Dallas, Texas 05/21/2014 (FINANCIALSTRENDS) – Urban Outfitters’ reported its earnings and the news is not too good for the company’s brand. The company’s shares dropped 8.82% in Tuesdays trading to close at $ 32.98.
While its overall brand-sales rose 6%, sales at the Urban Outfitters crashed 12%. Free People had a rise of 8% in sales and Anthropologie rose by 25%. The company announced net income of $37M for the 3 months that ended 30 April 2014. The EPS for the quarter that ended 30 Apr 2014 was $0.26. The total net-sales for the Q1 of fiscal 2015 has increased 6% over this same quarter of the previous year to a record $686M . The comparable Retail-segment net sales, that include the comparable dtc channel, have plateaued.
The comparable retail segment net-sales increased 25% at Free People & 8% at the Anthropologie Group & dropped 12% at Urban Outfitters. The wholesale segment net-sales rose 27%. The company’s chief executive officer, Richard A. Hayne said that he is pleased to announce their record URBN Q1 sales that have been driven by very strong performances at Anthropologie and the Free People brands. While Anthropologie & Free People continue to now deliver the record levels in sales & profits, the company had a very disappointing quarter and is now working very diligently to regain the fashion footing.
Dip in gross profit
For the quarter that ended 30 April 2014, the gross-profit rate dropped by 209 basis-points in comparison to the previous year’s comparable period. The drop in gross profit rate was mainly due to the deleverage in the store occupancy costs that were driven by the negative store-comparable sales at Urban Outfitters brand and the pre-opening rent-expense that was related to the new stores. The lower merchandise margins at Urban Outfitters resulting from the poor performing product contributed to the drop as well.