OXM 10-K & 10-Q changes, risk factors and insider trading

We are a consumer products company and are highly dependent on consumer discretionary spending and retail traffic patterns, particularly in the United States. The demand for apparel products changes as regional, domestic and international economic conditions change and may be significantly impacted by trends in consumer confidence and discretionary consumer spending patterns. These trends may be influenced by employment levels; recessions; persistent inflationary pressures and volatile and/or elevated interest rates; rising fuel and energy costs; tax rates; personal debt levels; savings rates; stock market and housing market volatility; shifting social ideology; concerns about the political and economic climate, including with respect to a potential global recession; uncertainty regarding rapidly evolving trade and tariff policy; and general uncertainty about the future. The factors impacting consumer confidence and discretionary consumer spending patterns are outside of our control and difficult to predict, and, often, the apparel industry experiences longer periods of recession and greater declines than the general economy.

Recently,In therecent U.S.years, economyconsumer hasconfidence and discretionary spending have been impacted by elevateduncertainty in the U.S. economic environment, including as a result of fluctuating inflation and foreign currency exchange rates, whichsupply haschain created a complexchallenges and challengingincreased retail environment that has affected consumer spendingtariffs and consumer preferences. Additionally, increased trade restrictions or tariffs on products imported into the United States,States and anyongoing uncertainty regarding and evolving judicial and regulatory developments affecting U.S. trade policy, resulting supplyin chaina disruptions, inflationary effects or countermeasures taken by other countries, could negatively impact consumer confidencecomplex and thechallenging macroeconomicretail environment. A decline in consumer confidence or change in discretionary consumer spending could reduce our sales, increase our inventory levels, result in more promotional activities and/or lower our gross margins, any or all of which may adversely affect our business and financial condition.

Competition in the apparel industry is particularly enhanced in the digital marketplace for our e-commerce businesses, where there are new entrants in the market, greater pricing pressurepressure, rapid technological developments and heightened customer expectations and competitive pressure related to, among other things, customer engagement, digital functionality and shopping experience, delivery speed, shipping charges and return privileges. In addition, fastthe adoption of artificial intelligence-enabled tools across the industry, including personalized marketing, artificial intelligence-driven shopping assistants, recommendation engines, dynamic pricing and demand forecasting capabilities, has further raised consumer expectations for relevance, personalization, speed and convenience. Competitors that are able to more effectively leverage these technologies may gain advantages in customer acquisition, engagement and retention, and our failure to keep pace with these developments or to make the significant and ongoing investments in technology, talent and infrastructure necessary to do so could adversely affect our competitive position, reduce the visibility of our brands or limit our ability to communicate our brand messaging directly to consumers. Fast fashion, value fashion and off-price retailers, as well as the more recent declines in spending within the consumer and retail sector, have contributed to additional promotional pressure. These and other competitive factors within the apparel industry may result in reduced sales, increased costs, lower prices for our products and/or decreased margins.

We believe that our ability to compete successfully is directly related to our proficiency in foreseeing changes and trends in fashion and consumer preference and presenting appealing products for consumers when and where they seek them. Although certain of our products carry over from season to season, the apparel industry is subject to rapidly changing fashion trends and shifting consumer expectations. TheThere can be no assurance that we will be able to successfully evaluate and adapt our products to align with evolving trends. Additionally, the increasing shift to digital brand engagement and social media communication, as well as the attempted replication of our products by competitors, presents emerging challenges for our business. The apparel industry is also impacted by changing consumer preferences regarding spending categories generally, including shifts away from traditional consumer product spending and towards “experiential” spending and sustainable products. There can be no assurance that we will be able to successfully evaluate and adapt our products to align with evolving trends.spending. Any failure on our part to develop and market appealing products could harm the reputation and desirability of our brands and products and/or result in weakened financial performance.

Our sales volume and operations and the operations of third parties on whom we rely, including our suppliers, vendors, licensees and wholesale customers, may be adversely affected by unseasonable or severe weather conditions or other climate-related events, natural or man-made disasters, hurricanes, public health crises, pandemics, war, cyberattacks terrorist attacks, including heightened security measures and responsive military actions, or other catastrophes which may cause consumers to alter their purchasing habits or result in a disruption to our operations, such as the damage to, and temporary closure of, our Tommy Bahama restaurant and retail store in Sarasota, Florida, our distribution center in Lyons, Georgia and several of our other retail stores in Florida and the Southeast due to Hurricanes Helene and Milton in September2024 and October 2024, the destruction of our Tommy Bahama Marlin Bar in Lahaina, Hawaii by wildfires in August 2023 and the temporary closure of our Tommy Bahama restaurant and retail store in Naples, Florida due to Hurricane Ian in September 2022.2023. Our business may also be adversely affected by instability, disruption or destruction, regardless of cause. These events may result in closures of our retail stores, restaurants, offices or distribution centers and/or declines in consumer traffic, which could have a material adverse effect on our business, results of operations or financial condition. Because of the seasonality of our business, the concentration of a significant proportion of our retail stores and wholesale customers in certain geographic regions, including a resort and/or coastal focus for most of our lifestyle brands, and the concentration of our sourcing and distribution center operations, the occurrence of such events could disproportionately impact our business, financial condition and operating results. While we maintain insurance policies intended to cover losses arising from such events, certain events or losses may not be covered by our insurance policies, we may experience increased insurance premiums or deductibles under our policies as a result of such events and there is no assurance that coverage for such events will continue to be available, including at costs or on terms acceptable to us, any or all of which could negatively impact our financial condition.

TheOngoing geopolitical conflicts and related disruptions, including the ongoing war between Russia and UkraineUkraine, the U.S.-Iran conflict and other conflicts in the ongoingMiddle war between Israel and HamasEast have adversely affected the global economy and resulted in economic sanctions, geopolitical instabilityinstability, fluctuations in the price of oil and market disruption. Although we do not have operations or generate revenues in the impacted regions, the geopolitical tensions related to the wars could result in broader impacts that expand into other markets, cyberattacks, increased freight costs, supply chain and logistics disruptions, including shipping disruptions in the Red Sea region, and lowercould negatively impact consumer demand,sentiment and discretionary spending, any of which could have a material adverse effect on our business and operations.

The improper or detrimental actions of a licensee or wholesale customer, including a third party distributor in an international market, or for example, the operator of the Tommy Bahama Miramonte Resort & Spa, which opened in late 2023, could also significantly impact the perception of our brands. While we enter into comprehensive license and similar collaborative agreements with third party licensees covering product design, product quality, brand standards, sourcing, corporate responsibility, distribution, operations, manufacturing and/or marketing requirements and approvals, there can be no guarantee our brands will not be negatively impacted through our association with products or concepts outside of our core apparel products and by the market perception of the third parties with whom we associate. In addition, we cannot always control the marketing and promotion of our products by our wholesale customers, and actions by such parties could diminish the value or reputation of one or more of our brands and have an adverse effect on our sales, gross margins and business operations.

The appeal of our brands may also depend on the perceived relevance and success of our initiatives related to corporate responsibility and our commitments to operating our business in a responsible fashion. Risks related to corporate responsibility include certain stakeholder focus on social and environmental sustainability matters, including forced labor, chemical use, energy and water use, packaging and waste, animal welfare, land use and related marketing claims. We may also be required to incur substantial costs to comply with the amalgamation of differing or conflicting state, federal or international laws or regulations or the rules of government agencies requiring disclosure of risks and initiatives related to corporate responsibility and the collection, certification and disclosure of operational data,initiatives, and any failure to comply with such requirements could result in fines, penaltiesfines or negative public perception of our brandspenalties or drive decisions on whether we can continue or expand our business in certain markets. We may also face pressure from certain stakeholders to voluntarily expand our disclosures, make commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risks. The metrics we disclose may not meet stakeholder expectations and may impact our reputation and the value of our brands, and a failure to achieve progress on our metrics on a timely basis, or at all, could adversely affect our business and financial performance.

One of our key long-term initiatives over the last several years has been to grow our branded businesses through distribution strategies that allow our consumers to access our brands whenever and wherever they choose to shop. Our ability to anticipate and transform our business in response to the manner in which consumers seek to transact business and access products requires us to introduce new retail, restaurant and other concepts in suitable locations; anticipate and implement innovations in sales and marketing technology to align with our consumers’ shopping preferences; invest in appropriate digital and other technologies; establish the infrastructure necessary to support growth; and maintain brand specific websites and mobile applications that offer the functionality and security customers expect;expect. andSuccessful effectivelygrowth enhanceof our advertisingbusiness andis marketingalso activities, including our social media presence, to maintain our current customers and attract and introduce new consumerssubject to our brandsability to deliver marketing and offerings.other strategies that successfully drive key performance indicators including new customer acquisition, customer retention, customer conversion and average order value.

For the last several years, the retail apparel market has been evolving very rapidly in ways that are disruptive to traditional fashion retailers. These changes included declines in bricks and mortar retail traffic; entry into the fashion retail space by large e-commerce retailers and others with significant financial resources and enhanced distribution capabilities; increased costs to attract and retain consumers; increased investment in technology and multi-channel distribution strategies by large, traditional bricks and mortar and big box retailers; ongoing emphasis on off-price and fast fashion channels of distribution, in particular those who offer brand label products at clearance; and increased appeal for consumers of products that incorporate sustainable materials and processes in the supply chain and/or otherwise reflect their social or personal values. In response, fashion retailers and competing brands have increasingly offered greater transparency for consumers in product pricing and engaged in increased promotional activities, both online and in-store. TheseThe trendsincreasing accelerateduse inof recentartificial yearsintelligence-enabled shopping assistants, recommendation engines and areother likelyautomated toconsumer continuetools tohave evolvealtered how consumers discover, evaluate and purchase products online. These technologies, which may be operated by third parties such as search platforms, digital marketplaces or other technology providers, may influence product recommendations, pricing visibility and purchasing decisions in ways that mayfavor notcompeting yetbrands beor evident.otherwise reduce the visibility of our brands or limit our ability to communicate our brand messaging directly to consumers.

We have been implementing strategic initiatives across our portfolio of lifestyle brands to improve operating margins, which may include controlling overhead and operating expenses and refining our marketing strategies and investments to efficiently attract customers in a crowded and constantly evolving marketplace. One component of these initiatives is a focus on improving the operating performance and long-term growth prospects of Johnny Was, including through driving retail store productivity, elevating the customer experience and enhancing marketing and merchandising tactics to drive growth across sales channels. We are also implementing certain of these measures, particularly those relating to merchandising effectiveness, within our other brands, which may magnify the risks of this initiative across our enterprise. A strategic initiative of this nature is inherently challenging and faces significant potential risks, with the current macroeconomic environment and continuing changes in consumer preferences magnifying the challenges facing our brands. We cannot provide assurances that we will successfully execute this initiative or that our strategies will achieve long-term sustainable sales and operating margin expansion. In addition, investments we make in technology, marketing, infrastructure, retail stores and restaurants, office and distribution center facilities, personnel and elsewhere may not yield the full benefits we anticipate, and sales growth may be outpaced by increases in operating costs, putting downward pressure on our operating margins and adversely affecting our results of operations.

Many factors, such as economic conditions, fashion trends, consumer preferences, the financial condition of our wholesale customerscustomers, uncertainty regarding rapidly evolving trade and tariff policies, and weather, make it difficult to accurately forecast demand for our products. In order to meet the expected demand for our products in a cost-effective manner, we make commitments for production several months prior to our receipt of goods and almost entirely without firm commitments from our customers. Depending on the demand for our products, we may be unable to sell the products we have ordered or that we have in our inventory, which may result in inventory markdowns or the sale of excess inventory at discounted prices and through off-price channels. These events could significantly harm our operating results and impair the image of our brands. Conversely, if we underestimate the timing or extent of demand for our products or if we are unable to access our products when we need them, for example due to a third party manufacturer’s inability to source materials or produce goods in a timely fashion or as a result of delays in the delivery of products to us, we may experience inventory shortages, which mightmay result in lost sales, unfilled orders,orders and negatively impacted customer relationships,relationships. Risks resulting from delays in product delivery and availability, including diminished brand loyalty,loyalty anyand demand for our products, may be magnified by the seasonality of whichour couldbusiness, harmshifts in consumer preferences toward newness and fashion product categories and the importance to our business.business These risks relating to inventory may also escalate as ourof direct to consumer sales, for which we do not have any advance purchase commitments, continue to increase as a proportion of our consolidated net sales.commitments.

Our retail store and restaurant leases generally represent long-term financial commitments, with substantial costs at lease inception for a location’s design, leasehold improvements, fixtures and systems installation and recurring fixed costs. On an ongoing basis, we review the financial performance of our retail and restaurant locations in order to determine whether continued operation is appropriate. Even if we determine that it is desirable to exit a particular location, we may be unable to close an underperforming location due to continuous use clauses and/or because negotiating an early termination would be cost prohibitive. In addition, due to the fixed-cost structure associated with these operations, negativeNegative cash flows at underperforming stores or the closure of a retail store or restaurant could result in impairment of leasehold improvements, impairment of operating lease assets and/or other long-lived assets, severance costs, lease termination costs or the loss of working capital, which could adversely impact our business and financial results. Furthermore,Any closure of retail stores and/or restaurants, decision not to open new retail store and/or restaurant locations or reduced investment in retail stores and/or restaurants could adversely affect consumer perception of our brands and result in reduced sales and missed customer acquisition opportunities, negatively impacting our financial performance. In addition, as each of our leases expire and as competition and rental rates for prime retail and restaurant locations continues to accelerate, as we have experienced in recent years, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, including as a result of shifts in how shopping center operators seek to merchandise the particular center’s lineup, which could force us to close retail stores and/or restaurants in desirable locations.

Furthermore, a deterioration in the financial condition of shopping center operators or developers could, for example, limit their ability to invest in improvements and finance tenant improvements for us and other retailers and lead consumers to view these locations as less desirable. In addition, if our e-commerce businesses continue to grow, they may do so in part by attracting existing customers, rather than new customers, who choose to purchase products from us online through our websites rather than from our physical stores, thereby reducing the financial performance of our bricks and mortar operations, which could have a material adverse effect on our results of operations or financial condition.

Our levels of debt vary as a result of the seasonality of our business, investments in our operations, acquisitions we undertake and working capital needs. Our debt levels may increase or decrease from time to time under our existing facility or potentially under new facilities, or the terms or forms of our financing arrangements may change. Our indebtedness under the U.S. Revolving Credit AgreementAgreement, which matures in March 2028, includes certain obligations and limitations, including the periodic payment of principal, interest and unused line fees, maintenance of certain covenants and certain other limitations. The negative covenants in the U.S. Revolving Credit Agreement limit our ability to, among other things, incur debt, guaranty certain obligations, incur liens, pay dividends, repurchase common stock, make investments, sell assets or make acquisitions. These obligations and limitations may increase our vulnerability to adverse economic and industry conditions, place us at a competitive disadvantage compared to any competitors that may be less leveraged and limit our flexibility in carrying out our business plans and planning for, or reacting to, change.

We generate a material percentage of our wholesale sales, which was 19%18% of our net sales in Fiscal 2024,2025, from a few key customers. Although our largest customer only represented less than 4%5% of our consolidated net sales in Fiscal 2024,2025, the failure to increase or maintain our sales with our key customers as much as we anticipate would have a negative impact on our growth prospects and any decrease or loss of these customers’ business could result in a decrease in our net sales and operating income if we are unable to capture these sales through our direct to consumer operations or other wholesale accounts. Over the last several years, department stores and other largemulti-brand retailers have faced increased competition from online competitors, including AI-driven curation and discovery tools, declining sales and profitability and tightened credit markets, resulting in store closures, bankruptcies and financial restructurings.restructurings, any of which, if faced by our customers, could negatively impact our net sales and profitability. For example, during Fiscal 2025, Saks Global and one other of our wholesale customers filed for bankruptcies that resulted in a significant increase in our provision for credit losses. Restructuring of our customers’ operations, continued store closures or increased direct sourcing by customers could negatively impact our net sales and profitability.profitability and result in further concentration of our wholesale business in a small number of key customers. Furthermore, continued challenges and contraction in the multi-brand and specialty store market may result in the loss of key channels for us to showcase our products and grow market awareness of our brands without significant investments in marketing or new bricks and mortar locations.

We collect, use, store and transmit sensitive and confidential business information and personal information of our customers, employees, suppliers and others as an ongoing part of our business operations, and we are regularly subject to attempts by attackers to gain unauthorized access to our networks, systems and data, or to obtain, change or destroy confidential information. Cybersecurity attacks continue to become increasingly sophisticated, and threat actors are continuously deploying new techniques, including through the use of artificial intelligence,AI, to attempt to penetrate our network security and misappropriate or compromise our assets or disrupt our systems. In addition, customers may use devices or software that are beyond our control environment to purchase our products, which may provide additional avenues for attackers to gain access to confidential information. Additionally, the security systems of businesses that we acquire could pose additional risks to us, such as those related to the collection, use, maintenance and disclosure of data, or present other cybersecurity vulnerabilities.

Despite our implementation of security measures, if an actual or perceived data security breach occurs, whether as a result of cybersecurity attacks, computer viruses, vandalism, ransomware, human error or otherwise, or if there are perceived vulnerabilities in our systems, the image of our brands and our reputation and credibility could be damaged, and, in some cases, our continued operations may be impaired or restricted. Ongoing and increasing costs to enhance cybersecurity protection and prevent, eliminate or mitigate vulnerabilities are significant. Although we have business continuity plans and other safeguards in place, our operations may be adversely affected by an actual or perceived data security breach. Costs to resolve any litigation or to investigate and remediate any actual or perceived breach could result in significant financial losses and expenses, as well as lost sales, and there is no assurance that our existing cyber liability insurance policies will provide coverage for all losses that may result from a data security breach or that sufficient coverage will continue to be available in the future. For example, the SEC recently adopted rules requiring the disclosure of cybersecurity incidents that we determine to be "material," to be made within four business days of such determination, which can be complex, requiring a number of assumptions based on several factors. It is possible that the SEC may not agree with our determinations, which could result in fines, civil litigation or damage to our reputation.WhileWhile we continue to evolve and modify our business continuity plans, there can be no assurance in an escalating threat environment that they will be effective in avoiding disruption and business impacts.

As part of our routine operations, we also contract with third party service providers, including cloud service providers, to store, process and transmit personal information of our customers and employees. As we pursue operational efficiencies and leverage best practices across our brands, our brands may come to rely on a more concentrated group of service providers, including for critical technology systems such as our point-of-sale and e-commerce platforms. Although we may contractually require that these providers implement reasonable security measures, we cannot guarantee that a security breach will not occur at their location or within their systems. Breaches of confidential information stored or used by our third party service providers or disruptions in their systems may expose us to the same risks as a breach of our own systems, including negative publicity, potential out-of-pocket costs and adverse effects on our business and customer relationships.

In addition, the regulatory environment governing our use of individually identifiable data is complex, and compliance with new and modified state, federal and international privacy and security laws may require us to modify our operations and/or incur costs to make necessary systems changes and implement new administrative processes, which may include deploying additional personnel and protection technologies, training employees and engaging third party experts and consultants. Any failure to comply with applicable laws relating to privacy, data security or data breaches (including SEC and other disclosure and reporting requirements) could result in fines, civil litigation or damage to our reputation. In addition, because we process and transmit payment card information, we are subject to the payment card industry data security standard and card brand operating rules, which provide for a comprehensive set of rules relating to the retention and/or transmission of payment card information. If we or our third party service providers do not comply with the applicable standards, we may be subject to fines or restrictions on our ability to accept payment cards, which could have a material adverse effect on our operations.

We source substantially all of our products from non-exclusive, third party producers located in foreign countries. Although we place a high value on long-term relationships with our suppliers, we do not have long-term supply contracts but instead conduct business on an order-by-order basis. Therefore, we compete with other companies for the production capacity of independent manufacturers. We also depend on the ability of these third party producers to secure a sufficient supply of raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity, and in some cases, the products we purchase and the raw materials that are used in our products are available only from one source or a limited number of sources. Although we monitor production in third party manufacturing locations, we cannot be certain that we will not experience operational difficulties with our manufacturers, such as the reduction of available production capacity, errors in complying with product specifications, insufficient quality control, failures to meet production deadlines or increases in manufacturing costs. In addition, we may experience disruptions in our supply chain as we continue to diversify the jurisdictions from which we source products and onboard new sourcing agents and suppliers, including in response to increased trade restrictions and tariffs. Any such difficulties may impact our ability to deliver quality products to our customers on a timely basis, increase our costs, negatively impact our customer relationships and result in lower net sales and profits.

We and our third party suppliers rely on the availability of raw materials at reasonable prices. The principal fabrics used in our business are cotton, silk, linen, polyester, cellulosic fibers, leather, and other natural and man-made fibers, or blends of two or more of these materials. The prices paid for these fabrics depend on the market price for raw materials used to produce them. The cost of the materials and components that are used in our manufacturing process, such as oil-related commodity prices and other raw materials, such as dyes and chemicals, and other costs, can fluctuate. We historically have not entered into any futures contracts to hedge commodity prices. In recent years, we have experienced increasedfluctuations in the costs of raw materials, including cotton, that impacted our production costs.costs, Theseand we may experience further price increases couldfor continueraw materials in future years.

Employment costs represented approximately 40%42% of our consolidated SG&A in Fiscal 2024,2025, and we have seen increases in the cost of labor in our retail, restaurant and distribution center operations as well as at many of our suppliers in recent years. Employment costs are affected by labor markets, as well as various federal, state and foreign laws governing matters such as minimum wage rates, overtime compensation and other requirements. In addition, in recent years, there has been significant political pressure and legislative action to increase the minimum wage rate in many of the jurisdictions in which we operate. We have also experienced increasesfluctuations in freight costs and distribution and logistics functions and may continue to see such cost and capacity pressures. Although we attempt to mitigate the effect of increases in our cost of goods sold, labor costs, occupancy costs, other operational costs and SG&A items through sourcing initiatives and by selectively increasing the prices of our products, we may be unable to fully pass on these costs to our customers, and material increases in our costs may reduce the profitability of our operations and/or adversely impact our results of operations.

Our operations and retail and restaurant locations are heavily concentrated in the United States and certain geographic areas within the United States, including Florida, California, Texas and Hawaii for our Tommy Bahama operations; Florida for our Lilly Pulitzer operations; CaliforniaCalifornia, Texas and Florida for our Johnny Was operations; and Florida for our Emerging Brands operations. Additionally, the wholesale sales for our businesses are also geographically concentrated, including in geographic areas where we have concentrations of our own retail store and restaurant locations. Due to these concentrations, we have heightened exposure to factors that impact these regions, including general economic conditions, weather patterns, climate-related conditions, natural disasters, public health crises, changing demographics and other factors. In addition, our brands are associated with the resort lifestyle, and many of our retail stores and restaurants are located in destinations that are dependent on travel and tourism. Any decrease in resort travel, including as a result of current macroeconomic conditions,conditions or geopolitical considerations, could negatively impact our sales and results of operations.

Due to our international sourcing activities, we are exposed to risks associated with changes in the laws and regulations governing the importing and exporting of apparel products into and from the countries in which we operate. These risks include imposition of antidumping, countervailing or other duties, tariffs, taxes or quota restrictions; government-imposed restrictions as a result of public health issues; changes in customs procedures for importing apparel products; restrictions on the transfer of funds to or from foreign countries; and the issuance of sanctions and trade orders. Any of these factors may disrupt our supply chain, andincrease weour mayproduct be unable to offset any associated cost increases by shifting production to suitable manufacturers in other jurisdictions in a timely manner or at acceptable prices, and future regulatory actions or changes in international trade regulation maycosts, provide our competitors with a material advantage over us or render our products less desirable in the marketplace.

We are subject to an increasing number of evolving and stringent standards, laws and other regulations, including those relating to labor, employment, privacy and data security, consumer protection, marketing, health, product performance, content and safety, anti-bribery, taxation, customs, logistics and other operational matters. These laws and regulations, in the United States and abroad, are complex and often vary widely by jurisdiction. As we expand to new markets, including, for example, Tommy Bahama’s expansion into New Zealand startingthat latebegan in Fiscal 2024, we may face challenges ensuring that we are currently or will in the future be compliant with all applicable laws and regulations in all the states and countries in which we operate. In addition to the local laws of the foreign countries in which we operate, we are subject to certain anti-corruption laws, including the U.S. Foreign Corrupt Practices Act. If any of our international operations, or our employees or agents, violates such laws, we could become subject to sanctions or other penalties that could negatively affect our reputation, business and operating results.

We have seen many new laws and regulations going into effect or being proposed in recent years, including in areas such as consumer and data privacy, matters related to corporate responsibility marketing and trade. In particular, the regulatory environment governing the use of AI technologies is rapidly developing, and new laws and regulations may impose additional compliance obligations, restrict certain uses of AI technologies or require disclosures regarding our use of AI in consumer-facing or internal applications. We may be required to make significant expenditures and devote significant time and management resources to comply with any existing or future laws or regulations, and a violation of applicable laws and regulations by us, or any of our suppliers or licensees, may restrict our ability to import products, require a recall of our products, lead to fines or otherwise increase our costs, negatively impact our ability to attract and retain employees or materially limit our ability to operate our business. In addition, regardless of whether any allegations of violations of the laws and regulations governing our business are valid or whether we ultimately become liable, we would incur time and costs, as well as disruption to management focus, in addressing these allegations and may be materially affected by negative publicity as a result of such allegations.

As a multi-national apparel company, we are subject to income taxes in the United States and various foreign jurisdictions. We record our income tax liability based on an analysis and interpretation of local tax laws and regulations, which requires a significant amount of judgment and estimation. In addition, we may from time to time modify our operations in an effort to minimize our consolidated income tax expense. Our effective income tax rate in any particular period or in future periods may be affected by a number of factors, including a shift in the mix of revenues, income and/or losses among domestic and international sources during a year or over a period of years; changes in tax laws, regulations or international tax treaties; the outcome of income tax audits; the difference between the income tax deduction and the previously recognized income tax benefit related to the vesting of equity-based compensation awards; and the resolution of uncertain tax positions, any of which could adversely affect our effective income tax rate and profitability. Further, changes to U.S. and foreign tax laws, as a result of the recent U.S. presidential administration change or otherwise, and compliance with new tax laws could have a material adverse effect on our tax expense, cash flows and operations. Although we cannot predict whether or in what form these proposals will pass, several current proposals, if enacted into law, could have an adverse impact on our effective tax rate and income tax expense.

The carrying values of our goodwill and intangible assets, including those recorded in connection with our acquisition of a business, are subject to periodic impairment testing. Impairment testing of goodwill and intangible assets 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, our results of operations and competitive conditions in the industry. In Fiscal 2023, we recognized $111 million of noncash impairment charges for goodwill and intangible assets in connection with the operations of Johnny Was, which was driven by the prevailing macroeconomic environment’s impact on near-term expectations for our business operations and higher interest rates. In Fiscal 2025, we recognized an additional aggregate $61 million of noncash intangible assets and goodwill impairment charges in Johnny Was and Jack Rogers, which reflected the impact of recent net sales trends and challenges in mitigating elevated tariff rates, as well as, in the case of Johnny Was, organizational realignment activities undertaken at Johnny Was in the Third Quarter of Fiscal 2025. Future impairment charges may have a material adverse effect on our consolidated financial statements or results of operations.

In recent years, we have experienced staffing shortages, higher turnover rates and challenges in recruiting and retaining qualified employees at all levels of our organization, which may continue in the future. OurAny inability or failure to recruit, retain and effectively develop skilled personnel could adversely impact our business, financial performance, reputation, ability to keep up with the needs of our customers and overall customer satisfaction.

We believe that our trademarks and other intellectual property rights have significant value and are important to our continued success and our competitive position due to their recognition by consumers and retailers. Substantially all of our consolidated net sales are attributable to branded products for which we own the trademark. Therefore, our success depends to a significant degree on our ability to protect and preserve our intellectual property. We rely on laws in the United States and other countries to protect our proprietary rights. However, we may not be able to sufficiently prevent third parties from using our intellectual property without our authorization, particularly in those countries where the laws do not protect our proprietary rights as fully as in the United States. We have also experienced challenges with enforcing our intellectual property rights on third party e-commerce websites, especially those based in foreign jurisdictions. In addition, AI-driven design tools and widely available generative AI technologies may enable new or existing competitors to rapidly develop and approximate distinctive designs, prints and other creative elements that differentiate our brands. The use of our intellectual property or similar intellectual property by others could reduce or eliminate any competitive advantage we have developed, causing us to lose sales or otherwise harm the reputation of our brands.

Additionally, there can be no assurance that the actions that we have taken will be adequate to prevent others from seeking to block sales of our products as violations of proprietary rights. As we extend our brands into new product categories and new product lines and expand the geographic scope of the sourcing, distribution and marketing of our brands’ products, we could become subject to litigation or challenge based on allegations of the infringement of intellectual property rights of third parties, including claims arising from any generative AI tools we implement in our business and assertions of rights by various third parties who have acquired or claim ownership rights in some of our trademarks internationally. In the event a claim of infringement against us is successful or would otherwise affect our operations, we may be required to pay damages, royalties, license fees or other costs to continue to use intellectual property rights that we had been using, or we may be unable to obtain necessary licenses from third parties at a reasonable cost or within a reasonable time. Litigation and other legal action of this type, regardless of whether it is successful, could result in substantial costs to us and diversion of the attention of our management and other resources.

From time to time, we are involved in litigation matters, which may relate to employment practices, consumer protection, intellectual property infringement, product liability and contract disputes, and which may include a class action, and we are subject to various claims and pending or threatened lawsuits in the ordinary course of our business operations. Often, these cases raise complex factual and legal issues and, due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings. Regardless of the outcome or whether the claims have merit, legal proceedings may be expensive and require significant management time. In addition, we may make changes in our operations and strategies in response to emerging litigation trends, which could result in lost sales or failure to attract new customers and negatively impact our operating results.

We have paid dividends in each quarter since we became a public company in July 1960, and our Board of Directors from time to time has authorized share repurchase programs under which we have repurchased shares of our common stock. We may discontinue or reduce dividend payments, or implement, modify, suspend or eliminate share repurchase programs, based upon several factors, including the terms of our credit facility and applicable law, the need for funding for our strategic initiatives or other capital expenditures and our future cash needs. Any modification or suspension of dividends or share repurchase programs could cause our stock price to decline. In addition, we cannot be certain that any share repurchase program we implement will meet the expectations of our investors. We also may be subject, from time to time, to legal and business challenges or disruptions in the operation of our company due to actions instituted by activist shareholders or others.

The results of operations, cash flows, liquidity and capital resources for Fiscal 20232024 compared to Fiscal 20222023 are not included in this report on Form 10-K. For a discussion of our results of operations, cash flows, liquidity and capital resources for Fiscal 20232024 compared to Fiscal 20222023 and certain other financial information related to Fiscal 20232024 and Fiscal 2022,2023, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II. Item 7 of our 20232024 Annual Report on Form 10-K, filed with the SEC on AprilMarch 1,31, 2024,2025, which is available on the SEC’s website at www.sec.gov and under the Investor Relations section of our website at www.oxfordinc.com.

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

We operate in a highly competitive apparel market. No single apparel firm or small group of apparel firms dominates the apparel industry, and our competitors vary by operating segment and distribution channel. The apparel industry is cyclical and veryhighly dependent on the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional, domesticdomestic, and international economic conditions change.evolve. Also, inIn recent yearsyears, consumers have chosenallocated toa spendsmaller lessportion of their discretionary spending onto certain product categories, including apparel, while increasing spending more on services and other product categories.goods. Further, negative economic conditions often have a longer and more severepronounced impact on the apparel industry than on other industriesindustries, due,due in part,part to apparelthe purchasesdiscretionary often being morenature of aapparel discretionary purchase.purchases.

We identify our operating segments based on the way the chief operating decision maker ("CODM") organizes the components of our business for purposes of allocating resources and assessing performance. Our operating segment 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. Subsequent to our acquisition of Johnny Was in Fiscal 2022, ourOur business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands reportable segments. For a more extensive description of our reportable segments and Corporate and Other, see Part I, Item 1. Business and Note 2 of our consolidated financial statements, both included in this Annual Report on Form 10-K.

For purposes of our disclosures, comparable sales consists of sales through e-commerce sites and any physical full-price retail store that was owned and open as of the beginning of the prior fiscal year and which did not have during the relevant periods, and is not within the current fiscal year scheduled to have, (1) a remodel or other event which would result in a closure for an extended period of time (which we define as a period of two weeks or longer), (2) a greater than 15% change in the size of the retail space due to expansion, reduction or relocation to a new retail space or (3) a relocation to a new space that is significantly different from the prior retail space (including relocations to accommodate an adjacent Tommy Bahama food and beverage concept). 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 expectplan 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.

The following table presents the proportion of our consolidated net sales, including the net sales of Johnny Was that was acquired during Fiscal 2022, 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.

The discussion and tables below compare certain line items included in our consolidated statements of operations for Fiscal 2024, which includes 52 weeks,2025 to Fiscal 2023, which includes 53 weeks,2024, except where 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.

Consolidated net sales were $1.5$1,478 billionmillion in the 52 week Fiscal 20242025 compared to net sales of $1.6$1,517 billionmillion in the 53 week Fiscal 2023.2024. Net sales decreased in Tommy Bahama, Lilly Pulitzer,Bahama and Johnny Was, which were partially offset by increased sales in Lilly Pulitzer and Emerging Brands. We estimate that the 53rd week in Fiscal 2023 provided an approximate $16 million benefit to our consolidated net sales for the prior year.

•ana increasedecrease in outlete-commerce sales of $2$13 million, or 3%, including a(1) $3an $18 million increasedecrease in Tommy Bahama.Bahama Thisand increase(2) wasan partially offset by a $1$11 million decrease in Johnny Was;Was. These decreases were partially offset by (1) a $10 million increase in Emerging Brands and (2) a $7 million increase in Lilly Pulitzer;

Tommy Bahama net sales decreased $29$41 million, or 3%,5%, in Fiscal 2024,2025, with a decrease in (1) wholesalee-commerce sales of $17$18 million, or 11%, driven primarily by decreases in sales to off-price, department store, and specialty store wholesale customers,8%, (2) full-price retail sales of $14$16 million, or 4%, and5%, (3) e-commercewholesale sales of $2$11 million, or 8%, and (4) outlet sales of $1 million, or 1%. These decreases were partially offset by an increase in (1) outlet sales of $3 million, or 5%, and (2) food and beverage sales of $1$4 million, or 1%.4%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:

Lilly Pulitzer net sales decreasedincreased $20$14 million, or 6%,4%, in Fiscal 2024,2025, with aan decreaseincrease in each channel of distribution including an increase in (1) e-commerce sales of $18$7 million, or 11%,4%, (2) retail sales of $4 million, or 3%, and (23) wholesale sales of $2$3 million, or 3%. These decreases were partially offset by an increase in retail sales of $1 million, or 1%.6%. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

Johnny Was net sales decreased $8$26 million, or 4%,13%, in Fiscal 2024,2025, with a decrease in each channel of distribution including a decrease in (1) wholesalee-commerce sales of $4$11 million, or 10%,13%, (2) full-price retail sales of $2$9 million, or 3%,13%, (3) wholesale sales of $5 million, or 14% , and (4) outlet sales of $1 million, or 23%, and (4) e-commerce sales of $1 million, or 1%.21%. The following table presents the proportion of net sales by distribution channel for Johnny Was for each period presented:

Emerging Brands net sales increased $2$14 million, or 1%,11%, in Fiscal 2024,2025. includingNet (1)sales an increaseincreased in sales in Jack Rogers that was acquired during the Fourth Quarter of Fiscal 2023 and (2) an increase inTBBC, Duck Head sales.and TheseSouthern increasesTide and were partially offset by adecreased decreasesales in Jack Rogers. The increase in net sales in Emerging Brands by distribution channel included increases in (1) Southern Tidee-commerce sales of $10 million, or 17%, and (2) TBBC sales. By distribution channel, increased netretail sales includedof (1)$5 anmillion, increaseor in retail sales27%, as we opened new retail locations and (2) e-commerce sales.locations. These increases were partially offset by a decrease in wholesale sales.sales of $1 million, or 1%. The following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:

The decreased gross profit of 4%6% was primarily due to (1) the 3% decrease in net sales and (2) decreased consolidated gross margin. The decreased gross margin was primarily due to full-price(1) retailapproximately and$30 e-commercemillion of increased cost of goods sold from additional tariffs enacted in Fiscal 2025, (2) a change in sales representingmix with a lowerhigher proportion of net sales at Tommy Bahama, Lilly Pulitzer and Johnny Was with more sales occurring during promotional and clearance events.events Thisat decreaseTommy wasBahama and Lilly Pulitzer and (3) a $5 million higher LIFO accounting charge in Fiscal 2025 compared to Fiscal 2024. These decreases were partially offset by (1) a $6 million lower LIFOfreight accounting charge in Fiscal 2024 comparedcosts to Fiscalcustomers 2023,due (2)to higherimproved grosscarrier margin in Emerging Brands driven by decreased promotional and off-price sales resultingrates from improvedcontract inventory levelsrenegotiations and (32) a change in sales mix with wholesale sales representing a lower proportion of net sales. We estimate that the 53rd week in Fiscal 2023 resulted in approximately $10 million of additional gross profit in the prior year.

The lower gross margin for Tommy Bahama was primarily due to full-price(1) retailincreased cost of goods sold from additional tariffs implemented in Fiscal 2025 and e-commerce(2) a change in sales representingmix with a lowerhigher proportion of net sales with more sales occurring during promotional and clearance events, including loyalty award cards, Flip Side, end of season clearance events and the semi-annual Friends & Family event.events. ThisThese decreasedecreases waswere partially offset by (1) lower freight costs to customers due to improved carrier rates from contract renegotiations, (2) decreased freight rates associated with shipping our products from our vendors and (3) a change in sales mix with wholesale sales representing a lower proportion of net sales.

The lower gross margin for Lilly Pulitzer was primarily due to (1) full-priceincreased retailcost andof e-commercegoods sold from additional tariffs implemented in Fiscal 2025, (2) a change in sales representingmix with a lowerhigher proportion of net sales with more sales occurring during promotional and clearance events, including the e-commerce flash clearancesales events,and (23) a change in sales mix with off-price wholesale sales representing a higher proportion of wholesale salessales. andThese (3)decreases higherwere loyaltypartially reward discounts drivenoffset by increasedlower participationfreight incosts Lillyto Pulitzer’scustomers loyaltydue program.to improved carrier rates from contract renegotiations.

The higherlower gross margin for Emerging Brands was primarily due to (1) improvedincreased inventorycost levelsof resultinggoods sold from additional tariffs implemented in lowerFiscal off-price wholesale sales and lower promotional e-commerce sales2025 and (2) higher markdowns during promotional and clearance events. These decreases were partially offset by a change in sales mix with retailwholesale sales representing a largerlower proportion of net sales.

•$6$13 million increase in increased employment costs,costs driven primarily related toby new bricks and mortar retail locations.locations, increased incentive compensation and increased medical benefit costs;

•$3$7 million decrease in amortizationadvertising of intangible assetscosts; and

•$2$1 million decrease in incentivemiscellaneous compensation.expenses including samples, supplies and travel related costs.

During Fiscal 2025, 82% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations. The remaining 18% of our net sales waswere generated through our wholesale distribution channels, which complement our direct to consumer operations and provide access to a larger base of consumers. Our wholesale operations consist of sales of products bearing the trademarks of our lifestyle brands to various specialty stores, better department stores, Signature Stores, multi-branded e-commerce retailers and other retailers.

These competitive pressures have been further exacerbated by a challenging macroeconomic and geopolitical environment. Significant uncertainty related to U.S. tariffs on imported goods, and broader uncertainty around U.S. trade and tax policy, inflationary pressures, including recent significant increases in energy prices, and elevated interest rates have weighed on consumer confidencesentiment and discretionary spending. Geopolitical tensions, including the U.S.-Iran conflict, as well as other hostilities in the Middle East, and the ongoing war in Ukraine, have added to global uncertainty and have influenced, and may continue to influence, energy markets, transportation costs, and broader supply chain dynamics. Taken together, these conditions have increased volatility and reduced visibility across the global retail and consumer environment.

We believe our lifestyle brands have true competitive advantages, and we continue to invest in our brands’ direct to consumer initiatives and distribution capabilities while further leveraging technology to serve our consumers when and where they want to be served. We continue to believe that our lifestyle brands, with their strong emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various challenges facing our industry in the current environment. At the same time, we remain cautious in light of extrinsic factors and are proactively taking measures to reassess and realign our operatingbusinesses expensesand initiatives to drive long-term operating margin expansion across our businesses.

On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act ("“IEEPA"”). DuringPrior to the Supreme Court decision, we paid a total of $45 million of tariffs now eligible for refund under the IEEPA tariff refund process, including $40 million and $5 million during Fiscal 2025 and the First Quarter of Fiscal 2026, we paid approximately $40 million and $5 million, respectively, of IEEPA tariffs before the Supreme Court decision.respectively. We also recorded $30 million and $12 million of additional cost of goods sold relating to these tariffs during Fiscal 2025 andwith substantially all of the remainder recorded as additional cost of goods sold in the First QuarterHalf of Fiscal 2026, respectively.2026.

During the First QuarterHalf of Fiscal 2026, we filed forclaims seeking refunds of previously paid IEEPA tariffs assessed under IEEPA in an aggregate amount of approximately $25$42 million under Phase I and Phase II of the refund process established by theU.S. CBP.Customs and Border Protection (“CBP”). We expect to file refund claims for the remaining amount of tariffs paid when a formal process is established.established for these claims.

The following table sets forth our consolidated operating results (in thousands, except per share amounts) for the First QuarterHalf of Fiscal 2026 compared to the First QuarterHalf of Fiscal 2025:

Net earnings per diluted share werewas $1.00$4.25 in the First QuarterHalf of Fiscal 2026 compared to net earnings per diluted share of $1.70$2.83 in the First QuarterHalf of Fiscal 2025 reflecting (1) lowerhigher gross margin primarilyand from $11 million of(2) increased costroyalties ofand goodsother soldoperating fromincome. additionalThese tariffsincreases enactedwere inpartially Fiscaloffset 2025,by (1) decreased net sales and (2) increased SG&A, (3) decreased net sales, (4) decreased royalties and other operating income, (5) increased interest expense and (6) a higher effective tax rate.A.

We regularly evaluate our direct-to-consumerdirect to consumer locations and may close, relocate, remodel or convert stores to optimize our store footprint and support the long-term performance of our brands. In light of current macroeconomic conditions, we have recently increased our scrutiny of new, extended and underperforming brick-and-mortarbrick and mortar opportunities. During the First QuarterHalf of Fiscal 2026, we realigned our store fleet by converting the Johnny Was full-price retail store on King Street in Charleston, South Carolina, and the Southern Tide full-price retail store in Boca Raton, Florida, into Lilly Pulitzer full-price retail stores, closing four additional Johnny Was full-price retail locations and closing one TBBC store location.stores.

FIRSTSECOND QUARTER OF FISCAL 2026 COMPARED TO FIRSTSECOND QUARTER OF FISCAL 2025

The discussion and tables below compare our statements of operations for the FirstSecond Quarter of Fiscal 2026 to the FirstSecond Quarter of Fiscal 2025. 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.

Consolidated net sales were $391$394 million in the FirstSecond Quarter of Fiscal 2026 compared to net sales of $393$403 million in the FirstSecond Quarter of Fiscal 2025. The decrease in net sales included decreased sales in Lilly PulitzerPulitzer, Johnny Was and JohnnyEmerging Was.Brands. These decreases were partially offset by increased sales in Tommy Bahama and Emerging Brands.Bahama.

•full-pricea retaildecrease in wholesale sales in the First Quarter of Fiscal$9 2026million, wereor comparable to the First Quarter of Fiscal 2025,14%, including a $3 million increase in Tommy Bahama. This increase was offset by (1) a $5 million decrease in Tommy Bahama, (2) a $2 million decrease in Emerging Brands, (3) a $1 million decrease in Johnny Was and (24) a $1 million decrease in Lilly Pulitzer; and

•outlet sales in the FirstSecond Quarter of Fiscal 2026 were comparable to the FirstSecond Quarter of Fiscal 2025.

Tommy Bahama net sales increased $8$2 million, or 4%,1%, in the FirstSecond Quarter of Fiscal 2026, with an increase in (1) food and beverage sales of $5 million, or 14%, (2) e-commerce sales of $3 million, or 7%, and11%, (32) full-price retail sales of $3$2 million, or 3%.3% and (3) e-commerce sales of $1 million, or 2%. These increases were partially offset by a decrease in wholesale sales of $2$5 million, or 4%.15%. Outlet sales in the FirstSecond Quarter of Fiscal 2026 were comparable to the FirstSecond Quarter of Fiscal 2025. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:

Lilly Pulitzer net sales decreased $9$5 million, or 9%,6%, in the FirstSecond Quarter of Fiscal 2026, with a decrease in (1) e-commerceretail sales of $7$3 million, or 17%, and8%, (2) retailwholesale sales of $1 million, or 4%.9%, Wholesaleand (3) e-commerce sales in the First Quarter of Fiscal$1 2026million, wereor comparable to the First Quarter of Fiscal 2025.2%. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented:

Johnny Was net sales decreased $6$4 million, or 13%,9%, in the FirstSecond Quarter of Fiscal 2026, with a decrease in (1) wholesale sales of $4 million, or 34% and (2) full-price retail sales of $2$1 million, or 11%.9%, E-commerce(2) wholesale sales of $1 million, or 20%, and outlet(3) e-commerce sales of $1 million, or 7%. Outlet sales in the FirstSecond Quarter of Fiscal 2026 were comparable to the FirstSecond Quarter of Fiscal 2025. The following table presents the proportion of net sales by distribution channel for Johnny Was for each period presented:

Emerging Brands net sales increaseddecreased $4$1 million, or 13%,4%, in the FirstSecond Quarter of Fiscal 2026 including a decrease in Southern Tide partially offset by increases in TBBC, Duck Head,Head and Jack Rogers. By distribution channel, the increasedecrease in net sales in Emerging Brands included increasesa decrease in (1) e-commerce sales of $3 million, or 21% and (2) wholesale sales of $1$2 million, or 10%.15%, and (2) retail sales of $2 million, or 19%. These decreases were partially offset by an increase in e-commerce sales of $2 million, or 9%. The following table presents the proportion of net sales by distribution channel for Emerging Brands for each period presented:

The tables below present gross profit by reportable segment and Corporate and Other and in total for the FirstSecond Quarter of Fiscal 2026 and the FirstSecond Quarter of Fiscal 2025, as well as the dollar change and percentage change between those two periods, and gross margin by reportable segment and Corporate and Other 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.

The higher gross margin for JohnnyTommy WasBahama was primarily due to (1) the favorable impact of tariff refund claims recognized as a revisedreduction promotionalof strategycost toof havegoods fewer promotional events than in previous periods,sold, (2) updated assortment, sourcing and pricing strategies,strategies (3)resulting decreasedin freighthigher costs to customers due to improved carrier rates from contract renegotiationsIMUs and (43) a change in sales mix with off-price wholesale sales representing a lower proportion of net sales. These increasesfactors were partially offset by increaseda costchange in sales mix with a higher proportion of goodsnet soldsales fromoccurring additionalduring tariffspromotional implementedevents, startingincluding inloyalty Fiscalaward 2025.cards and end of season clearance events.

The gross profit in Corporate and Other primarily reflects the impact of LIFO accounting adjustmentsadjustments, thatwhich resulteddecreased inby a $4$1 million higher charge in the FirstSecond Quarter of Fiscal 2026 thancompared to the FirstSecond Quarter of Fiscal 2025.

SG&A was $211$212 million in the FirstSecond Quarter of Fiscal 2026 compared to $206$209 million in the FirstSecond Quarter of Fiscal 2025, with approximately $1 million, or 28%, of the increase due to new brick and mortar retail and food and beverage locations.2025. The 2% increase in total SG&A in the FirstSecond Quarter of Fiscal 2026 included the following, which, where applicable, includes the SG&A of the new brick and mortar locationsfollowing:

•$2$3 million increase in employment costs drivenrelated primarily byto new brick and mortar retail and food and beverage locations;

•$1 million increase in software related costs.costs;

•$1$4 million decrease in advertisingincentive related costs.compensation.

The lowerhigher depreciation and amortization expense was primarily driven by a $1 million decreaseincrease in amortizationdepreciation of intangibleproperty assets.and equipment associated with our new distribution center in Lyons, Georgia.