Oxford Industries Inc. (OXM), the owner and licenser of upscale clothing brands Tommy Bahama, Ben Sherman and Oxford Golf, reported third-quarter earnings after the closing bell on Wednesday, Dec. 9. The company actually saw its profits fall on lower sales for the quarter, but that didn’t stop investors from moving into OXM shares in Thursday trade. At the midway point of Thursday’s trading session, OXM shares were up more than 15%.

So, why did Oxford shares spike? Well, for one reason, the company raised its 2009 profit outlook substantially higher. Its new full-year profit estimate is now $1.20 to $1.25 per share, much higher than consensus Street forecast for full-year profits of just $1.03 per share.

Another reason traders shrugged off Oxford’s profit shortfall was because the company recorded a $1.3 million accounting charge in the quarter. That charge hit the bottom line hard, but that charge out of the equation and Oxford earned a profit of 32 cents per share.  This adjusted number was way north of the 18 cents per share analysts were expecting.

Finally, Oxford shares were upgraded from “neutral” to “buy” by analysts at SunTrust Robinson Humphrey. This upgrade acted as an effective pile-on of good news for OXM shares.

The OXM’s chart shows the stock hovering just above its short-term, 50-day moving average (blue line) since late October. But after Thursday’s big move in the shares, the stock is breaking out to new-high territory. 

For investors who like buying stocks with a combination of strong earnings and strong relative price strength, the latest developments in Oxford Industries certainly make this company a very attractive candidate.

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