Tuesday's the big day for investors in Oxford Industries (NYSE:OXM). The company will report on its performance for fiscal Q2 2006 after market close, and analysts are expecting big things from this manufacturer of private-label and branded clothing.

At last report, Wall Street estimated that the firm produced revenue growth of 6% in fiscal Q2, but transformed that into a 15% increase in profitability. Expectations for tomorrow are that the company will report $0.61 in profits per diluted share, on its way toward earning an estimated $3.54 for the year.

Analysts and investors have good reason for optimism. After all, the firm has beaten consensus estimates in each of the past four quarters, with an especially strong performance three months ago, when the firm topped estimates by a whopping 30% in reporting $0.79 for its fiscal first quarter. Moreover, Oxford raised its forward guidance numbers for fiscal 2006 from their previous range of $3.25 to $3.35 to the new target of $3.42 to $3.52 -- about a 5% bump up.

That said, there is also reason for caution here. For one thing, Oxford's guidance for fiscal Q2 was considerably more conservative than what analysts now expect. Citing "near term challenges" and "an increasingly competitive retail environment," Oxford predicted profits would fall within a range of $0.55 to $0.60 this quarter -- yet analysts won't be satisfied with anything less than $0.61.

Those possibly inflated expectations have set the company up to disappoint tomorrow. But they're not the only risks facing Oxford investors. While reviewing the firm's most recent 10-Q in preparation for this Foolish Forecast, I found signs of a negative divergence among the firm's inventories. Total inventories grew 18% year over year. Ordinarily, that's not at all worrisome, because the firm's sales grew even faster (27%). But this Fool couldn't help noticing that the greatest inventory growth was among finished goods (up 23%), while the least -- a decline of 15%, actually -- was in raw materials stockpiled in anticipation of future sales growth.

Given the company's impressive performance to date, I don't want to cry bear on Oxford just yet. But the inventory situation is conducive to bear watching. Make sure that, whatever the news tomorrow, you check to see which inventories are growing, and by how much, when the firm subsequently makes its 10-Q filing with the SEC.

Learn more about Oxford and its peers Phillips-Van Heusen (NYSE:PVH), Polo Ralph Lauren (NYSE:RL), and Tommy Hilfiger (NYSE:TOM) in these Foolish Takes:

Fool contributor Rich Smith has no position in either of the companies mentioned in this article.