Urban Outfitters, based in Philadelphia, has been struggling in attracting customers at its namesake stores, posting another quarterly sale, which leaned on its Free People and Anthropologie brands’ growth.
The retailer noticed growth in its third quarterly revenue, meeting estimates, but reported lower earnings than expected.
Company sales were reported at $814 million dollars, higher than the $813 million Wall Street forecast, and up by 5% compared to last year’s same period. Urban earnings were posted at $47.1 million dollars or $0.35 dollars per share, lower than the 0.41 dollar Wall Street estimate. Last year, the company’s earnings were at $70.2 million, equivalent to $0.47 per share.
Urban’s loss was compensated by the growth of its two retailer’s brands, while sales of comparable segment jumped at Anthropologie with 2%, Free People at15%, and dropped 7% at Urban Outfitters.
Richard Hayne, company CEO said he was disappointed with the Urban Outfitters’ results, although pleased with the two brands’ performances. Hayne added that something has to be done so as to develop the Urban’s store performance and merchandise margins.
Due to Urban’s poor performance, the retailer has been selling merchandise on their shelves at a lower price increase, but will proceed in implementing higher discounts just to move its inventory, thus, resulting in a gross profit rate drop of 295 quarterly basis points.
Urban Outfitters posted its quarterly revenue of 340.4 million dollars, while Anthropologie at 327.7 million, and Free People at 141.2 million.
In the after-hours trade, company shares fell 5% to 29 dollars, and down by 17% to date.