Urban Outfitters' Same-Store Sales Miss Estimates, Shares Fall

Earnings Reuters

Urban Outfitters Inc's quarterly comparable-store sales fell below estimates, hurt by weak demand for the apparel retailer's namesake and Anthropologie Group brands.

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Shares of the company, which also reported a lower-than-expected profit, were down 14 percent in extended trading on Monday.

Increasing competition from fast fashion chains such as H&M, Inditex's Zara, and Forever 21, which are quick to stock up trendy clothing, forced Urban Outfitters to resort to discounts to entice customers.

The company has been overhauling stores and merchandise at its namesake brand to fight a slump in sales, while continuing to offer fewer discounts at its full-price Anthropologie and Free People brands.

Same-store sales rose 4 percent, missing the 5.3 percent growth analysts had expected, according to research firm Consensus Metrix.

Comparable retail segment net sales at Free People, the company's smallest brand, rose 17 percent in the quarter, compared with a 5 percent rise in Urban Outfitters and a 1 percent rise in Anthropologie.

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Inventories rose 14 percent.

Revenue rose nearly 8 percent to $739.0 million.

Net income fell 12.5 percent to $32.8 million, or 25 cents per share.

Analysts on average had expected a profit of 30 cents per share and revenue of $758.2 million, according to Thomson Reuters I/B/E/S. 

(Reporting by Ramkumar Iyer and Yashaswini Swamynathan in Bengaluru; Editing by Joyjeet Das)