Bolstered by robust demand for its Lilly Pulitzer and Tommy Bahama brands, delivered a 10.1 percent topline gain and a 22 percent increase to profits from continuing operations in the second quarter.
On an unadjusted basis, the net loss came in at $2 million, or 12 cents per share, which compares with net income of $15.1 million, or 92 cents, in the same period last year. Sales for quarter rose to $250.7 million from $227.6 million in the prior year.
Net earnings from continuing operations were $21.1 million, or $1.28 per share, which compares to $17.3 million, or $1.05 per share, in the prior year.
The strong results prompted the company to raise its full-year guidance and it now expects net sales in the $975 million to $990 million range and adjusted earnings per share in the range of $3.55 to $3.70.
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In a conference call following the release of the results Wednesday afternoon, Thomas C. Chubb III, chairman and chief executive officer, called the results at Lilly Pulitzer “remarkable.” The brand posted a 41 percent comparable-store sales gain, and there were also gains in the wholesale business. The brand now operates 33 stores, up from 26 last year, and Chubb said the company will “continue to open stores…in new and existing markets.” That will include units in Dallas, Destin, Fla., and Richmond, Va., next year, he said.
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In addition to brick and mortar, the brand is also growing its online business. In fact, Chubb said e-commerce “continues to be the strongest channel of distribution for Lilly Pulitzer,” he said.
Turning to Tommy Bahama, the brand posted a 3 percent comparable-store sales gain, which was partially offset by a decrease in wholesale sales. Chubb said the men’s business, which is the “anchor” for the brand, posted strong results, while women’s sales were “softer.” Over the part year, the company has changed its head of women’s design and the changes in merchandise direction will be evident in spring 2016.
“Women’s is still less than one-third of our business and we believe the opportunity is much larger,” Chubb said.
Tommy Bahama’s wholesale business has been impacted by the “very challenging” environment faced by specialty stores, where the brand has its primary exposure, Chubb said. “That presents some headwinds,” he said. The department store channel is performing better, he added.
Tommy Bahama’s international business, while still operating at a loss, is seen as another growth area. The company internally operates its divisions in Canada and Australia where the business is “successful and profitable.” In Asia, the brand is exiting secondary markets and is focusing its efforts on Japan, he said. “And we’re exploring partnering in select markets around the world,” he said, pointing out that that was the way the brand originally entered Canada and Australia before retaining control of those regions.
While the story was strong for Lilly Pulitzer and Tommy Bahama, the second-quarter figures were “partially offset by a sales decline at Lanier Clothes,” the company said. Chubb said that division is “well run and adaptable,” and while sales dropped 14 percent, gross margin and operating margins increased, and some upcoming projects, which he did not detail, are expected to benefit the division in the future.
Chubb also noted that the divestiture of the Ben Sherman brand, announced at the end of March, was completed in the second quarter. “This supports our long-term plan, which is to acquire another carefully selected lifestyle brand or two.”