Shoppers with their Urban Outfitters shopping bags in New York Soho
Richard Levine | Corbis | Getty Images
Shares of Urban Outfitters fell on Tuesday after the clothing retailer reported disappointing sales and announced that its current executive will leave at the end of the month.
Its shares fell about 11% in overtime trading, after closing the day at almost 6%.
Urban Outfitters, which also owns the Anthropologie and Free People brands, said current CEO Trish Donnelly will leave Jan. 31 from another career opportunity. He has appointed Sheila Harrington, current CEO of Free People, as CEO of Urban Outfitters, and will continue to oversee the Free People banner.
During the two-month period ended Dec. 31, Urban said its total sales from the company fell 8.4 percent from a year earlier, while sales at the same store fell 9 percent. due to declining store traffic due to the Covid pandemic. In-store sales track revenue both online and in-store for at least 12 months.
Its online sales grew to double digits, the company said, but that wasn’t enough to offset losses in its stores. Urban said sales were up 1% at Free People, down 8% at Urban Outfitters and down 12% at Anthropologie.
In a virtual presentation at ICR’s annual conference on Tuesday afternoon, CFO Frank Conforti explained that the company maintained its light inventories during the holidays, especially in stores, to avoid having to discount the excess merchandise during the season. But that strategy could have come against store sales, Conforti said. “It may be the first time we have experienced the negative impact because of our product model,” he said.
Urban is also building another warehouse in Kansas, he said, to be able to meet the rising demand it is experiencing online and will temporarily open a warehouse to help it with digital orders.
The company noted that sales from the same store in the portfolio have “bounced very well” during January. However, it expects profits to be pressured during the fourth quarter due, in part, to increased delivery and logistics costs due to the rise it is experiencing online.
During the eleven-month period ended Dec. 31, Urban said its total net sales fell 14.3 percent, while sales at the same store fell 12 percent overall.
Also Tuesday, Urban appointed Gabrielle Conforti, its current head of merchandise, as president of Urban’s U.S. division. Emma Wisden, current general manager of Urban’s Europe division, will run Urban’s wholesale business, the company said.
Shares of Urban Outfitters had risen nearly 15% in the past twelve months, on Tuesday’s market closing date.