Latest News

Earnings Results: Urban Outfitters is ‘encouraged’ by current-quarter sales, even as namesake stores struggle


Shares of Urban Outfitters Inc. rose in after-hours trading Monday after the clothing chain reported sales that topped expectations and said it was “encouraged” by trends so far in the current holiday-season quarter, even as sales continue to fall at its namesake stores.

The hipster-leaning retailer — which along with its namesake stores owns Anthropologie and Free People — reported third-quarter net income of $37.2 million, or 40 cents a share, compared with net income of $88.9 million, or 90 cents a share, in the same quarter last year. Revenue rose 3.9% to $1.18 billion, compared with $1.13 billion in the prior-year quarter. Same-store sales rose 4% year over year.

Analysts polled by FactSet expected Urban Outfitters to

earn 41 cents a share, on revenue of $1.16 billion. FactSet forecast same-store sales gains of 2.2%.

Same-store sales increased 13% at Anthropologie and 8% at the Free People Group, but fell 9% at Urban Outfitters.

“As we approach the all-important Black Friday/Cyber Monday weekend, we are encouraged by sales quarter-to-date,” Chief Executive Richard Hayne said in a statement.

Shares rose 3% in after-hours trade.

Urban Outfitters reported as clothing retailers slash prices to attract customers, many of whom have had to redirect spending toward necessities like groceries, where prices have risen. The shift in demand, along with supply-chain disruptions, have left many retailers with off-season goods.

During a conference in September, Urban Outfitters Chief Operating Officer Frank Conforti said demand trends at its namesake stores were “challenging.”

Rising rents, along with higher food and gas prices, he said, have weighed more on those stores’ younger customers — those ages 18 to 28 who might be in college or in their first job — than at Anthropologie or Free People, which target higher-income consumers. He said the holiday period could still be more difficult for the Urban Outfitters stores, as they try to realign the products in their inventories.

He said Urban Outfitters stores in Europe put up strong results, and that the chain’s customers overall wanted to refresh their wardrobes as they try to resume pre-pandemic life. But he said Urban Outfitters’ North American locations had suffered at times from a mismatch in what they were selling and what shoppers wanted — a function of overbuying or betting to big in some clothing categories.

“Obviously, Urban Outfitters is working on getting their fashion back on track and getting their execution back on track here in North America,” he said. “I think remaining focused on what continues to be a very rapidly changing marketing environment and rapidly changing fashion environment is something that they remain very focused on, as well as just improving their overall profit margins within that brand.”

Urban Outfitters stock is down 13% so far this year. By comparison, the S&P 500

is down 17% year to date.

The Fed: Fed’s Daly says financial markets are acting like interest rates are much higher than they actually are

Previous article

Personal Finance Daily: Charities funded by Sam Bankman-Fried may be asked to return donations and this chart explains how and why tech hiring is slowing down

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News