First quarter sales came in at $266 million compared to $282 million in fiscal 2019 and versus our guidance range of $220 million to $240 million.
It is worth noting that $14 million of the $16 million sales decrease from the first quarter of fiscal 2019 is due to lower sales in Lanier Apparel, which, as you know, we are in the process of exiting.
On an adjusted basis, earnings per share increased to a $1.89 compared to our earnings of a $1.30 in the first quarter of fiscal 2019.
Very importantly, increased full-price selling and stronger initial IMUs, coupled with excellent expense control, helped contribute to a marked improvement in gross margin, operating margin and a 36% increase in operating income over first quarter of 2019.
In total, first quarter '21 sales exceeded first quarter 2019 sales, and operating margin came in at an impressive 27% as compared to 21% in 2019.
Our full-price e-commerce channel was 55% higher than in 2019, with significant growth over 2019 in all of our branded businesses.
However, we are experiencing a much slower recovery in other parts of the country where sales levels in the Northeast, Mid-Atlantic and Midwest while improving versus Q4, were still over 30% lower than in 2019.
Overall, our retail sales were 16% lower than in 2019.
Our restaurants benefited from the addition of five Marlin Bars and the strong recovery in certain regions with a sales increase of 7% compared to 2019.
We are particularly proud of the work we have done to improve our gross margin, which on an adjusted basis expanded 520 basis points over 2019 to 64%.
In the first quarter of 2021, our direct business was 72% of revenue compared to 64% in the first quarter of 2019.
Putting it altogether, in the first quarter, our consolidated adjusted operating margin expanded 410 basis points over 2019 to 15%, with operating margin expansion in all operating groups.
On a FIFO basis, inventory decreased 29% compared to the end of the first quarter of 2020.
Excluding Lanier Apparel, which we are exiting, FIFO inventory decreased 22% compared to the end of the first quarter of 2020.
On a LIFO basis, inventory decreased 36% compared to the end of the first quarter of 2020.
Our liquidity position is strong with $92 million of cash and no debt at the end of the first quarter.
In the first quarter of 2021, cash provided by operating activities was $41 million compared to cash used in operating activities of $46 million in the first quarter of 2020.
Sales in the second quarter expected to be in a range of $300 million to $310 million compared to $302 million in the second quarter of 2019.
We estimate Lanier Apparel revenue to decline to approximately $5 million in the second quarter of fiscal 2021 compared to $20 million in the second quarter of fiscal 2019.
On an adjusted basis, earnings per share for the second quarter of 2021 are expected to be in a range of $2.15 to $2.35 compared to $1.84 per share in the second quarter of 2019.
As a result of lower planned revenue from clearance events in the third quarter and the impact of the Lanier Apparel exit, we are projecting an adjusted loss in the quarter in a range of $0.20 per share to $0.35 per share compared to adjusted earnings of $0.10 per share in the third quarter of 2019.
We now expect sales in the range of $1.015 billion to $1.05 billion compared to net sales of $1.12 billion in 2019.
For the full year, Lanier Apparel sales are expected to be approximately $20 million or $75 million lower than 2019, with no Lanier comparable sales planned in the fourth quarter.
We now expect adjusted earnings in a range of $4.85 per share to $5.15 per share compared to $4.32 per share in 2019.
In 2021, capital expenditures for the full year is expected to be approximately $35 million comparable to 2019 levels.

Summary:
First quarter sales came in at $266 million compared to $282 million in fiscal 2019 and versus our guidance range of $220 million to $240 million.
On an adjusted basis, earnings per share increased to a $1.89 compared to our earnings of a $1.30 in the first quarter of fiscal 2019.
We now expect sales in the range of $1.015 billion to $1.05 billion compared to net sales of $1.12 billion in 2019.
We now expect adjusted earnings in a range of $4.85 per share to $5.15 per share compared to $4.32 per share in 2019.