Shoppers with their Urban Outfitters shopping bags in Soho in New York
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Urban Outfitters shares toppled Tuesday after the garments merchant reported frustrating vacation sales and revealed its present president is set to leave at the end of the month.
Its stock dropped about 11% in after-hours trading, having actually closed the day up almost 6%.
Urban Outfitters, which likewise owns the Anthropologie and Free People brand names, stated present CEO Trish Donnelly will be leaving, efficient Jan. 31, to pursue another profession chance. It has actually called Sheila Harrington, present CEO of Free People, as CEO of Urban Outfitters, and she will continue to supervise the Free People banner.
During the two-month duration ended Dec. 31, Urban stated its overall business sales fell 8.4% from a year previously, while same-store sales fell 9% due to decreases in shop traffic since of the Covid pandemic. Same-shop sales track income both online and at shops open for a minimum of 12 months.
Its online sales grew double digits, the business stated, however that wasn’t enough to balance out the losses in its shops. Urban stated sales were up 1% at Free People, down 8% at Urban Outfitters, and down 12% at Anthropologie.
In a virtual discussion at the yearly ICR Conference Tuesday afternoon, CFO Frank Conforti discussed the business kept its stocks light throughout the vacations, particularly in shops, to prevent needing to discount rate excess product at the season. But this technique may have backfired and struck shop sales, Conforti stated. “This may be the first time we experienced the negative impact due to our product model,” he stated.
Urban is likewise in the procedure of developing another warehouse center in Kansas, he stated, to be able to fulfill the need increase it is experiencing online, and it will open a short-term storage facility in the interim to assist it with digital orders.
The business noted its same-store sales throughout the portfolio have “rebounded nicely” throughout January. However, it anticipates earnings to be pressed throughout the 4th quarter due, in part, to increased shipment and logistics costs since of the rise it is experiencing online.
For the eleven-month duration ended Dec. 31, Urban stated its overall net sales fell 14.3%, while same-store sales dropped 12% general.
Also Tuesday, Urban called Gabrielle Conforti, its present chief retailing officer, as president for Urban’s North America department. Emma Wisden, present handling director for Urban’s Europe department, will lead Urban’s wholesale service, the business stated.
Urban Outfitters shares had actually climbed up nearly 15% over the past 12 months, since Tuesday’s market close.