sales in the Third Quarter of Fiscal 2022.~~

Lilly Pulitzer:

The lower gross margin for Lilly Pulitzer was primarily due to ~~(1)~~ a change in sales mix with e-commerce flash clearance sales ~~which typically have gross margins in the low 40% range,~~ representing a larger proportion of net ~~sales and (2) lower gross margins on the~~sales. There were no e-commerce flash ~~clearance~~ sales ~~as the gross margin achieved~~ in the ~~Third~~Second Quarter of Fiscal ~~2021 was higher than typical due to less end of season inventory available in Fiscal 2021.~~2022. This decrease was partially offset by (1) lower freight costs and ~~improved initial product margins.~~(2) a change in sales mix with wholesale sales representing a lower proportion of Lilly Pulitzer net sales.

Johnny Was:

~~The Johnny Was gross profit and gross~~

Gross margin for the six weeks following the September 19, 2022 acquisition through the end of the quarter was unfavorably impacted by the $1 million of incremental cost of goods sold resulting from the charge related to the step up of inventory to fair value at acquisition. Thus, we do not believe the gross profit or gross margin is indicative of the gross profit or gross margin for the ThirdSecond Quarter of Fiscal 2022 or any other fiscal quarter for Johnny Was. On an annual basis, with no impact of inventory step-up charges, Johnny Was gross margins have historically been and are expected to be approximately 65%, after conforming to our accounting policy of classifying outbound freight charges in cost of goods sold rather than SG&A.2023 was 69.1%.

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Emerging Brands:

The ~~lower~~higher gross margin for Emerging Brands was primarily due to ~~more~~(1) lower inventory markdowns and ~~increased freight costs partially offset by~~(2) a change in sales mix with direct to consumer sales representing a ~~greater~~larger proportion of net sales.

~~Lanier Apparel:~~

~~There was no~~ These increases were partially offset by lower gross ~~profit for Lanier Apparel in the Third Quarter~~margin on wholesale sales due to off-price wholesale sales of ~~Fiscal 2022. The Third Quarter~~previously marked down inventory representing a greater proportion of ~~Fiscal 2021 for Lanier Apparel included the gross profit impact of net sales as we were exiting the business, as well as a reduction in inventory markdowns associated with the exit of Lanier Apparel.~~wholesale sales.

Corporate and Other:

The gross profit in Corporate and Other primarily reflects the impact of LIFO accounting adjustments, which was a $1 million charge in the Second Quarter of Fiscal 2023 and $3 million in the Second Quarter of Fiscal 2022, and the gross profit of the Lyons, Georgia distribution center and Oxford America businesses. ~~The primary driver for the improved gross profit was the $3 million lower LIFO accounting charge.~~ The LIFO accounting impact in Corporate and Other in each period includes the net impact of (1) a charge in Corporate and Other when inventory that had been marked down in an operating group in a prior period was ultimately sold, (2) a credit in Corporate and Other when inventory had been marked down in an operating group in the current period, but had not been sold as of period end and (3) the change in the LIFO reserve, if any.

Table of Contents

SG&A


	Third Quarter										Second Quarter
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
SG&A	$	175,027		$	137,505		$	37,522	27.3	%	$	205,231		$	163,135		$	42,096	25.8	%
SG&A (as a % of net sales)		55.9	%		55.5	%						48.8	%		44.9	%
Notable items included in amounts above:
Tommy Bahama lease termination charge	$	—		$	4,850
Amortization of Johnny Was intangible assets	$	1,641		$	—						$	3,463		$	—
TBBC change in fair value of contingent consideration	$	—		$	786
Lanier Apparel exit charges in SG&A	$	—		$	559
Transaction expenses and integration costs associated with the Johnny Was acquisition included in Corporate and Other	$	2,783		$	—

SG&A was ~~$175~~$205 million in the ~~Third~~Second Quarter of Fiscal 2023 compared to $163 million in the Second Quarter of Fiscal 2022, ~~compared to SG&A of $138 million in the Third Quarter of Fiscal 2021,~~ with approximately ~~$14~~$32 million, or 76%, of the increase due to the SG&A of Johnny Was. The ~~27%~~26% increase in total SG&A in the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 included the following, each of which ~~reflects increases due to~~includes the ~~acquisition~~SG&A of Johnny Was: (1) increased employment costs of ~~$17~~$12 million, primarily due to increased head count, pay rate increases and other employment cost increases, ~~particularly~~including in our direct to consumer and distribution center operations partially offset by lower incentive compensation amounts, (2) a $7$9 million increase in advertising expense, (3) a $5$6 million increase in occupancy expenses, (4) a $6 million increase in variable expenses related to higher sales, including credit card transaction fees, supplies, commissions, royalties and other expenses, ~~(4)~~(5) a $5 million increase in occupancy expenses, including increases in base rent amounts, percentage rent, occupancy related operating costs and other items, (5) $3 million of charges related to transaction expenses and integration costs associated with the Johnny Was acquisition, (6) a $3 million increase in administrative expenses including professional fees, travel and other items, ~~(7)~~(6) a $2$3 million increase in amortization of intangible assets and ~~(8)~~(7) a $1 million increase in depreciation expense. These items were partially offset by the absence of $5 million of Tommy Bahama lease termination charges, $1 million of TBBC change in fair value of contingent consideration and $1 million of Lanier Apparel exit charges in the Third Quarter of Fiscal 2022.

~~Table of Contents~~

Royalties and other operating income


	Third Quarter								Second Quarter
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Royalties and other operating income	$	4,648	$	15,574	$	(10,926)	(70.2)	%	$	4,176	$	6,357	$	(2,181)	(34.3)	%
Notable items included in amounts above:
Gain on sale of investment in unconsolidated entity	$	—	$	(11,586)

Royalties and other operating income typically consists primarily of income received from third parties from the licensing of our ~~brands, but~~brands. The decreased royalties and other operating income in the ~~Third~~Second Quarter of Fiscal ~~2021 also included a $12 million gain on sale of investment in unconsolidated entity. Royalty income in the Third Quarter of Fiscal 2022 increased~~2023 was primarily due to ~~increased~~decreased royalty income in ~~both~~ Tommy Bahama ~~and Lilly Pulitzer.~~reflecting the lower sales of our licensing partners.

Operating income (loss)


	Third Quarter								Second Quarter
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Tommy Bahama	$	18,984	$	5,531	$	13,453	243.2	%	$	51,037	$	58,918	$	(7,881)	(13.4)	%
Lilly Pulitzer		12,688		15,985		(3,297)	(20.6)	%		18,566		21,492		(2,926)	(13.6)	%
Johnny Was		117		—		117	100.0	%		3,847		—		3,847	100.0	%
Emerging Brands		3,729		4,103		(374)	(9.1)	%		3,028		3,991		(963)	(24.1)	%
Lanier Apparel		—		348		(348)	(100.0)	%
Corporate and Other		(8,203)		4,640		(12,843)	NM	%		(8,804)		(9,030)		226	NM	%
Consolidated operating income	$	27,315	$	30,607	$	(3,292)	(10.8)	%	$	67,674	$	75,371	$	(7,697)	(10.2)	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	(650)	$	2,197					$	1,432	$	2,733
Inventory step-up charge included in Johnny Was	$	1,376	$	—
Lanier Apparel exit charges in cost of goods sold	$	—	$	(684)
Tommy Bahama lease termination charge	$	—	$	4,850
Amortization of Johnny Was intangible assets	$	1,641	$	—					$	3,463	$	—
TBBC change in fair value of contingent consideration	$	—	$	786
Lanier Apparel exit charges in SG&A	$	—	$	559
Transaction expenses and integration costs associated with the Johnny Was acquisition included in Corporate and Other	$	2,783	$	—
Gain on sale of investment in unconsolidated entity	$	—	$	(11,586)

Operating income was ~~$27~~$68 million in the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 compared to ~~$31~~$75 million in the ~~Third~~Second Quarter of Fiscal ~~2021.~~2022. The decreased operating income ~~was primarily due to the Third Quarter of Fiscal 2021 including a gain on sale of an investment in an unconsolidated entity, with no such gain in the Third Quarter of Fiscal 2022, and~~included lower operating income in Tommy Bahama, Lilly ~~Pulitzer.~~Pulitzer, and Emerging Brands. These ~~items~~decreases were partially offset by ~~higher~~(1) the operating income of Johnny Was and (2) a lower operating loss in ~~Tommy Bahama.~~Corporate and Other. Changes in operating income (loss) by operating group are discussed below.

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Tommy Bahama:


	Third Quarter										Second Quarter
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	178,645		$	148,454		$	30,191	20.3	%	$	245,443		$	243,965		$	1,478	0.6	%
Gross profit	$	115,641		$	91,773		$	23,868	26.0	%	$	155,294		$	156,796		$	(1,502)	(1.0)	%
Gross margin		64.7	%		61.8	%						63.3	%		64.3	%
Operating income	$	18,984		$	5,531		$	13,453	243.2	%	$	51,037		$	58,918		$	(7,881)	(13.4)	%
Operating income as % of net sales		10.6	%		3.7	%						20.8	%		24.2	%
Notable items included in amounts above:
Tommy Bahama lease termination charge	$	—		$	4,850

The ~~increased~~decreased operating income for Tommy Bahama was due to ~~higher sales,~~(1) increased SG&A, (2) lower gross margin and (3) lower royalty ~~income~~income. These decreases were partially offset by ~~increased SG&A.~~higher net sales. The increased SG&A was primarily due to (1) $9$2 million ofin increased employment costs, ~~with the majority of the increase in retail and restaurant operations,~~ (2) a $2 million increase in ~~occupancy expenses including increases in base rent amounts, percentage rent, occupancy related operating costs and other items,~~advertising expense, (3) $2$1 million of increased variable expenses ~~related to higher sales, including credit card transaction fees, supplies, commissions, royalties and other expenses,~~ and (4) a $2$1 million increase in ~~advertising expense. These SG&A increases were partially offset by the absence of $5 million of Tommy Bahama lease termination charges in the Third Quarter of Fiscal 2022.~~occupancy expenses.

Lilly Pulitzer:


	Third Quarter										Second Quarter
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	84,053		$	72,157		$	11,896	16.5	%	$	91,349		$	88,665		$	2,684	3.0	%
Gross profit	$	52,993		$	48,668		$	4,325	8.9	%	$	63,099		$	63,320		$	(221)	(0.3)	%
Gross margin		63.0	%		67.4	%						69.1	%		71.4	%
Operating income	$	12,688		$	15,985		$	(3,297)	(20.6)	%	$	18,566		$	21,492		$	(2,926)	(13.6)	%
Operating income as % of net sales		15.1	%		22.2	%						20.3	%		24.2	%

The decreased operating income for Lilly Pulitzer was due to (1) increased SG&A and (2) lower gross ~~margin~~margin. These decreases were partially offset by higher ~~sales and royalty income.~~net sales. The increased SG&A was primarily due to (1) $2$1 million ~~of increased advertising expense, (2) $2 million of~~in increased employment costs ~~(3)~~and (2) $1 million of increased ~~variable expenses resulting from the higher net sales, and (4) $1 million of higher~~ depreciation expense.

Johnny Was:


	Third Quarter										Second Quarter
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	22,661		$	—		$	22,661	100.0	%	$	52,023		$	—		$	52,023	100.0	%
Gross profit	$	14,597		$	—		$	14,597	100.0	%	$	35,922		$	—		$	35,922	100.0	%
Gross margin		64.4	%		—	%						69.1	%		—	%
Operating income	$	117		$	—		$	117	100.0	%	$	3,847		$	—		$	3,847	100.0	%
Operating income as % of net sales		0.5	%		—	%						7.4	%		—	%
Notable items included in amounts above:
Inventory step-up charge included in Johnny Was	$	1,376		$	—
Amortization of Johnny Was intangible assets	$	1,641		$	—						$	3,463		$	—

Operating income for the Second Quarter of Fiscal 2023 represents the acquired operations of Johnny Was ~~operating income in the six weeks following the September 19, 2022 acquisition through the end of the quarter was~~that were negatively impacted by $1$3 million of ~~charges related to inventory step-up charges and $2 million~~amortization of intangible assets.

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amortization of intangible assets. As the operating results are for less than half the fiscal quarter, the operating results are not necessarily indicative of the Johnny Was operating results of the Third Quarter of Fiscal 2022.

Emerging Brands:

Third Quarter


Fiscal 2022

Fiscal 2021

$ Change

% Change

Net sales

$
26,912

$
22,082

$
4,830

21.9
%
Gross profit

$
13,426

$
11,770

$
1,656

14.1
%
Gross margin

49.9
%

53.3
%





Operating income

$
3,729

$
4,103

$
(374)

(9.1)
%
Operating income as % of net sales

13.9
%

18.6
%





Notable items included in amounts above:

TBBC change in fair value of contingent consideration

$
—

$
786


	Second Quarter
	Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	31,580		$	29,913		$	1,667	5.6	%
Gross profit	$	15,793		$	14,127		$	1,666	11.8	%
Gross margin		50.0	%		47.2	%
Operating income	$	3,028		$	3,991		$	(963)	(24.1)	%
Operating income as % of net sales		9.6	%		13.3	%

The decreased operating income for Emerging Brands was primarily due to increased SG&A ~~and lower gross margin~~ partially offset by higher ~~net sales.~~sales and gross margin. The increased SG&A included (1) higher SG&A associated with ~~the Southern Tide and TBBC~~new retail store operations, including related employment costs, ~~and~~ occupancy costs and administrative expenses, (2) higher advertising expense and (3) increased variable expenses resulting from increased sales, (3) higher advertising expense and (4) increased administrative expenses associated with the Emerging Brands businesses. These increases in SG&A were partially offset by the lack of a TBBC change in fair value of contingent consideration in the Third Quarter of Fiscal 2022 after incurring a $1 million charge for TBBC change in fair value of contingent consideration in the Third Quarter of Fiscal 2021.sales.

~~Lanier Apparel:~~

Third Quarter


Fiscal 2022

Fiscal 2021

$ Change

% Change

Net sales

$
—

$
4,232

$
(4,232)

(100.0)
%
Gross profit

$
—

$
2,195

$
(2,195)

(100.0)
%
Gross margin

—
%

51.9
%



Operating income

$
—

$
348

$
(348)

(100.0)
%
Operating income as % of net sales

—
%

8.2
%





Notable items included in amounts above:

Lanier Apparel exit charges in cost of goods sold

$
-

$
(684)

Lanier Apparel exit charges in SG&A

$
-

$
559

There was no operating income for Lanier Apparel in the Third Quarter of Fiscal 2022. The Third Quarter of Fiscal 2021 for Lanier Apparel included the operating income resulting from the net sales, cost of goods sold and SG&A as we were exiting the Lanier Apparel business, including the net impact related to Lanier Apparel exit charges.

~~Table of Contents~~

Corporate and Other:


	Third Quarter								Second Quarter
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Net sales	$	762	$	804	$	(42)	(5.2)	%	$	(76)	$	887	$	(963)	(108.6)	%
Gross profit	$	1,037	$	(1,868)	$	2,905	NM	%	$	(1,379)	$	(2,094)	$	715	NM	%
Operating loss	$	(8,203)	$	4,640	$	(12,843)	NM	%	$	(8,804)	$	(9,030)	$	226	NM	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	(650)	$	2,197					$	1,432	$	2,733
Transaction expenses and integration costs associated with the Johnny Was acquisition	$	2,783	$	—
Gain on sale of investment in unconsolidated entity	$	—	$	(11,586)

The ~~lower~~improved operating results in Corporate and Other were primarily a result of (1) decreased SG&A, including decreased incentive compensation amounts and (2) a lower net LIFO accounting charge in the ~~Third~~Second Quarter of Fiscal 2021 including a $12 million gain on sale of an investment in an unconsolidated entity, (2) $3 million of transaction expenses and integration costs associated with the Johnny Was acquisition and (3) increased SG&A, including increased employment costs. The impact of these items were partially offset by a $3 million favorable impact from LIFO accounting.2023.

Interest expense, net


	Third Quarter								Second Quarter
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Interest expense, net	$	698	$	222	$	476	214.4	%	$	1,297	$	274	$	1,023	373.4	%

The higher interest expense in the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 was primarily due to ~~borrowings pursuant to our U.S. Revolving Credit Agreement~~debt utilized to fund a portion of the acquisition of Johnny Was, while there was no debt outstanding in the ~~Third~~Second Quarter of Fiscal ~~2021.~~2022. The interest expense for the ~~Third~~Second Quarter of Fiscal ~~2021~~2022 primarily consisted of unused line fees and amortization of deferred financing fees associated with the ~~U.S. Revolving~~Prior Credit Agreement.

Income tax ~~provision~~


	Third Quarter										Second Quarter
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Income tax expense	$	6,951		$	4,400		$	2,551	58.0	%	$	14,924		$	18,485		$	(3,561)	(19.3)	%
Effective tax rate		26.1	%		14.5	%						22.5	%		24.6	%

~~The Third~~Both the Second Quarter of Fiscal ~~2021 benefitted from~~2023 and the ~~utilization of benefits associated with certain capital losses to substantially offset the gain recognized on the sale of an unconsolidated entity in the Third~~Second Quarter of Fiscal ~~2021, resulting~~2022 benefitted from certain items that resulted in ~~the effective~~a lower tax rate ~~during~~than the Third Quarter of Fiscal 2021 being unusually low. Further, due to the lower earnings during the third quarter as compared to our other fiscal quarters, certain discrete or other items recognized in the third quarter may have a more ~~pronounced impact resulting in the~~typical annual effective tax rate of approximately 25%.

The income tax expense in the ~~third quarter not being indicative~~Second Quarter of Fiscal 2023 included the vesting of restricted stock awards at a price higher than the grant date fair value and certain other items. Income tax expense in the Second Quarter of Fiscal 2022 included the benefit of the ~~effective tax rate for the full fiscal year. We expect our annual effective tax rate for Fiscal 2022 to be between 24%~~utilization of certain net operating loss carryforward amounts in certain state and ~~25%.~~foreign jurisdictions and certain other items.

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Net earnings


	Third Quarter				Second Quarter
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Net sales	$	313,033	$	247,729	$	420,319	$	363,430
Operating income	$	27,315	$	30,607	$	67,674	$	75,371
Net earnings	$	19,666	$	25,985	$	51,453	$	56,612
Net earnings per diluted share	$	1.22	$	1.54	$	3.22	$	3.49
Weighted average shares outstanding - diluted		16,139		16,872		15,979		16,238

Net earnings per diluted share were ~~$1.22~~$3.22 in the ~~Third~~Second Quarter of Fiscal 2023 compared to $3.49 in the Second Quarter of Fiscal 2022 ~~compared to $1.54 in~~reflecting the ~~Third Quarter of Fiscal 2021. The decreased net earnings per diluted share was primarily due to~~ (1) ~~the Third Quarter of Fiscal 2021 including a gain on sale of an investment in an unconsolidated entity in Corporate and Other,~~increased SG&A, (2) ~~lower operating income in Lilly Pulitzer~~increased interest expense and (3) ~~a higher effective tax rate.~~decreased royalties and other operating income. These ~~items~~decreases were partially offset by (1) higher ~~operating~~sales and gross margin, (2) a decreased effective income ~~in Tommy Bahama.~~tax rate and (3) share repurchases as noted above.

FIRST ~~NINE MONTHS~~HALF OF FISCAL ~~2022~~2023 COMPARED TO FIRST ~~NINE MONTHS~~HALF OF FISCAL ~~2021~~2022

The discussion and tables below compare our statements of operations for the First ~~Nine Months~~Half of Fiscal ~~2022 to~~2023 and the First ~~Nine Months~~Half of Fiscal ~~2021.~~2022. Each dollar and percentage change provided reflects the change between these fiscal periods unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share amounts. We have calculated all percentages based on actual data, and percentage columns in tables may not add due to rounding. Individual line items of our consolidated statements of operations, including gross profit, may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company.

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


	First Nine Months												First Half
	Fiscal 2022				Fiscal 2021				$ Change		% Change		Fiscal 2023				Fiscal 2022				$ Change		% Change
Net sales	$	1,029,044	100.0	%	$	842,163	100.0	%	$	186,881	22.2	%	$	840,416	100.0	%	$	716,011	100.0	%	$	124,405	17.4	%
Cost of goods sold		372,824	36.2	%		313,414	37.2	%		59,410	19.0	%		296,558	35.3	%		257,485	36.0	%		39,073	15.2	%
Gross profit	$	656,220	63.8	%	$	528,749	62.8	%	$	127,471	24.1	%	$	543,858	64.7	%	$	458,526	64.0	%	$	85,332	18.6	%
SG&A		495,574	48.2	%		420,997	50.0	%		74,577	17.7	%		408,380	48.6	%		320,547	44.8	%		87,833	27.4	%
Royalties and other operating income		18,018	1.8	%		25,744	3.1	%		(7,726)	(30.0)	%		12,497	1.5	%		13,370	1.9	%		(873)	(6.5)	%
Operating income	$	178,664	17.4	%	$	133,496	15.9	%	$	45,168	33.8	%	$	147,975	17.6	%	$	151,349	21.1	%	$	(3,374)	(2.2)	%
Interest expense, net		1,214	0.1	%		685	0.1	%		529	77.2	%		3,639	0.4	%		516	0.1	%		3,123	605.2	%
Earnings before income taxes	$	177,450	17.2	%	$	132,811	15.8	%	$	44,639	33.6	%	$	144,336	17.2	%	$	150,833	21.1	%	$	(6,497)	(4.3)	%
Income tax expense		43,764	4.3	%		26,898	3.2	%		16,866	62.7	%		34,345	4.1	%		36,813	5.1	%		(2,468)	(6.7)	%
Net earnings	$	133,686	13.0	%	$	105,913	12.6	%	$	27,773	26.2	%	$	109,991	13.1	%	$	114,020	15.9	%	$	(4,029)	(3.5)	%
Net earnings per diluted share	$	8.19			$	6.29			$	1.90	30.2	%	$	6.86			$	6.94			$	(0.08)	(1.2)	%
Weighted average shares outstanding - diluted		16,333				16,841				(508)	(3.0)	%		16,025				16,430				(405)	(2.5)	%

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Table of Contents

Net Sales


	First Nine Months								First Half
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Tommy Bahama	$	650,677	$	513,985	$	136,692	26.6	%	$	484,878	$	472,032	$	12,846	2.7	%
Lilly Pulitzer		264,763		233,066		31,697	13.6	%		188,799		180,710		8,089	4.5	%
Johnny Was		22,661		—		22,661	100.0	%		101,514		—		101,514	100.0	%
Emerging Brands		88,588		67,336		21,252	31.6	%		65,571		61,676		3,895	6.3	%
Lanier Apparel		—		24,743		(24,743)	(100.0)	%
Corporate and Other		2,355		3,033		(678)	(22.4)	%		(346)		1,593		(1,939)	(121.7)	%
Consolidated net sales	$	1,029,044	$	842,163	$	186,881	22.2	%	$	840,416	$	716,011	$	124,405	17.4	%

Consolidated net sales were ~~$1,029~~$840 million in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 compared to net sales of ~~$842~~$716 million in the First ~~Nine Months~~Half of Fiscal ~~2021.~~2022. The ~~22%~~17% increase in net sales included ~~double-digit percentage increases~~(1) $102 million in ~~each of our Tommy Bahama, Lilly Pulitzer, and Emerging Brands operating groups as well as $23 million of~~ sales for Johnny Was, which was acquired during the Third Quarter of Fiscal ~~2022. These~~2022 and (2) increases ~~were partially offset by a $25 million decrease~~ in sales for Lanier Apparel, which we exited in Fiscal 2021. In the First Nine Months of Fiscal 2021, and particularly in the First Quarter of Fiscal 2021, consumer traffic and our operations had only partially rebounded from the impacts of the COVID-19 pandemic as we still had certain store closures andeach operating restrictions in certain regions, wholesale customer demand was still soft and most of the consumer traffic improvement occurred after the First Quarter of Fiscal 2021. The higher net sales were due to a combination of increased volume as well as price increases, which were implemented in order to mitigate increased product and other costs.group.

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

●

an increase in full-price retail sales of ~~$76~~$35 million, or ~~27%~~14%, including (1) a 24% aggregate increase in full-price retail sales in Tommy Bahama, Lilly Pulitzer and Emerging Brands driven primarily by increased consumer traffic and average dollars per transaction partially offset by lower conversion rates, and (2) $8$36 million of ~~full-price~~ retail sales in Johnny ~~Was;~~Was and (2) a $4 million increase in Emerging Brands as we opened new retail locations. These increases were partially offset by (1) a $2 million decrease in Tommy Bahama and (2) a $1 million decrease in Lilly Pulitzer;

●

an increase in full-price e-commerce sales of ~~$45~~$54 million, or ~~19%~~26%, including (1) ~~a 15% aggregate increase in e-commerce sales in Tommy Bahama, Lilly Pulitzer and Emerging Brands and (2) $9~~$41 million of ~~full-price~~ e-commerce sales in Johnny ~~Was;~~Was, (2) a $5 million increase in Lilly Pulitzer, (3) a $4 million increase in Tommy Bahama and (4) a $4 million increase in Emerging Brands;

●

an increase in wholesale sales of ~~$32~~$22 million, or ~~17%~~14%, ~~with this increase primarily due to~~including (1) ~~higher order books as wholesale accounts in Tommy Bahama, Lilly Pulitzer and Emerging Brands increased their buys for Fiscal 2022 compared to Fiscal 2021 and (2) $5~~$23 million of wholesale sales ~~for~~in Johnny Was and (2) a $6 million increase in Tommy Bahama. These increases were partially offset by (1) a ~~reduction of $25~~$4 million ~~of wholesale sales for Lanier Apparel, with no sales~~decrease in ~~the First Nine Months of Fiscal 2022;~~Lilly Pulitzer and (2) a $3 million decrease in Emerging Brands;

●

an increase in Lilly Pulitzer e-commerce flash clearance sales of ~~$16~~$9 million, or ~~86%~~115%;

●

an increase in ~~restaurant~~food and beverage sales of ~~$11~~$3 million, or ~~15%~~6%; and

●

an increase in outlet sales of $7$3 million, or ~~18%.~~9%, primarily driven by the addition of Johnny Was.

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


	First Half
	Fiscal 2023		Fiscal 2022
Retail	39	%	41	%
E-commerce	33	%	30	%
Food & beverage	7	%	8	%
Wholesale	21	%	21	%
Total	100	%	100	%

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Table of Contents

First Nine Months



Fiscal 2022

Fiscal 2021

Retail

39
%
38
%
E-commerce

31
%
31
%
Restaurant

8
%
8
%
Wholesale

21
%
22
%
Total

100
%
100
%

Tommy Bahama:

~~Tommy Bahama:~~

Tommy Bahama net sales increased ~~$137~~$13 million, or ~~27%~~3%, in the First ~~Nine Months~~Half of Fiscal ~~2022,~~2023, with an increase in ~~each channel~~(1) wholesale sales of ~~distribution. The increase~~$6 million, or 8%, (2) e-commerce sales of $5 million, or 4%, (3) food and beverage sales of $3 million, or 6%, and (4) outlet sales of $1 million, or 3%. These increases were partially offset by a decrease in ~~net sales in Tommy Bahama included increases in (1)~~ full-price retail sales of ~~$56~~$2 million, or 29%, (2) wholesale sales of $37 million, or 44%, (3) e-commerce sales of $26 million, or 21%, (4) restaurant sales of $11 million, or 15%, with low double-digit percentage increases in locations open the full quarter of both periods as well as increased sales at the New York and Palm Desert locations, which were not open the full quarter in the Third Quarter of Fiscal 2021, and (5) outlet sales of $7 million, or 17%1%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:


	First Nine Months				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Retail	46	%	46	%	45	%	47	%
E-commerce	23	%	24	%	24	%	24	%
Restaurant	12	%	14	%
Food & beverage					13	%	12	%
Wholesale	19	%	16	%	18	%	17	%
Total	100	%	100	%	100	%	100	%

Lilly Pulitzer:

Lilly Pulitzer net sales increased ~~$32~~$8 million, or ~~14%~~5%, in the First ~~Nine Months~~Half of Fiscal ~~2022, with an increase in each channel~~2023. The First Half of ~~distribution.~~Fiscal 2023 benefited from a larger e-commerce flash clearance sale and a 30% off direct to consumer event. The increase in net sales by distribution channel included an increase in ~~Lilly Pulitzer included increases in (1)~~e-commerce sales of $13 million, or 17%, including increased e-commerce flash clearance sales of $16 million, or 86%, as Lilly Pulitzer had increased levels of inventory available for the e-commerce flash clearance sales in Fiscal 2022 after having more limited end of season inventory in Fiscal 2021, (2) retail sales of $9 million, or ~~11%~~115%, ~~(3)~~and increased full-price e-commerce sales of $5 million or 7%. This increase was partially offset by decreased (1) wholesale sales of $6$4 million, or ~~15%, with higher full-price sales~~11% and ~~lower off-price sales and (4) full-price e-commerce~~(2) retail sales of $1 million, or 1%2%. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

First Nine Months


Fiscal 2022

Fiscal 2021

Retail

34
%
35
%
E-commerce

49
%
48
%
Wholesale

17
%
17
%
Total

100
%
100
%

~~Johnny Was:~~

Johnny Was net sales were $23 million in the six weeks following the September 19, 2022 acquisition through the end of the quarter. During the six-week period ecommerce, retail and wholesale sales were 41%, 38% and 21% of the net sales. As the net sales are for less than half of one fiscal quarter, the percentage of net sales by distribution channel are not indicative of the proportion of net sales that are typical for the nine month period ended October 29, 2022.

~~Emerging Brands:~~

Emerging Brands net sales increased $21 million, or 32%, in the First Nine Months of Fiscal 2022, with an increase in each of the TBBC, Southern Tide and Duck Head businesses comprising Emerging Brands. By brand, the increase in net sales included increases in (1) TBBC of $12 million, or 59%, to $31 million, (2) Southern Tide of $7 million, or 17%, to $51 million, and (3) Duck Head of $2 million, or 51%, to $7 million. By distribution channel, the $21 million


	First Half
	Fiscal 2023		Fiscal 2022
Retail	35	%	37	%
E-commerce	49	%	43	%
Wholesale	16	%	20	%
Total	100	%	100	%

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Table of Contents

Johnny Was:

Johnny Was net sales were $102 million during the First Half of Fiscal 2023. The following table presents the proportion of net sales by distribution channel for Johnny Was for each period presented:


	First Half
	Fiscal 2023		Fiscal 2022
Retail	37	%	—	%
E-commerce	40	%	—	%
Wholesale	23	%	—	%
Total	100	%	—	%

Emerging Brands:

Emerging Brands net sales increased $4 million, or 6%, in the First Half of Fiscal 2023 with increased sales in each brand. By distribution channel, the $4 million increase included increases of (1) ~~$10~~$4 million, or ~~40%~~17%, in e-commerce and (2) $9$3 million, or ~~24%~~73%, in ~~wholesale, and (3) $2 million, or 69%, in the Southern Tide and TBBC~~ retail ~~businesses,~~sales as ~~those brands continue to open~~we opened new retail locations. These increases were partially offset by a $3 million, or 8%, decrease in wholesale sales that includes the impact of the acquisition and conversion of three former Southern Tide Signature Store operations to company owned retail stores. The following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:


	First Nine Months				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Retail	5	%	4	%	10	%	6	%
E-commerce	39	%	37	%	42	%	38	%
Wholesale	56	%	59	%	48	%	56	%
Total	100	%	100	%	100	%	100	%

~~Lanier Apparel:~~

~~There were no Lanier Apparel net sales in the First Nine Months of Fiscal 2022, compared to $25 million of net sales in the First Nine Months of Fiscal 2021.~~

Corporate and Other:

Corporate and Other net sales primarily consist of net sales of our Lyons, Georgia distribution center business, ~~as well as~~ our Oxford America business, which we exited in Fiscal ~~2022. The decrease in net~~2022, and the elimination of any sales ~~was primarily due to lower sales in Oxford America.~~between operating groups.

Gross Profit

The tables below present gross profit by operating group and in total for the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 and the First ~~Nine Months~~Half of Fiscal ~~2021,~~2022, as well as the dollar change and percentage change between those two periods, and gross margin by operating group and in total. Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company.


	First Nine Months								First Half
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Tommy Bahama	$	419,781	$	326,681	$	93,100	28.5	%	$	313,536	$	304,139	$	9,397	3.1	%
Lilly Pulitzer		179,841		161,718		18,123	11.2	%		131,395		126,848		4,547	3.6	%
Johnny Was		14,597		—		14,597	100.0	%		69,510		—		69,510	100.0	%
Emerging Brands		43,901		36,278		7,623	21.0	%		31,425		30,475		950	3.1	%
Lanier Apparel		—		12,255		(12,255)	(100.0)	%
Corporate and Other		(1,900)		(8,183)		6,283	NM	%		(2,008)		(2,936)		928	NM	%
Consolidated gross profit	$	656,220	$	528,749	$	127,471	24.1	%	$	543,858	$	458,526	$	85,332	18.6	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	3,087	$	9,616					$	2,758	$	3,737
Inventory step-up charge included in Johnny Was	$	1,376	$	—
Lanier Apparel exit charges in cost of goods sold	$	—	$	(2,826)

First Nine Months


Fiscal 2022

Fiscal 2021

Tommy Bahama

64.5
%
63.6
%
Lilly Pulitzer

67.9
%
69.4
%
Johnny Was

64.4
%
—
%
Emerging Brands

49.6
%
53.9
%
Lanier Apparel

—
%
49.5
%
Corporate and Other

NM
%
NM
%
Consolidated gross margin

63.8
%
62.8
%


		First Half

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	Fiscal 2023		Fiscal 2022
Tommy Bahama	64.7	%	64.4	%
Lilly Pulitzer	69.6	%	70.2	%
Johnny Was	68.5	%	—	%
Emerging Brands	47.9	%	49.4	%
Corporate and Other	NM	%	NM	%
Consolidated gross margin	64.7	%	64.0	%

The increased gross profit of ~~24%~~19% was primarily due to the ~~22%~~17% increase in net sales as well as increased consolidated gross margin. The higher gross margin included (1) ~~a $7 million lower LIFO accounting charge in~~ the ~~First Nine Months~~68.5% gross margin of ~~Fiscal 2022 compared to the First Nine Months of Fiscal 2021,~~Johnny Was, (2) ~~the lack of any Lanier Apparel sales, which had lower gross margins than our branded businesses,~~reduced freight costs, (3) improved initial product margins, as certain sales prices were increased more than the increased product costs during the last year and (4) ~~lower freight costs of~~a $1 million ~~after incurring approximately 100 basis points of incremental freight costs~~lower LIFO accounting charge in the ~~First Nine Months~~Second Quarter of Fiscal ~~2021.~~2023 compared to the Second Quarter of Fiscal 2022. These ~~items~~increases were partially offset by (1) ~~the impact of the~~increased e-commerce flash clearance sales in Lilly Pulitzer ~~e-commerce flash sale, which represented a larger proportion of net~~and (2) increased sales and had lower gross margins in the First Nine Months of Fiscal 2022, (2) the lack of a favorable adjustment of Lanier Apparel exit charges in cost of goods sold after a $3 million favorable adjustment of Lanier Apparel exit charges in cost of goods sold in the First Nine Months of Fiscal 2021 and (3) the $1 million inventory step up charge related to the Johnny Was acquisition in the Third Quarter of Fiscal 2022.

In the Third Quarter of Fiscal 2021, freight costs increased significantly from prior periods, including rate increases for both ocean and air shipments as well as the increased utilization of air freight on inbound products as we navigated our need for inventory and the supply chain challenges. The increased inbound freight rates, which have moderated somewhat from the peak, have continued into Fiscal 2022. However, our use of air freight has decreased as we have placed seasonal inventory purchases on an earlier timeline to reduce the risk of late delivery of our products. These factors resulted in a significant negative impact on our gross margin during the ~~Second Half~~loyalty award, Flip Side marketing, and end of ~~Fiscal 2021, but not as significant of a negative impact on our gross margin~~season clearance events in ~~the Second Half of Fiscal 2022. In Fiscal 2022 freight costs are still elevated by approximately 50 to 100 basis points as compared to pre-pandemic levels.~~Tommy Bahama.

Tommy Bahama:

The higher gross margin for Tommy Bahama was primarily due to (1) reduced freight costs, ~~in the First Nine Months of Fiscal 2022, after significantly higher freight costs were incurred in the Third Quarter of Fiscal 2021, as well as~~(2) improved initial product margins and (3) increased food and beverage gross margins. These ~~items~~increases were partially offset by ~~(1) a change in~~increased sales ~~mix with wholesale sales representing a higher proportion of net sales, (2)~~during the ~~impact of a higher proportion of Tommy Bahama direct to consumer sales occurring during periodic Friends and Family,~~ loyalty award, ~~card,~~ Flip Side marketing, orand end of season clearance events ~~and (3) increased food costs~~ in ~~our food and beverage business.~~Tommy Bahama.

Lilly Pulitzer:

The lower gross margin for Lilly Pulitzer was primarily due to ~~(1)~~ a change in sales mix with e-commerce flash clearance sales ~~which typically have gross margins in the low 40% range,~~ representing a larger proportion of net sales and (2) lower gross margins on the e-commerce flash clearance sales, as the gross margin achieved in the Third Quarter of Fiscal 2021 was higher than typical e-commerce flash clearance sales gross margins due to less end of season inventory available in Fiscal 2021.sales. This decrease was partially offset by (1) lower freight costs, ~~and improved~~(2) an increase in initial product ~~margins.~~margins and (3) a change in sales mix with wholesale sales representing a lower proportion of Lilly Pulitzer net sales.

Johnny Was:

The Johnny Was gross profit and gross margin for the six weeks following the September 19, 2022 acquisition through the end of the quarter was unfavorably impacted by $1 million of incremental cost of goods sold resulting from the charge related to the step up of inventory to fair value at acquisition. Thus, we do not believe the gross profit or gross margin in the six week period is indicative of the gross profit or gross

Gross margin for the First ~~Nine Months~~Half of Fiscal 2022 or any other fiscal period for Johnny Was. On an annual basis, with no impact of inventory step-up charges, Johnny Was gross margins have historically been and are expected to be approximately 65%, after conforming to our accounting policy of classifying outbound freight charges in cost of goods sold rather than SG&A.2023 was 68.5%.

Emerging Brands:

The lower gross margin for Emerging Brands was primarily due to ~~more~~lower gross margin on wholesale sales due to off-price wholesale sales of previously marked down inventory ~~markdowns and increased freight costs~~representing a greater proportion of wholesale sales. This decrease was partially offset by a change in sales mix with direct to consumer sales representing a greater proportion of net sales.

~~Lanier Apparel:~~

There was no gross profit for Lanier Apparel in the First Nine Months of Fiscal 2022. The First Nine Months of Fiscal 2021 for Lanier Apparel included the gross profit impact of net sales as we were exiting the business, as well as a reduction in inventory markdowns associated with the exit of Lanier Apparel.

~~Table of Contents~~

Corporate and Other:

The gross profit in Corporate and Other primarily reflects the impact of LIFO accounting adjustments, which was a $3 million charge in the First Half of Fiscal 2023 and $4 million in the First Half of Fiscal 2022, and the gross profit of the Lyons, Georgia distribution center and Oxford America businesses. ~~The primary driver for the improved gross profit was the $7 million lower LIFO accounting charge.~~ The LIFO accounting impact in Corporate and Other in each period includes the net impact of (1) a charge in Corporate and Other when inventory that had been marked down in an operating group in a prior period was ultimately sold, (2) a credit in Corporate and Other when inventory had been marked down in an operating group in the current period, but had not been sold as of period end and (3) the change in the LIFO reserve, if any.

Table of Contents

SG&A


	First Nine Months										First Half
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
SG&A	$	495,574		$	420,997		$	74,577	17.7	%	$	408,380		$	320,547		$	87,833	27.4	%
SG&A (as a % of net sales)		48.2	%		50.0	%						48.6	%		44.8	%
Notable items included in amounts above:
Tommy Bahama lease termination charge	$	—		$	4,850
Amortization of Johnny Was intangible assets	$	1,641		$	—						$	6,926		$	—
TBBC change in fair value of contingent consideration	$	—		$	786
Lanier Apparel exit charges in SG&A	$	—		$	3,788
Transaction expenses and integration costs associated with the Johnny Was acquisition included in Corporate and Other	$	2,783		$	—

SG&A was ~~$496~~$408 million in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 compared to ~~SG&A of $421~~$321 million in the First ~~Nine Months of Fiscal 2021. The increase includes the net impact of approximately $14 million of SG&A associated with Johnny Was in the First Nine Months~~Half of Fiscal 2022, ~~and $10~~with approximately $63 million, or 72%, of the increase due to the SG&A ~~and exit charges~~ of ~~Lanier Apparel in the First Nine Months of Fiscal 2021, which are reflected in the changes in each category noted in the following paragraph, as applicable.~~

Johnny Was. The ~~18%~~27% increase in total SG&A in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 included the following, each of which includes the SG&A of Johnny Was: (1) increased employment costs of ~~$35~~$25 million, primarily due to increased head count, pay rate increases and other employment cost increases, ~~particularly~~including in our direct to consumer and distribution center operations partially offset by lower incentive compensation amounts, (2) ~~a $14~~an $18 million increase in advertising expense, (3) ~~an $11~~a $12 million increase in occupancy expenses, (4) a $12 million increase in variable expenses related to higher sales, including credit card transaction fees, supplies, commissions, royalties and other expenses, ~~(4) a $7 million increase in occupancy expenses, including increases in base rent amounts, percentage rent, occupancy related operating costs and other items,~~ (5) a $5$11 million increase in administrative expenses including professional fees, travel and other items, (6) $3a $7 million increase in amortization of ~~charges related to transaction expenses~~intangible assets and ~~integration costs associated with the Johnny Was acquisition,~~ (7) a $2 million increase in depreciation ~~expense, and (8) a $2 million increase in amortization of intangible assets~~ expense. These items were partially offset by the absence of $5 million of Tommy Bahama lease termination charges, $4 million of Lanier Apparel exit charges and $1 million of TBBC change in fair value of contingent consideration in the First Nine Months of Fiscal 2022.

Royalties and other operating income


	First Nine Months								First Half
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Royalties and other operating income	$	18,018	$	25,744	$	(7,726)	(30.0)	%	$	12,497	$	13,370	$	(873)	(6.5)	%
Notable items included in amounts above:
Gain on sale of investment in unconsolidated entity	$	—	$	(11,586)
Gain on sale of Merida manufacturing facility									$	(1,756)	$	—

~~Table of Contents~~

Royalties and other operating income typically consists primarily of income received from third parties from the licensing of our ~~brands, but the First Nine Months of Fiscal 2021 also included a $12 million gain on sale of investment in unconsolidated entity. Royalty~~brands. The decreased royalties and other operating income in the First ~~Nine Months~~Half of Fiscal ~~2022 increased~~2023 was primarily due to ~~increased~~decreased royalty income in ~~both~~ Tommy Bahama ~~and Lilly Pulitzer.~~reflecting the lower sales of our licensing partners. This decrease was partially offset by a $2 million gain recorded in the First Half of Fiscal 2023 on the sale of the Merida manufacturing facility in Mexico previously operated by our Lanier Apparel operating group, which we exited in Fiscal 2021.

Operating income (loss)


	First Nine Months								First Half
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Tommy Bahama	$	130,508	$	73,515	$	56,993	77.5	%	$	106,558	$	111,524	$	(4,966)	(4.5)	%
Lilly Pulitzer		60,358		61,713		(1,355)	(2.2)	%		43,082		47,670		(4,588)	(9.6)	%
Johnny Was		117		—		117	100.0	%		6,331		—		6,331	100.0	%
Emerging Brands		15,456		13,565		1,891	13.9	%		6,941		11,727		(4,786)	(40.8)	%
Lanier Apparel		—		2,053		(2,053)	(100.0)	%
Corporate and Other		(27,775)		(17,350)		(10,425)	NM	%		(14,937)		(19,572)		4,635	NM	%
Consolidated operating income	$	178,664	$	133,496	$	45,168	33.8	%	$	147,975	$	151,349	$	(3,374)	(2.2)	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	3,087	$	9,616					$	2,758	$	3,737
Inventory step-up charge included in Johnny Was	$	1,376	$	—
Lanier Apparel exit charges in cost of goods sold	$	—	$	(2,826)
Tommy Bahama lease termination charge	$	—	$	4,850
Amortization of Johnny Was intangible assets	$	1,641	$	—					$	6,926	$	—
TBBC change in fair value of contingent consideration	$	—	$	786
Lanier Apparel exit charges in SG&A	$	—	$	3,788
Transaction expenses and integration costs associated with the Johnny Was acquisition included in Corporate and Other	$	2,783	$	—
Gain on sale of investment in unconsolidated entity	$	—	$	(11,586)
Gain on sale of Merida manufacturing facility									$	(1,756)	$	—

Operating income was ~~$179~~$148 million in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 compared to ~~$133~~$151 million in the First ~~Nine Months~~Half of Fiscal ~~2021.~~2022. The ~~increased~~decreased operating income ~~was primarily due to higher net sales, gross margin and royalty income partially offset by increased SG&A. By operating group, the increased operating income was due to higher~~included lower operating income in Tommy Bahama, Lilly Pulitzer and Emerging Brands. These decreases were partially offset by (1) the operating income of Johnny Was and (2) a lower operating ~~results~~loss in Corporate and Other, which included a $12 million gain on sale of investment in unconsolidated entity in the First Nine Months of Fiscal 2021, as well as other smaller changes in our other operating groups. Changes in operating income (loss) by operating group are discussed below.Other.

~~Tommy Bahama:~~

First Nine Months



Fiscal 2022

Fiscal 2021

$ Change

% Change

Net sales

$
650,677

$
513,985

$
136,692

26.6
%
Gross profit

$
419,781

$
326,681

$
93,100

28.5
%
Gross margin

64.5
%

63.6
%





Operating income

$
130,508

$
73,515

$
56,993

77.5
%
Operating income as % of net sales

20.1
%

14.3
%





Notable items included in amounts above:

Tommy Bahama lease termination charge

$
—

$
4,850

The increased operating income for Tommy Bahama was primarily due to higher sales, gross margin and royalty income partially offset by increased SG&A. The increased SG&A was primarily due to (1) $25 million of increased employment costs, with the majority of the increase in retail and restaurant operations, (2) $8 million of increased

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Table of Contents

~~variable expenses related~~Tommy Bahama:


	First Half
	Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	484,878		$	472,032		$	12,846	2.7	%
Gross profit	$	313,536		$	304,139		$	9,397	3.1	%
Gross margin		64.7	%		64.4	%
Operating income	$	106,558		$	111,524		$	(4,966)	(4.5)	%
Operating income as % of net sales		22.0	%		23.6	%

The decreased operating income for Tommy Bahama was primarily due to (1) increased SG&A and (2) lower royalty income. These decreases were partially offset by higher sales ~~including credit card transaction fees, supplies, commissions, royalties~~ and ~~other expenses, (3) a $4~~gross margin. The increased SG&A was primarily due to (1) $6 million of increased employment costs, (2) $3 million increase in advertising expense, (3) $2 million of increased variable expenses and (4) ~~a $4~~$2 million increase in occupancy expenses including increases in base rent amounts, percentage rent, occupancy related operating costs and other items and (5) a $1 million increase in administrative expenses including professional fees, travel and other items. These SG&A increases were partially offset by (1) the absence of $5 million of Tommy Bahama lease termination charges in the Third Quarter of Fiscal 2022 and (2) a $1 million reduction in depreciation expense.expenses.

Lilly Pulitzer:


	First Nine Months										First Half
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	264,763		$	233,066		$	31,697	13.6	%	$	188,799		$	180,710		$	8,089	4.5	%
Gross profit	$	179,841		$	161,718		$	18,123	11.2	%	$	131,395		$	126,848		$	4,547	3.6	%
Gross margin		67.9	%		69.4	%						69.6	%		70.2	%
Operating income	$	60,358		$	61,713		$	(1,355)	(2.2)	%	$	43,082		$	47,670		$	(4,588)	(9.6)	%
Operating income as % of net sales		22.8	%		26.5	%						22.8	%		26.4	%

The ~~lower~~decreased operating income for Lilly Pulitzer was ~~primarily~~ due to increased SG&A and lower gross margin, partially offset by higher ~~sales and royalty income.~~sales. The increased SG&A was primarily due to (1) $7$3 million ofin increased advertising expense, (2) $4a $2 million increase in administrative expenses including professional fees, travel and other items, (3) $1 million of increased employment costs, ~~(3) $3~~(4) $1 million of ~~higher depreciation expense, (4) $2 million of~~increased variable ~~expenses related to higher net sales including credit card transaction fees, supplies and other~~ expenses and (5) $2$1 million of ~~professional and other fees, primarily related to various ongoing direct to consumer and brand initiatives.~~increased depreciation.

Johnny Was:


	First Nine Months										First Half
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	22,661		$	—		$	22,661	100.0	%	$	101,514		$	—		$	101,514	100.0	%
Gross profit	$	14,597		$	—		$	14,597	100.0	%	$	69,510		$	—		$	69,510	100.0	%
Gross margin		64.4	%		—	%						68.5	%		—	%
Operating income	$	117		$	—		$	117	100.0	%	$	6,331		$	—		$	6,331	100.0	%
Operating income as % of net sales		0.5	%		—	%						6.2	%		—	%
Notable items included in amounts above:
Inventory step-up charge included in Johnny Was	$	1,376		$	—
Amortization of Johnny Was intangible assets	$	1,641		$	—						$	6,926		$	—

Operating income for the First Half of Fiscal 2023 represents the acquired operations of Johnny Was ~~operating income in the six weeks from September 19, 2022 through the end of the fiscal quarter on October 29, 2022 included $1 million of inventory step-up charges and $2~~that were negatively impacted by (1) $7 million of amortization of intangible assets ~~which negatively impacted~~and (2) $1 million of costs associated with the ~~operating income~~implementation of Johnny Was. As the operating results for Johnny Was are for only six weeks, the operating results for this period are not indicative of the Johnny Was operating results for the First Nine Months of Fiscal 2022.a new e-commerce platform.

Emerging Brands:


	First Half
	Fiscal 2023			Fiscal 2022			$ Change		% Change
Net sales	$	65,571		$	61,676		$	3,895	6.3	%
Gross profit	$	31,425		$	30,475		$	950	3.1	%
Gross margin		47.9	%		49.4	%
Operating income	$	6,941		$	11,727		$	(4,786)	(40.8)	%
Operating income as % of net sales		10.6	%		19.0	%

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~~Emerging Brands:~~

First Nine Months



Fiscal 2022

Fiscal 2021

$ Change

% Change

Net sales

$
88,588

$
67,336

$
21,252

31.6
%
Gross profit

$
43,901

$
36,278

$
7,623

21.0
%
Gross margin

49.6
%

53.9
%



Operating income

$
15,456

$
13,565

$
1,891

13.9
%
Operating income as % of net sales

17.4
%

20.1
%





Notable items included in amounts above:

TBBC change in fair value of contingent consideration

$
—

$
786

The ~~increased~~decreased operating income for Emerging Brands was ~~primarily~~ due to ~~higher net sales partially offset by~~ increased SG&A and lower gross ~~margin.~~margin, partially offset by higher sales. The increased SG&A included (1) higher SG&A associated with ~~the Southern Tide and TBBC~~new retail store operations, including related employment costs, ~~and~~ occupancy costs and administrative expenses, (2) higher advertising expense and (3) increased variable expenses resulting from increased sales, (3) higher advertising expense and (4) increased administrative expenses associated with the Emerging Brands businesses. These increases in SG&A were partially offset by the lack of a TBBC change in fair value of contingent consideration in the First Nine Months of Fiscal 2022 after incurring a $1 million charge for TBBC change in fair value of contingent consideration in the First Nine Months of Fiscal 2021.

~~Lanier Apparel:~~

First Nine Months



Fiscal 2022

Fiscal 2021

$ Change

% Change

Net sales

$
—

$
24,743

$
(24,743)

(100.0)
%
Gross profit

$
—

$
12,255

$
(12,255)

(100.0)
%
Gross margin

—
%

49.5
%





Operating income

$
—

$
2,053

$
(2,053)

(100.0)
%
Operating income as % of net sales

—
%

8.3
%





Notable items included in amounts above:

Lanier Apparel exit charges in cost of goods sold

$
—

$
(2,826)

Lanier Apparel exit charges in SG&A

$
—

$
3,788

There was no operating income for Lanier Apparel in the First Nine Months of Fiscal 2022. The First Nine Months of Fiscal 2021 for Lanier Apparel included the operating income resulting from the net sales, cost of goods sold and SG&A as we were exiting the Lanier Apparel business, including the net impact related to Lanier Apparel exit charges.sales.

Corporate and Other:


	First Nine Months								First Half
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Net sales	$	2,355	$	3,033	$	(678)	(22.4)	%	$	(346)	$	1,593	$	(1,939)	(121.7)	%
Gross profit	$	(1,900)	$	(8,183)	$	6,283	NM	%	$	(2,008)	$	(2,936)	$	928	NM	%
Operating loss	$	(27,775)	$	(17,350)	$	(10,425)	NM	%	$	(14,937)	$	(19,572)	$	4,635	NM	%
Notable items included in amounts above:
LIFO adjustments in Corporate and Other	$	3,087	$	9,616					$	2,758	$	3,737
Transaction expenses and integration costs associated with the Johnny Was acquisition	$	2,783	$	—
Gain on sale of investment in unconsolidated entity	$	—	$	(11,586)
Gain on sale of Merida manufacturing facility									$	(1,756)	$	—

The ~~lower~~improved operating results in Corporate and Other were primarily a result of (1) ~~the First Nine Months of Fiscal 2021 including~~ a ~~$12~~$2 million gain on the sale of ~~an investment~~the Merida manufacturing facility in ~~an unconsolidated entity, with no such gain~~Mexico, (2) decreased SG&A, including decreased incentive compensation amounts and (3) a lower net LIFO accounting charge in the First

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~~Nine Months~~ Half of Fiscal 2022, (2) $3 million of transaction expenses and integration costs associated with the Johnny Was acquisition and (3) increased SG&A, including increased employment costs and other operating expenses. The impact of these items was partially offset by a $7 million favorable impact from LIFO accounting.2023.

Interest expense, net


	First Nine Months								First Half
	Fiscal 2022		Fiscal 2021		$ Change		% Change		Fiscal 2023		Fiscal 2022		$ Change		% Change
Interest expense, net	$	1,214	$	685	$	529	77.2	%	$	3,639	$	516	$	3,123	605.2	%

The higher interest expense in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 was primarily due to ~~borrowings pursuant to our U.S. Revolving Credit Agreement~~debt utilized to fund a portion of the acquisition of Johnny Was, while there was no debt outstanding in the First ~~Nine Months~~Half of Fiscal ~~2021.~~2022. The interest expense for the First ~~Nine Months~~Half of Fiscal ~~2021~~2022 primarily consisted of unused line fees and amortization of deferred financing fees associated with the ~~U.S. Revolving~~Prior Credit Agreement.

Income tax ~~provision~~


	First Nine Months										First Half
	Fiscal 2022			Fiscal 2021			$ Change		% Change		Fiscal 2023			Fiscal 2022			$ Change		% Change
Income tax expense	$	43,764		$	26,898		$	16,866	62.7	%	$	34,345		$	36,813		$	(2,468)	(6.7)	%
Effective tax rate		24.7	%		20.3	%						23.8	%		24.4	%

Both the First ~~Nine Months~~Half of Fiscal 2023 and the First Half of Fiscal 2022 ~~and~~benefited from the ~~First Nine Months of Fiscal 2021 benefitted from the~~net favorable impact of certain items that resulted in a lower effective tax rate than the more typical annual effective tax ~~rate.~~ rate of approximately 25%.

The income tax expense in ~~both~~ the First ~~Nine Months~~Half of Fiscal 2023 included the benefit of the vesting of restricted stock awards at a price higher than the grant date fair value and certain other items. The First Half of Fiscal 2022 ~~and the First Nine Months of Fiscal 2021 included the benefit of~~benefited from the utilization of certain net operating loss carryforward amounts in certain state and foreign jurisdictions ~~the recognition of~~and certain tax credit amounts and the vesting of restricted stock awards at a price higher than the grant date fair value. These favorable items were partially offset by certain unfavorable permanent items which are not deductible for income tax purposes. Additionally, and more significantly, the income tax expense in the First Nine Months of Fiscal 2021 included the benefit of a $2 million net reduction in uncertain tax positions resulting from the settlement of those uncertain tax position amounts in the First Quarter of Fiscal 2021 and the utilization of benefits associated with certain capital losses to substantially offset the gain recognized on the sale of an unconsolidated entity in the Third Quarter of Fiscal 2021.

~~We expect our annual effective tax rate for Fiscal 2022 to be between 24% and 25%.~~other items.

Net earnings

First Nine Months


Fiscal 2022

Fiscal 2021
Net sales

$
1,029,044

$
842,163
Operating income

$
178,664

$
133,496
Net earnings

$
133,686

$
105,913
Net earnings per diluted share

$
8.19

$
6.29
Weighted average shares outstanding - diluted

16,333

16,841

Net earnings per diluted share were $8.19 in the First Nine Months of Fiscal 2022 compared to $6.29 in the First Nine Months of Fiscal 2021. The 30% increase in net earnings per diluted share was primarily due to a 26% increase in net earnings as well as a 3% reduction in weighted average shares outstanding due to our share repurchase program which commenced in the Fourth Quarter of Fiscal 2021. The higher net earnings were primarily due to higher operating


	First Half
	Fiscal 2023		Fiscal 2022
Net sales	$	840,416	$	716,011
Operating income	$	147,975	$	151,349
Net earnings	$	109,991	$	114,020
Net earnings per diluted share	$	6.86	$	6.94

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Weighted average shares outstanding - diluted

16,025

16,430

~~income~~

Net earnings per diluted share were $6.86 in ~~Tommy Bahama~~the First Half of Fiscal 2023 compared to $6.94 in the First Half of Fiscal 2022 reflecting the (1) increased SG&A, (2) increased interest expense and (3) decreased royalties and operating other income. These decreases were partially offset by (1) ~~the First Nine Months of Fiscal 2021 including a $12 million gain on sale of investment in an unconsolidated entity~~higher sales and gross margin, (2) a ~~higher~~decreased effective income tax rate ~~in the First Nine Months of Fiscal 2022.~~and (3) share repurchases as noted above.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

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

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

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

~~Key Liquidity Measures~~Working Capital


	October 29,		January 29,		October 30,		January 30,		July 29,		January 28,		July 30,		January 29,
($ in thousands)	2022		2022		2021		2021		2023		2023		2022		2022
Total current assets	$	299,495	$	400,335	$	366,953	$	258,316	$	282,380	$	330,463	$	421,248	$	400,335
Total current liabilities	$	230,395	$	226,166	$	207,172	$	196,252	$	232,561	$	269,639	$	222,640	$	226,166
Working capital	$	69,100	$	174,169	$	159,781	$	62,064	$	49,819	$	60,824	$	198,608	$	174,169
Working capital ratio		1.30		1.77		1.77		1.32		1.21		1.23		1.89		1.77

Our working capital ratio is calculated by dividing total current assets by total current liabilities. Current assets as of ~~October~~July 29, ~~2022,~~2023, decreased from ~~October~~July 30, ~~2021~~2022 primarily due to the decrease in cash and cash equivalents and short-term investments, which was used to fund a portion of the Johnny Was acquisition purchase price, partially offset by increased inventories, receivables, and prepaid expenses and other current assets, ~~including~~primarily due to the assets related to Johnny Was. Current liabilities as of ~~October~~July 29, ~~2022~~2023 increased from ~~October~~July 30, ~~2021~~2022 primarily due to the current liabilities associated with Johnny ~~Was.~~Was, partially offset by lower accrued incentive compensation and accrued taxes. Changes in current assets and current liabilities are discussed below.

Table of Contents

Balance Sheet

The following tables set forth certain information included in our consolidated balance sheets (in thousands). Below each table are explanations for any significant changes in the balances as of ~~October~~July 29, ~~2022~~2023 as compared to ~~October~~July 30, ~~2021.~~2022.

~~Table of Contents~~

Current Assets:


	October 29,		January 29,		October 30,		January 30,		July 29,		January 28,		July 30,		January 29,
	2022		2022		2021		2021		2023		2023		2022		2022
Cash and cash equivalents	$	14,976	$	44,859	$	37,976	$	66,013	$	7,790	$	8,826	$	31,269	$	44,859
Short-term investments		—		164,890		150,036		—		—		—		154,754		164,890
Receivables, net		64,497		34,550		46,266		30,418		55,583		43,986		48,691		31,588
Inventories, net		171,639		117,709		90,981		123,543		161,866		220,138		135,483		117,709
Income tax receivable		19,740		19,728		18,085		17,975		19,401		19,440		19,743		19,728
Prepaid expenses and other current assets		28,643		18,599		23,609		20,367		37,740		38,073		31,308		21,561
Total current assets	$	299,495	$	400,335	$	366,953	$	258,316	$	282,380	$	330,463	$	421,248	$	400,335

Cash and cash equivalents and short-term investments were ~~$15~~$8 million as of ~~October~~July 29, ~~2022,~~2023, compared to ~~$188~~$186 million as of ~~October~~July 30, ~~2021.~~2022. The decrease in cash and cash equivalents and short-term investments from ~~October~~July 30, ~~2021~~2022 was due to the use of cash and short-term investments to fund a portion of the Johnny Was acquisition purchase price, with the remainder funded via borrowings pursuant to our ~~U.S.~~ Revolving Credit Agreement.

The increased receivables, net as of ~~October~~July 29, ~~2022~~2023, included ~~$11~~$9 million of receivables associated with Johnny ~~Was. Additionally,~~Was partially offset by decreases in receivables inof our other ~~business increased~~brands primarily due to ~~(1) higher~~lower wholesale sales, (2) a reduction in estimated customer allowances and credit losses related to wholesale receivables, (3) increased credit receivables and (4) additional amounts due from landlords for tenant improvement allowances. sales.

Inventories, net, ~~which is net of~~included a ~~$75~~$76 million and ~~$62~~$74 million LIFO reserve as of ~~October~~July 29, 2023, and July 30, 2022, ~~and October 30, 2021, respectively,~~respectively. The increased ~~to a more normalized level~~inventories, net as of ~~October~~July 29, ~~2022 and also~~2023 included inventories of ~~$25~~$18 million associated with Johnny Was. The ~~planned~~ increase in inventories of our ~~existing~~other brands ~~was primarily due to~~included (1) inventory throughout Fiscal 2021 at lower than optimal levels, when a stronger than anticipated rebound in consumer demand outpaced inventory purchases, (2) increases resulting from the earlier receipt of inventory in Fiscal 2022 to mitigate supply chain risks, (3) anticipated sales growth in each of our brands, ~~for the remainder~~(2) higher levels of ~~Fiscal 2022~~core product and ~~early Fiscal 2023 and (4)~~(3) increased product costs. The inventory increases in our brands were partially offset by the impact of LIFO accounting, including the $13 million increase in the LIFO reserve, which was primarily due to the impact of the inflationary environment on the LIFO reserve.

Income tax receivable primarily relates to the income tax receivable associated with tax returns for Fiscal 2020, which included the carry back of operating losses to offset taxable income from previous years. The increase in prepaid expenses and other current assets as of ~~October~~July 29, ~~2022~~2023 was primarily due to prepaid expenses and other current assets associated with Johnny Was.

Non-current Assets:


	October 29,		January 29,		October 30,		January 30,		July 29,		January 28,		July 30,		January 29,
	2022		2022		2021		2021		2023		2023		2022		2022
Property and equipment, net	$	173,391	$	152,447	$	156,672	$	159,732	$	188,004	$	177,584	$	150,887	$	152,447
Intangible assets, net		287,626		155,307		155,527		156,187		277,114		283,845		154,853		155,307
Goodwill		116,268		23,869		23,909		23,910		123,079		120,498		23,861		23,869
Operating lease assets		237,078		195,100		200,508		233,775		241,452		240,690		179,217		195,100
Other assets, net		26,459		30,584		29,234		33,714		37,829		35,585		27,136		30,584
Total non-current assets	$	840,822	$	557,307	$	565,850	$	607,318	$	867,478	$	858,202	$	535,954	$	557,307

Property and equipment, net as of ~~October~~July 29, ~~2022~~2023, increased primarily due to the addition of ~~$22~~$20 million of property and equipment associated with Johnny Was. ~~This~~The additional increase was ~~partially offset by the net impact of depreciation expense exceeding~~due to capital expenditures ~~during the 12 months ended October 29,~~exceeding depreciation since July 30, 2022.

Intangible assets, net and goodwill as of ~~October~~July 29, ~~2022,~~2023, increased primarily due to the ~~$133~~$135 million of intangible assets, less accumulated amortization, and ~~$92~~$98 million of goodwill associated with the acquisition of Johnny Was.

Operating lease assets as of ~~October~~July 29, ~~2022~~2023, increased primarily due to the operating lease assets associated with Johnny Was of ~~$54 million. This increase was partially offset by the net impact of the recognition of amortization related to existing operating leases~~$55 million and ~~the termination or reduced term of certain operating leases which exceeded the~~additional increases in operating lease assets associated with new or extended operating leases in our ~~existing~~other businesses. The ~~decrease~~increase in other assets, net as of ~~October~~July 29, ~~2022,~~2023, was primarily due to ~~a decrease~~an increase in ~~assets set~~equity investments in unconsolidated entities including the $8 million investment in Fiscal 2022 in the entity that owns the Tommy Bahama resort.

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~~aside for potential deferred compensation obligations, which was partially offset by other assets associated with Johnny Was.~~

Liabilities:


	October 29,		January 29,		October 30,		January 30,		July 29,		January 28,		July 30,		January 29,
	2022		2022		2021		2021		2023		2023		2022		2022
Total current liabilities	$	230,395	$	226,166	$	207,172	$	196,252	$	232,561	$	269,639	$	222,640	$	226,166
Long-term debt		130,449		—		—		—		48,472		119,011		—		—
Non-current portion of operating lease liabilities		225,921		199,488		206,484		239,963		219,207		220,709		180,092		199,488
Other non-current liabilities		18,058		21,413		21,779		23,691		20,402		20,055		19,200		21,413
Deferred income taxes		2,455		2,911		1,899		—		4,587		2,981		1,254		2,911
Total liabilities	$	607,278	$	449,978	$	437,334	$	459,906	$	525,229	$	632,395	$	423,186	$	449,978

Current liabilities increased as of ~~October~~July 29, ~~2022~~2023 primarily due to current liabilities of ~~$30~~$27 million associated with Johnny Was, with increases in accounts payable, accrued compensation and current portion of operating lease liabilities and accrued expenses and other liabilities each generally due to the liabilities of Johnny Was. This increase was partially offset by lower accrued incentive compensation amounts and lower accrued income ~~tax payable, accounts payable and accrued expenses and other liabilities related to our other businesses.~~taxes.

The long-term debt of ~~$130~~$48 million as of ~~October~~July 29, ~~2022,~~2023, was primarily due to borrowing certain amounts to fund a portion of the acquisition of Johnny Was. ~~Non-current~~The non-current portion of operating lease liabilities as of ~~October~~July 29, ~~2022,~~2023 increased primarily due to ~~$46~~the addition of $47 million of operating lease liability amounts associated with Johnny ~~Was. This was~~Was partially offset by the net impact of the payment of operating lease liabilities and reductions in liabilities related to the termination or reduced term of certain operating leases which exceeded the operating lease liabilities associated with new or extended operating leases. Other non-current liabilities as of October 29, 2022 decreased primarily due to decreases in deferred compensation liabilities.

Statement of Cash Flows

The following table sets forth the net cash flows for the First ~~Nine Months~~Half of Fiscal 2023 and the First Half of Fiscal 2022 ~~and the First Nine Months of Fiscal 2021~~ (in thousands):


	First Nine Months				First Half
	Fiscal 2022		Fiscal 2021		Fiscal 2023		Fiscal 2022
Cash provided by operating activities	$	86,255	$	157,085	$	152,500	$	90,629
Cash used in investing activities		(129,700)		(162,546)		(32,638)		(9,796)
Cash provided by (used in) financing activities		13,160		(23,135)
Cash used in financing activities						(120,881)		(94,803)
Net change in cash and cash equivalents	$	(30,285)	$	(28,596)	$	(1,019)	$	(13,970)

Cash and cash equivalents and short-term investments, in the aggregate, were ~~$15~~$8 million and ~~$188~~$186 million as of ~~October~~July 29, ~~2022~~2023, and ~~October~~July 30, ~~2021,~~2022, respectively. The decrease in cash and cash equivalents and short-term investments from ~~October~~July 30, ~~2021~~2022, was due to the use of cash and short-term investments to fund the acquisition of Johnny Was, with the remainder of the purchase price funded ~~via~~through borrowings pursuant to our ~~U.S.~~ Revolving Credit Agreement. Changes in cash flows in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 and the First ~~Nine Months~~Half of Fiscal ~~2021~~2022 related to operating activities, investing activities and financing activities are discussed below.

Operating Activities:

In the First ~~Nine Months~~Half of Fiscal 2023 and the First Half of Fiscal 2022, ~~and the First Nine Months of Fiscal 2021,~~ operating activities provided ~~$86~~$153 million and ~~$157~~$91 million of cash, respectively. The cash flow from operating activities for each period primarily consisted of net earnings for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization of intangible assets, equity-based compensation, gain on sale of ~~our interest in an unconsolidated entity,~~assets, and other non-cash items as well as the net impact of changes in deferred income taxes and operating assets and liabilities.

In the First ~~Nine Months~~Half of Fiscal ~~2022, changes~~2023, the net change in operating assets and liabilities ~~had~~was primarily due to a ~~net unfavorable impact on~~decrease in inventories that increased cash flow from operations, ~~while~~partially offset by a decrease in ~~the~~

~~Table of Contents~~

~~First Nine Months of Fiscal 2021 the changes~~current liabilities and an increase in ~~operating assets and liabilities had a net favorable impact on~~receivables that decreased cash flow from operations.

In the First ~~Nine Months~~Half of Fiscal 2022, the net change in operating assets and liabilities was primarily due to an increase in inventories, ~~and~~ receivables and ~~a decrease in current liabilities, all of which~~prepaid expenses that decreased cash flow from operations. ~~In the First Nine Months~~

Table of Fiscal 2021, the net change in operating assets and liabilities was primarily due to a decrease in inventories and an increase in current liabilities, both of which increased cash flow from operations, partially offset by an increase in receivables which decreased cash flow from operations. The significant favorable impact in the First Nine Months of Fiscal 2021 was primarily due to the stronger than expected rebound in consumer demand outpacing inventory purchases, which resulted in lower than optimal inventory levels in Fiscal 2021, and the conversion of Lanier Apparel working capital into cash during the exit of Lanier Apparel.Contents

Investing Activities:

In the First ~~Nine Months~~Half of Fiscal 2023 and the First Half of Fiscal 2022, ~~and the First Nine Months of Fiscal 2021,~~ investing activities used ~~$130~~$33 million and ~~$163~~$10 million of cash, respectively. During the First Nine Months of Fiscal 2022, we paid $264 million for the September 19, 2022 acquisition of Johnny Was and also converted $165 million of short-term investments into cash to fund a portion of the acquisition. During the First Nine Months of Fiscal 2021, we invested $150 million of excess cash into short-term investments and received $15 million of proceeds from the sale of our investment in an unconsolidated entity.

On an ongoing basis, our cash flow used in investing activities primarily consists of our capital expenditures, which totaled ~~$32~~$31 million and ~~$25~~$20 million in the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 and the First ~~Nine Months~~Half of Fiscal ~~2021,~~2022, respectively. In addition to our capital expenditures in the First ~~Nine Months~~Half of Fiscal 2023, we paid $3 million in the aggregate for a working capital settlement associated with the acquisition of Johnny Was and the acquisition of three former Southern Tide Signature Stores. We also received $2 million from the sale of the Merida manufacturing facility in Mexico. In the First Half of Fiscal 2022, ~~and the First Nine Months~~we converted $10 million of ~~Fiscal 2021, we also used or generated certain amounts of~~short-term investments to cash ~~which are included in other investing activities, related to investments in unconsolidated entities, including minority ownership interests or loans.~~based on our short-term cash needs.

On an ongoing basis, our cash flow used in investing activities is expected to primarily consist of our capital expenditure investments in ~~information technology initiatives, including e-commerce capabilities;~~(1) direct to consumer operations, including opening, relocating and remodeling ~~locations;~~locations, and facilities enhancements for distribution centers and ~~offices.~~offices, and (2) information technology initiatives, including e-commerce capabilities.

Financing Activities:

In the First ~~Nine Months~~Half of Fiscal 2023 and the First Half of Fiscal 2022, ~~and the First Nine Months of Fiscal 2021,~~ financing activities ~~provided $13~~used $121 million and ~~used $23~~$95 million of cash, respectively. ~~During~~In the First ~~Nine Months~~Half of Fiscal ~~2022,~~2023, we ~~used cash to repurchase $90~~repurchased $29 million of shares, including repurchased shares of our stock pursuant to an open market stock repurchase program and of equity awards in respect of employee tax withholding liabilities, ~~to pay $27~~paid $21 million of dividends and paid $2 million in deferred financing costs associated with the amendment of the Revolving Credit Agreement. In the First Half of Fiscal 2022, we repurchased $76 million of shares, including repurchased shares of our stock pursuant to ~~pay~~an open market stock repurchase program and of equity awards in respect of employee tax withholding liabilities; paid $18 million of dividends and paid $2 million of contingent consideration for the final contingent consideration payment related to the TBBC ~~acquisition, which is included~~acquisition.

If net cash requirements are less than our net cash flows, we may repay amounts outstanding on our Revolving Credit Agreement, if any, consistent with our repayment of $71 million of long-term debt in ~~other financing activities. In~~ the First ~~Nine Months~~Half of Fiscal ~~2021, we used cash flow from operations~~2023. Alternatively, to pay $20 million of dividends, repurchase $3 million of shares, consisting of repurchased shares of equity awards in respect of employee tax withholding liabilities, and pay $1 million of contingent consideration, which is included in other financing activities.

To the extent we are in a net debt position, and our net cash requirements exceed our net cash flows, we may borrow amounts from our ~~U.S.~~ Revolving Credit Agreement, like we did in the First Nine Months of Fiscal 2022. Alternatively, if net cash requirements are less than our net cash flows, we may repay amounts outstanding our U.S. Revolving Credit Agreement, if any.Agreement.

Liquidity and Capital Resources

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term to satisfy our ongoing operating cash requirements, ~~and~~(2) ample ~~opportunity~~funds to continue to invest in our lifestyle brands, direct to consumer initiatives and information technology projects, (3) additional cash flow to repay outstanding debt and (4) sufficient cash for other strategic initiatives.

Our capital needs depend on many factors including the results of our operations and cash flows, future growth rates, the need to finance inventory ~~levels~~ and the success of our various products.

To the extent cash flow needs in the future exceed cash flow provided by our operations, ~~as well as our cash and cash equivalents,~~ 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, and any other investing or financing activities. 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 certain product purchases, which reduce the amounts available under our line of credit when issued and totaled $5 million as of October 29, 2022.

As of October 29, 2022, we had $130 million of borrowings outstanding compared to no borrowings outstanding as of October 30, 2021, with the increase primarily due to borrowings to fund the Johnny Was acquisition. As of October 29, 2022, the weighted average interest rate of our borrowings was 4.4%, with interest rates on the individual short-term borrowing tranches ranging from 4.1% to 5.5%. The increase in borrowings, all of which are at variable interest rates, increases our exposure to rising interest rates. As of October 29, 2022, after considering our borrowings, letters of credit and available assets, we had $160 million of unused availability under our U.S. Revolving Credit Agreement.

Our cash ~~short-term investments~~ and debt, as well as availability, levels in future periods will not be comparable to historical amounts, particularly after the completion of the acquisition of Johnny Was in September 2022. We anticipate our debt will be further reduced during the Second Half of Fiscal 2023 following the reduction of long-term debt by $71 million in the First Half of Fiscal 2023. Further, we continue to assess, and may possibly make changes to, our capital structure, ~~including borrowings~~which we may achieve by borrowing from additional credit facilities, ~~sales of~~selling debt or equity securities or ~~the repurchase of~~repurchasing additional shares of our stock in the future. Changes in our capital structure, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

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$325 Million Revolving Credit Agreement

On March 6, 2023, we amended the Revolving Credit Agreement to, among other things, mature in March 2028. As of July 29, 2023, we had borrowings of $48 million, issued standby letters of credit of $6 million, and availability of $266 million under the Revolving Credit Agreement.

We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the ~~U.S.~~ Revolving Credit Agreement are customary for those included in similar facilities entered into at the time we amended the ~~U.S.~~ Revolving Credit Agreement. During ~~the Third Quarter of~~ Fiscal ~~2022~~2023 and as of ~~October~~July 29, ~~2022,~~2023, no financial covenant testing was required pursuant to our ~~U.S.~~ Revolving Credit Agreement or the Prior Credit Agreement, as applicable, as the minimum availability threshold was met at all times. As of ~~October~~July 29, ~~2022,~~2023, we were compliant with all applicable covenants related to the ~~U.S.~~ Revolving Credit Agreement. Refer to Note 5 of our consolidated financial statements included in our Fiscal 2021 Form 10-K for additional information regarding our U.S. Revolving Credit Agreement, including details about affirmative and negative covenants.

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.

Operating Lease Commitments:

Refer to Note 4 in our unaudited condensed consolidated financial statements included in this report for additional information about our operating lease commitments as of ~~October~~July 29, ~~2022.~~2023.

Dividends:

On ~~December 5, 2022,~~August 30, 2023, our Board of Directors approved a cash dividend of ~~$0.55~~$0.65 per share payable on ~~January~~October 27, 2023 to shareholders of record as of the close of business on ~~January~~October 13, 2023. Although we have paid dividends each quarter since we became a public company in July 1960, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt instruments or

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applicable law limit our ability to pay dividends. We may borrow to fund dividends or repurchase shares

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in the short term subject to the terms and conditions of our credit facility, other debt instruments and applicable law. All cash flow from operations will not be paid out as dividends. For details about limitations on our ability to pay dividends, see the discussion of our U.S. Revolving Credit Agreement above and in Note 5 of our consolidated financial statements contained in our Fiscal 2021 Form 10-K.

~~Share Repurchases:~~

Refer to Note 6 in our unaudited condensed consolidated financial statements and Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds included in this report for additional information about our share repurchases in Fiscal 2022. As of the date of filing this Form 10-Q, there were no amounts remaining under the open market repurchase program with $50 million remaining under the Board of Directors’ authorization.

Capital Expenditures:

Our anticipated capital expenditures for Fiscal ~~2022,~~2023, including the ~~$32~~$31 million incurred in the First ~~Nine Months~~Half of Fiscal ~~2022,~~2023, are expected to be approximately ~~$50 million. Our ongoing~~$90 million, as compared to $47 million for Fiscal 2022. The planned increase in capital expenditures ~~primarily consist of costs~~includes spend associated with new brick and mortar locations and relocations and remodels of existing locations resulting in a year-over-year net increase of full price stores of approximately 25 by the end of Fiscal 2023. The spend associated with these brick and mortar locations represents about one-half of the planned capital expenditure amount for 2023. Additionally, we will continue with our investments in ~~information~~our various technology systems initiatives, including e-commerce ~~capabilities; direct~~and omnichannel capabilities, data management and analytics, customer data and insights, cybersecurity, automation including artificial intelligence and infrastructure. Finally, we anticipate spend associated with a multi-year Southeastern United States distribution center enhancement project to ~~consumer operations, including opening, relocating and remodeling locations; and facilities enhancements~~ensure best-in-class direct-to-consumer throughput capabilities for distribution centers and offices. Our capital expenditure amounts in future years will fluctuate from the amounts incurred in Fiscal 2022 and prior years depending on the investments we believe appropriate for that year to support future expansion of our ~~businesses.~~brands.

Other Liquidity Items:

Our contractual obligations as of ~~October~~July 29, ~~2022~~2023 except for the ~~increased operating lease commitments and increased~~decreased debt outstanding, ~~both~~ as discussed above, have not changed materially from the contractual obligations outstanding at January ~~29, 2022,~~28, 2023, as disclosed in our Fiscal ~~2021~~2022 Form 10-K. We have not entered into agreements which meet the SEC’s definition of an off balance sheet financing arrangement, other than operating leases, and have made no financial commitments or guarantees with respect to any unconsolidated subsidiaries or special purpose entities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

Our critical accounting policies and estimates are discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal ~~2021~~2022 Form 10-K. There have not been any significant changes to our critical accounting policies and estimates during the First ~~Nine Months~~Half of Fiscal ~~2022.~~2023. A detailed summary of significant accounting policies is included in Note 1 to our consolidated financial statements contained in our Fiscal ~~2021~~2022 Form 10-K.

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SEASONAL ASPECTS OF OUR BUSINESS

Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may vary significantly depending on the time of year. As a result, our quarterly operating results and working capital requirements fluctuate significantly from quarter to quarter. Typically, the demand for products for our larger brands is higher in the spring, summer and holiday seasons and lower in the fall season (the third quarter of our

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fiscal year). Thus, our third quarter historically has had the lowest net sales and net earnings compared to other quarters. Further, the impact of certain unusual or non-recurring items, economic conditions, our e-commerce flash clearance sales, wholesale product shipments, weather, acquisitions or other factors affecting our operations may vary from one year to the next. Therefore, due to the potential impact of these items, listed in the previous sentence, the COVID-19 pandemic’s more significant negative impact on the First Quarter of Fiscal 2021 than later quarters of Fiscal 2021 and the September 2022 acquisition of Johnny Was, we do not believe that net sales or operating income ~~by quarter~~ in ~~either~~the First Half of Fiscal ~~2021 or Fiscal 2022 are necessarily~~2023 is indicative of the expected proportion of amounts by quarter for future periods.

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 Fiscal ~~2021~~2022 Form 10-K. There have not been any material changes in our exposure to these risks during the First ~~Nine Months~~Half of Fiscal ~~2022~~2023 other than our ~~increased~~decreased exposure to interest rates resulting from our ~~increased borrowings.~~decreased borrowings relative to January 28, 2023.

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 were no changes in our internal controls over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act during the ~~Third~~Second Quarter of Fiscal ~~2022~~2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On September 19, 2022, we completed the acquisition of Johnny Was. We are in the process of integrating the Johnny Was business processes, information technology systems and other components into our operations and internal controls over financial reporting, and pursuant to the SEC’s guidance that an assessment of a recently acquired business may be omitted from the scope of the assessment in the year of acquisition, the scope of our assessment of the effectiveness of our internal controls over financial reporting as of the end of Fiscal 2022 will exclude Johnny Was.

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, employee relations matters, real estate, licensing arrangements, importing or exporting regulations, product safety requirements, taxation 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

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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. ~~We operate in a competitive and rapidly changing business environment.~~ Investors should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Fiscal ~~2021~~2022 Form 10-K, which could materially affect our business, financial condition or operating results.

Johnny Was, which we acquired during the Third Quarter of Fiscal 2022, is an affordable luxury, artisan-inspired bohemian apparel, accessories and home goods brand that is exposed to similar industry, macroeconomic, operational, cybersecurity and information technology, sourcing, regulatory and other general risks as our other businesses. However, as a result of our acquisition of Johnny Was, there may be heightened or additional risks to our business, financial condition and results of operations relative to those risk factors identified in our Fiscal 2021 Form 10-K that investors should consider in particular, as further described below:

~~Integration is a complex process that may be disruptive to our operations and/or impair our ability to recognize the anticipated benefits of the Johnny Was acquisition.~~ Integrating Johnny Was into our existing operations will be a complex, time-consuming and expensive process and may create challenges and adverse consequences for us. For example, efforts to integrate support functions, staffing and vendors may be ineffective; we may experience employee turnover, including key management and creative personnel within both Johnny Was and our existing businesses as a result of the transaction and integration process; we may be unable to establish and maintain acceptable standards, controls, procedures and policies consistent with our existing operations, including in key areas such as cybersecurity, digital marketing, compliance and accounting; relationships with customers of Johnny Was and/or our existing businesses may be impaired; and the integration process may divert the attention of our management team from other areas of our business. If we are not able to successfully integrate the Johnny Was business into our operations We operate in a ~~timely~~competitive and ~~effective manner, the anticipated benefits of the acquisition may not be realized fully or at all, or may take longer to realize than expected.~~

~~The significant indebtedness we incurred in connection with the Johnny Was acquisition could adversely affect us.~~ The purchase price for the acquisition of Johnny Was totaled $270 million in cash, subject to adjustment based on net working capital as of the closing date of the acquisition, and we utilized our U.S. Revolving Credit Agreement to finance a significant portion of the purchase price. As of October 29, 2022, we had $130 million of outstanding debt under the U.S. Revolving Credit Agreement. The indebtedness will increase our interest expense and exposure to rising interest rates and could, among other things, reduce our flexibility to respond torapidly changing business environment and economic conditions, to fund working capital, capital expenditures or other acquisitions or to service general corporate purposes. Furthermore, the indebtedness under the U.S. Revolving Credit Agreement bears interest at variable interest rates, and if interest rates increase, together with the current indebtedness, we will be subject to higher debt service requirements, which could adversely affect our cash flows, business and operations.

~~Johnny Was’ sourcing concentration in China exposes us to heightened risks associated with trade regulation.~~ In Fiscal 2021, 38% of our products were sourced from China. During the 12 months ended October 29, 2022, Johnny Was sourced more than 90% of its products from a limited number of suppliers in China. As a result of our Johnny Was acquisition, we have heightened concentration risks relating to any potential U.S. trade policies or tariffs regarding China, U.S. Customs and Border Protection actions relating to goods imported from China or other factors such as consumer perception of environmental or social compliance within China.

~~Johnny Was’ geographic concentration heightens our exposure to certain regional risks.~~ As of October 29, 2022, of Johnny Was’ 66 retail stores, 18 were located in California. In addition, Johnny Was wholesale sales have geographic concentration in the Sun Belt, including in resort destinations, where our Tommy Bahama, Lilly Pulitzer and Southern Tide businesses already have heightened concentrations. As a result of our Johnny Was acquisition, we have heightened exposure to factors that impact these regions, including general economic conditions, weather patterns, natural disasters, public health crises, changing demographics and other factors.

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~~We recorded a significant amount of goodwill and intangible assets in connection with the Johnny Was acquisition, which could result in impairment charges that adversely impact our financial results.~~ Our preliminary allocation of the purchase price for the Johnny Was acquisition, which will be revised during the one year allocation period, as appropriate, resulted in us recording $227 million in goodwill and intangible assets as of October 29, 2022. Goodwill and intangible assets are subject to periodic impairment testing, which requires us to make estimates about future performance and cash flows that are inherently uncertain and can be affected by numerous factors, including changes in economic conditions, income tax rates, interest rates, our results of operations and competitive conditions in the industry. It is possible that we could have an impairment charge for intangible assets or goodwill associated with Johnny Was in future periods if, among other things, economic conditions decline, our strategies for Johnny Was change, the results of operations of Johnny Was are less than anticipated at the time of acquisition, enterprise values and market multiples of comparable businesses decline or interest rates increase. A future impairment charge for intangible assets or goodwill could be material and adversely impact our consolidated financial statements or results of operations.

~~Johnny Was’ portfolio of retail stores increases our long-term lease commitments.~~ As of October 29, 2022, Johnny Was operated 66 of the total 290 brick-and-mortar locations within our enterprise. Many of the Johnny Was retail stores are located in centers in which one of our other brands also operates a retail store and/or restaurant. In connection with the Johnny Was acquisition, we assumed more than $50 million in lease liabilities under Johnny Was’ leases. Any deterioration in consumer sentiment relating to shopping at bricks-and-mortar retail locations, or the financial condition of one or more of the centers in which Johnny Was operates, could negatively impact our financial performance, result in impairment of operating lease assets and/or other long-lived assets or otherwise have a material adverse effect on our results of operations or financial condition.

~~Additional~~additional risks and uncertainties that we currently consider immaterial or not presently known to us may also adversely affect our business. The risks described in our Fiscal 2022 Form 10-K are not the only risks facing our company.

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

(a)	During the ~~Third~~Second Quarter of Fiscal ~~2022,~~2023, we did not make any unregistered sales of equity securities.

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(c)	During the ~~Third~~Second Quarter of Fiscal ~~2022,~~2023, we repurchased the following shares of our common stock:


				Total Number of	Dollar Value				Total Number of	Dollar Value
				Shares	(000s) of Shares				Shares	(000s) of Shares
		Average		Purchased as	That May Yet be		Average		Purchased as	That May Yet be
	Total Number	Price		Part of Publicly	Purchased Under	Total Number	Price		Part of Publicly	Purchased Under
	of Shares	Paid per		Announced Plans	the Plans or	of Shares	Paid per		Announced Plans	the Plans or
Fiscal Month	Purchased	Share		or Programs	Programs	Purchased	Share		or Programs	Programs
August (7/31/22 - 8/27/22)	41,954	$	104.69	41,954	$ 64,586
September (8/28/22 - 10/1/22)	56,543	$	94.81	56,543	$ 59,225
October (10/2/22 - 10/29/22)	47,727	$	91.57	47,727	$ 54,855
May (4/30/23 - 5/27/23)						47,034	$	105.12	47,034	$ 45,056
June (5/28/23 - 7/1/23)						84,228	$	99.36	84,228	$ 36,687
July (7/2/23 - 7/29/23)						147,719	$	105.44	147,719	$ 31,052
Total	146,224	$	96.59	146,224	$ 54,855	278,981	$	103.55	278,981	$ 31,052

~~As disclosed in our Quarterly Report on Form 10-Q for the Third Quarter of Fiscal 2021, and in subsequent filings, on~~On December 7, 2021, our Board of Directors authorized us to spend up to $150 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.

Pursuant to the Board of Directors’ authorization, we entered into a ~~$100~~$20 million open market stock repurchase program (Rule 10b5-1 plan) to acquire shares of our stock, under which we ~~repurchased:~~

●

~~91,000~~repurchased 186,000 shares ~~of our stock for $8 million in the Fourth Quarter of Fiscal 2021;~~

●

~~491,000 shares of our stock for $43 million in the First Quarter of Fiscal 2022;~~

●

~~339,000 shares of our stock for $30 million in the Second Quarter of Fiscal 2022; and~~

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●

~~146,000 shares of our stock for $14 million in the Third Quarter of Fiscal 2022, which are included in the table above; and~~

●

~~47,000 shares of our stock for $5 million in the Fourth Quarter of Fiscal 2022, which completed the purchases pursuant to the $100 million open market stock repurchase program.~~

our common stock for $19 million during the Second Quarter of Fiscal 2023. After considering the repurchases ~~through~~during the ~~end of the Third~~Second Quarter of Fiscal ~~2022,~~2023, there was $5$1 million remaining under the open market repurchase program and ~~$55~~$31 million remaining under the Board of Directors’ authorization as of ~~October~~July 29, ~~2022. As~~2023.

Subsequent to July 29, 2023, we repurchased an additional 10,000 shares of ~~the date of filing this Form 10-Q, there were no amounts remaining under~~our common stock for $1 million that completed the open market repurchase program ~~and $50 million remaining under the Board~~as of ~~Directors’ authorization.~~August 31, 2023.

Also, we have certain stock incentive plans as described in Note 8 to our consolidated financial statements included in our Fiscal ~~2021~~2022 Form 10-K, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the vesting of shares of our stock. During the ~~First~~Second Quarter of Fiscal ~~2022,~~2023, we repurchased $3$10 million of shares from employees, ~~with no such repurchases of shares from employees~~which are included in the ~~Second Quarter of Fiscal 2022 or Third Quarter of Fiscal 2022.~~table above.

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~

~~None~~

~~ITEM 4. MINE SAFETY DISCLOSURES~~

~~None~~

ITEM 5. OTHER INFORMATION

~~None~~During the Second Quarter of Fiscal 2023, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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ITEM 6. EXHIBITS


~~2.1~~		Unit Purchase Agreement, dated September 19, 2022 by and among JW Holdings, LLC, the sellers named therein, Oxford Industries, Inc. and Endeavour Capital Fund VI, L.P. as sellers’ representative (filed as Exhibit 2.2 to the Company’s Form 8-K filed on September 19, 2022)
3.1		Restated Articles of Incorporation of Oxford Industries, Inc. (filed as Exhibit 3.1 to the Company’s Form 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 8-K filed on August 18, 2020)
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.


~~December 8, 2022~~September 1, 2023	OXFORD INDUSTRIES, INC.

	(Registrant)

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

5245


	Johnny Was acquisition
Cash and cash equivalents	$	7,288
Receivables		10,258
Inventories ⁽¹⁾		23,283
Prepaid expenses		4,417
Property and equipment		21,212
Intangible assets		134,640
Goodwill		92,457
Operating lease assets		54,485
Other non-current assets		656
Accounts payable, accrued expenses and other liabilities		(30,743)
Non-current portion of operating lease liabilities		(47,009)
Purchase price	$	270,944