Shares of Urban Outfitters (NASDAQ:URBN) plunged more than 9% in late trading after the company posted fiscal fourth-quarter results that missed analyst expectations. Gross margin narrowed and profits slipped compared with the year-ago period.
The fashion retail chain disappointed the Street, reporting profit of $75.2 million, or 45 cents a share, compared with year-ago net income of $77.7 million, or 45 cents a share.
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Fourth-quarter total net sales came in at $668.4 million, up 14% from last year’s quarterly sales of $588.49 million. The company, which operates the Urban Outfitter and Anthropologie brands, among others, also said that comparable-store net sales fell 2% during the quarter. Comparable retail segment net sales, which included direct-to-consumer sales, rose 4%.
The results missed expectations, as analysts polled by Thomson Reuters had predicted earnings of 52 cents a share on revenue of $674.92 million.
"I am pleased to announce record sales and operating profits for the quarter, as well as our second highest operating margin rate for the fourth quarter and year," said Glen T. Senk, Chief Executive Officer, in a statement. "It was another year of strong performance as we delivered 17% sales growth, 22% operating income growth, and executed our long standing goal of growing profits faster than sales.”
Fourth-quarter gross margin fell by 2% during the quarter, compared with the year-ago quarter, which the company credited to increased markdowns as a result of “changing women’s apparel fashion trends” and higher shipping costs related to the company’s growing international direct-to-consumer division.
The retailer also boasted that it opened 46 new stores during fiscal 2011.
Shares of Urban Outfitters fell 1.3% in Monday's session, closing at $37.99 a share. The stock fell another $3.75, or 10%, in electronic trading following the session's close.