Urban Outfitters reports drop in Q2 sales and profit
Prachi Singh | Wednesday, August 21 2019
Urban Outfitters, Inc., which operates a portfolio of brands including Anthropologie, BHLDN, Free People, Terrain, Urban Outfitters and Nuuly, has announced net income of 60 million dollars and 93 million dollars for the three and six months ended July 31, 2019, respectively compared to 93 million dollars and 134 million dollars in the previous year. Earnings per diluted share were 61 cents and 91 cents for the three and six months, respectively compared to 84 cents and 1.22 dollars in 2018.
“I am pleased to report that customer reaction to our early fall apparel assortments have improved significantly from our second quarter results,” said Richard A. Hayne, the company’s Chief Executive Officer in a statement, adding, “Third quarter-to-date ‘comp’ sales are positive at all three brands.”
Free People shines
The company said, total company net sales for the three months decreased 3 percent to 962 million dollars, while comparable retail segment net sales decreased 3 percent, driven by negative retail store sales, partially offset by growth in the digital channel. By brand, comparable retail segment net sales increased 6 percent at Free People and decreased 3 percent at the Anthropologie Group and 5 percent at Urban Outfitters. Wholesale segment net sales decreased 8 percent.
The decrease in gross profit rate for both periods was driven by higher markdowns, deleverage in delivery and logistics expenses and store occupancy deleverage. The higher markdowns were largely driven by underperforming women’s apparel at the Anthropologie and Urban Outfitters brands.
During the six months ended July 31, 2019, the company opened seven new retail locations including: three Anthropologie Group stores, three Free People stores and one Urban Outfitters store; and closed five retail locations including: two Anthropologie Group stores, one Free People store and two Food and Beverage restaurants. During the six months, one Anthropologie Group franchisee-owned store was also opened.