Oxford Blues

Atlanta-based apparel maker Oxford Industries (NYSE: OXM) has been on my radar since last August, when the company spent $145 million to buy the London-based Ben Sherman casual apparel company. After a bumpy few months, the company's shares are sitting about where they were back then -- and I remain interested, though I'm in no hurry to buy at current prices. 

Yesterday, Oxford's market value fell about 6% following the company's announcement that it expects fiscal Q3 (ending Feb. 25) revenue of between $350 million and $365 million and EPS of $0.65 to $0.71, and Q4 sales of $355 million to $370 million and EPS between $1.06 and $1.15. That means full-year sales between $1.29 billion and $1.31 billion and EPS of $2.60 to $2.75, numbers that fall short of some Wall Street analyst estimates and are down a good bit from last summer's initial guidance.

Does that justify a 6% drop in the company's shares? That's a tough call. After all, Oxford -- which since the Ben Sherman deal has also announced plans to produce a line of clothes bearing the Orvis brand, as well as a Nick Graham (of Joe Boxer fame)-conceived line to be sold at J.C. Penney (NYSE: JCP) stores -- saw acquisitions and operational performance boost first-half sales and gross margins significantly.

Operating margins took a hit in Q2 as the company's key Tommy Bahama brand spent heavily to promote a nationally televised golf tournament; that hurt net income, which nevertheless rose 11% in the first half. A narrowing in Wal-Mart's (NYSE: WMT) women's apparel assortment, meanwhile, has apparently also dented results. Management appears concerned about its place in a "challenging industry."

Oxford still looks like a company that's growing in the right places and making smart strategic moves. Investors seem to agree: The shares currently command about 14 times full-year EPS estimates even as growth is seen at below 10% year over year. It's no bargain. I'll stay on the sidelines and hope, as a non-owner, for further dips.

Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.