Shares of Oxford Industries (NYSE: OXM) tumbled 11.65% in pre-market trading on Thursday, following the company's disappointing first-quarter earnings report and significantly lowered full-year guidance. The sharp decline comes as the maker of Tommy Bahama and Lilly Pulitzer brands grapples with increased tariff costs and a challenging consumer environment.

While Oxford Industries met expectations for the first quarter with adjusted earnings per share of $1.82, the company drastically cut its full-year outlook. The apparel manufacturer now expects adjusted EPS for fiscal 2025 to be between $2.80 and $3.20, down from its previous guidance of $4.60 to $5.00. This revised forecast falls well short of the $4.35 consensus estimate, reflecting the significant headwinds the company faces.

The primary culprit behind the guidance cut is the impact of tariffs on Chinese imports. Oxford Industries now anticipates $40 million in additional tariff costs for the year, a substantial increase from the $9-10 million previously forecast. To mitigate these effects, the company plans to reduce its direct sourcing from China from approximately 40% in fiscal 2024 to about 30% in fiscal 2025, with a target of below 10% by fiscal 2026. CEO Tom Chubb acknowledged the difficult operating environment, stating, "The so-called hard data indicates that the consumer still has the ability to spend money. However, the soft data, particularly consumer sentiment surveys, as well as reports on discretionary spending, indicate a consumer that is much more cautious when it comes to spending on discretionary items, which includes fundamentally everything we sell." As Oxford Industries navigates these challenges, investors will be closely watching the company's efforts to diversify its supply chain and adapt to the evolving trade landscape.