Shares of Urban Outfitters (NASDAQ:URBN) plummeted nearly 20% Wednesday morning as Wall Street frets about what the surprise resignation of the apparel maker’s CEO means for the company’s turnaround plan.
In response to the departure of CEO Glen Senk late Wednesday, analysts downgraded their ratings and price targets on Philadelphia-based Urban Outfitters, which also operates the Anthropologie and Free People brands.
Continue Reading Below
Senk, 55, is leaving to “pursue another opportunity” and is being replaced by Richard Hayne, 64, the company’s co-founder, chairman and president. Senk will remain on board for a short time to assist with the transition.
"Glen joined the company nearly 18 years ago when the Anthropologie business was a single-store prototype. We are forever grateful for his passion, creativity and leadership in building the Anthropologie brand to what it is today,” Hayne said in a statement.
In response, Citigroup (NYSE:C), which had listed Urban Outfitters on its Top Picks Live list, downgraded the stock to “sell” from “buy,” while Baird cut it to “neutral” from “outperform."
“Say what you will about Glen Senk's tenure as CEO of URBN, his abrupt departure puts a major dent in our near-term confidence that a turn is indeed at hand," Citi analysts wrote, according to Dow Jones Newswires.
Analysts at Baird are concerned about the CEO change causing “internal disruption and delay[ing] the emerging turnaround, particularly given the relatively short tenure of the Urban and Anthropologie brand leaders,” Dow Jones reported.
Senk leaves just a week after Urban Outfitters reported same-store sales were flat in November and December.
Shares of Urban Outfitters tumbled 18.82% to $23.84 in recent action, mirroring their 52-week decline of just over 18%.