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Urban Outfitters reports drop in Q1 earnings

Urban Outfitters announced net income of 12 million dollars for the three months ended April 30, 2017. Earnings per diluted share were 0.10 dollar for the quarter against 0.25 dollar last year, while total company net sales were 761 million dollars, flat compared to the same quarter last year. Comparable retail segment net sales, which include the comparable direct-to-consumer channel, decreased 3.1 percent.

"During the first quarter we continued to see strong double-digit growth from our direct-to-consumer channel and our wholesale business," said Richard A. Hayne, Chief Executive Officer in a media release, adding, “We believe we have significant opportunity to continue to grow both of these channels at all of our brands.”

First quarter results review

By brand, comparable retail segment net sales increased 1.5 percent at Free People, but decreased 3.1 percent at Urban Outfitters and 4.4 percent at the Anthropologie Group. The company said, comparable retail segment sales were driven by strong, double-digit growth in the direct-to-consumer channel, which were offset by negative retail store comparable net sales. Wholesale segment net sales increased 14 percent.

The gross profit rate decreased 284 basis points versus the prior year’s comparable period driven by higher markdowns due to under-performing women’s apparel and accessories product at Anthropologie and Urban Outfitters, deleverage in delivery and logistics expenses primarily due to the penetration of the direct-to-consumer channel, and deleverage in store occupancy related to negative comparable store net sales.

During the three months ended April 30, 2017, the company opened a total of seven new locations including: four Free People stores, one Urban Outfitters store, one Anthropologie Group store and one Food and Beverage restaurant; and closed four locations including: one Free People store, one Urban Outfitters store, one Anthropologie Group store and one Food and Beverage restaurant.

Picture:Free People website