What happened

Shares of Oxford Industries (OXM 0.48%) were moving lower today after the apparel company, which owns brands like Tommy Bahama and Lilly Pulitzer, posted disappointing guidance in its fourth-quarter earnings report.

As of 2:44 p.m. ET, the stock was down 12.1%.

So what

The headline numbers for the apparel company were solid but marked a deceleration from earlier in the year, excluding its acquisition of Johnny Was last September.

Overall, revenue in the quarter jumped 28% to $382.5 million, which topped estimates at $378.7 million. Excluding Johnny Was, revenue increased 11% in the quarter.

Revenue from Tommy Bahama, its biggest brand, was up 9% to $229.6 million.

Profitability in the quarter was also strong, as adjusted gross margin rose from 61.3% to 61.5%, and the company posted adjusted earnings per share of $2.28, up from $1.68 in the quarter a year ago and better than estimates at $2.14.

CEO Tom Chubb said in a press release:

Our strategy of creating aspirational lifestyles through compelling product collections, inspiring advertising campaign, and uplifting shopping experiences is resonating with customers across our powerful portfolio of leading brands. Fiscal 2022 was highlighted by robust organic growth in all brands and all channels of distribution.

The company also increased its quarterly dividend by 18% to $0.65 per share.

Now what

The guidance for the first quarter seemed to be the only blemish in the report, but it was enough to cause the stock to sell off, as most retailers have offered cautious guidance for 2023. 

For the first quarter, it expects revenue of $405 million to $425 million, up 18% at the midpoint from 2022, and it expects adjusted earnings per share of $3.60 to $3.80, which compares to $3.50 in the quarter a year ago. However, that was below estimates at $4.10, implying some margin compression in the first quarter. 

For the full year, the company expects revenue of $1.62 billion to $1.66 billion, up 16% from $1.41 billion, and it called for adjusted EPS of $11.50 to $11.90, up from $10.88 and compared to the consensus at $11.82.

Based on that guidance, the stock is now trading at a price-to-earnings ratio of less than 9, making it look like a good buy after today's decline.