URBN: Struggling Urban Outfitters Drops on Earnings Miss

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Urban Outfitters stock (URBN) is down after first-quarter profits declined some 20% — missing earnings expectations by a penny.

Urban Outfitters 185URBN stock is down 4.6% in early morning trading.

Urban reported higher costs while sales revenue fell.

Urban Outfitters reported a profit of $37.5 million (26 cents a share), down from $47.1 million (32 cents a share) from last year.

Thomson Reuters-polled analysts expected a per-share profit of 27 cents with sales in the $680.2 million area.

In total, revenue rose 5.9% to $686.3 million.

Urban Outfitters announced that the good news was that company brands Anthropologie and Free People helped the company remained solid.

“I am pleased to announce record URBN first quarter sales driven by strong performances at both the Anthropologie and Free People brands,” said Richard A. Hayne, Chief Executive Officer, in a statement. “While Anthropologie and Free People continue to deliver record levels in sales and profits, Urban Outfitters had a disappointing quarter and is working diligently to regain its fashion footing.”

Via the Wall Street Journal:

Urban Outfitters in March had issued a light warning, saying that while customer reaction to new spring fashions at the company’s Anthropologie and Free People brands had been strong, continued challenges facing the Urban Outfitters brand led the company to remain very cautious about the latest quarter’s performance.

….retailers that cater to teens and young adults are facing stiff competition from fast-fashion retailers like Forever 21 Inc. and H&M Hennes & Maurtiz AB. This shift has hurt sales at Abercrombie & Fitch Co. and other traditional teen retailers. Weak traffic at malls has also concerned observers, though Urban Outfitters as a whole continues to report improving sales.

During the quarter, Urban Outfitters opened five new stores: two Urban Outfitters, two Free People stores and one Anthropologie Group store.


Article printed from InvestorPlace Media, https://investorplace.com/2014/05/urbn-struggling-urban-outfitters-earnings-miss/.

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