Shoppers with Urban Outfitters shopping bags in Soho, New York
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Urban Outfitters shares fell on Tuesday after apparel retailers reported a disappointing holiday sale and the current CEO announced that he would resign at the end of the month.
The stock fell by about 11% in after-hours trading and rose by nearly 6%.
Urban Outfitters, which also owns the Anthropologie and Free People brands, said current CEO Trish Donnelly will resign on January 31 to pursue another career opportunity. Sheila Harrington, now CEO of Free People, has been appointed CEO of Urban Outfitters and she will continue to oversee the Free People banner.
Urban said company-wide sales were down 8.4% year-on-year in the two months ending December 31, while same-store sales were down 9% due to lower store traffic due to the Covid pandemic. It was. Existing store sales track revenue both online and in stores that have been open for at least 12 months.
Online sales grew by double digits, according to the company, but that wasn’t enough to offset in-store losses. According to Urban, sales were up 1% for Free People, down 8% for Urban Outfitters and down 12% for anthropologie.
In a virtual presentation at the ICR conference on Tuesday afternoon, CFO Frank Conforti explained that he had lightened inventory so he didn’t have to discount excess merchandise during the holidays, especially in stores. .. However, the strategy could have backfired and hurt over-the-counter sales, Conforti said. “This may be the first time we’ve experienced the negative effects of our product model,” he said.
Urban is also building another warehouse facility in Kansas to meet the surge in online demand and plans to open a temporary warehouse to support digital orders. is.
The company said same-store sales for its entire portfolio “recovered well” in January. However, we expect profits to be weighed in the fourth quarter, partly due to higher shipping and logistics costs due to the surge online.
Urban said same-store sales fell 12% overall, while total net sales fell 14.3% over the 11 months ending December 31st.
Also on Tuesday, Urban appointed Gabriel Comforty, the current Chief Merchandising Officer, as President of Urban’s North American division. Emma Wisden, the current managing director of Urban’s European division, said the company will lead the wholesale business of Urban.
Urban Outfitters shares have risen almost 15% in the last 12 months at the end of the market on Tuesday.
Urban Outfitters (URBN) shares fall due to disappointing sales during the 2020 holiday season
Source link Urban Outfitters (URBN) shares fall due to disappointing sales during the 2020 holiday season