Buyers with their Urban Outfitters shopping bag in Soho, New York
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Urban Outfitters took stock on Tuesday after the apparel retailer reported disappointing sales and announced that the current chief executive was set to depart at the end of the month.
Its stock fell about 11% in hour trading, closing up by about 6% on the day.
Urban Outfitters, which also owns the Anthropologie and Free People brands, said current CEO Trish Donley will take effect on January 31 to pursue another career opportunity. It has named Sheila Harrington, the current CEO of Free People, as the CEO of Urban Outfitters, and will continue to oversee the Free People banner.
During the two-month period ended December 31, Urban said its total company sales fell 8.4% compared to a year earlier, while same-store sales fell 9% due to a drop in store traffic due to the Kovid epidemic. Has gone. Same-store sales track revenue is open on both online and in-store for at least 12 months.
Its online sales increased by double digits, the company said, but it was not enough to compensate for losses in its stores. Urban said sales were down 1% on Free People, down 8% in Urban Outfitters, and 12% in Anthropology.
In a virtual presentation at the annual ICR conference on Tuesday afternoon, CFO Frank Conforti reported that the company kept its inventions during the holidays, especially in stores, to avoid discounting excess goods in light amounts. Conforti said that this strategy could lead to a drop in store sales. “This may be the first time we’ve experienced a negative impact due to our product model,” he said.
Urban is also in the process of building another warehouse facility in Kansas, he said, to be able to meet demand it is experiencing online, and it will open a temporary warehouse in the interim to help with digital orders .
The company has noted its similar sales in the portfolio throughout the month of January. However, profits are expected to increase during the fourth quarter, as it is going online due to increased delivery and logistic expenses.
For the eleven-month period ended December 31, Urban said its total net sales fell 14.3%, while same-store sales fell 12% overall.
Also, as chairman of Urban’s North America division on Tuesday, Urban nominated his current chief business officer, Gabrielle Conforti. Arma Wisden, the current managing director for Urban’s Europe division, will lead Urban’s wholesale business, the company said.
With Tuesday’s market closing, shares of Urban Outfitters had climbed nearly 15% over the past 12 months.