Urban Outfitters announces disappointing holiday sales, group CEO departure
13 Jan 2021
Urban Outfitters, Inc. reported total company net sales for the two months ended December 31, 2020, decreased 8.4 percent over the same period last year, while comparable retail segment net sales decreased 9 percent due to negative retail store net sales. The company said in a statement that stronger conversion rates could not offset the reduced store traffic as a result of the coronavirus pandemic and related restrictions. Lower store net sales were partially offset by strong double-digit growth in digital channel sales. By brand, comparable retail segment net sales increased 1 percent at Free People and decreased 8 percent at Urban Outfitters and 12 percent at the Anthropologie Group, while wholesale segment net sales decreased 1 percent.
On a personnel note, URBN today announced Trish Donnelly, Chief Executive Officer of the Urban Outfitters Group, will be leaving the company as of January 31, 2021, to pursue a new career opportunity. The company has announced that Sheila Harrington will become Chief Executive Officer for both Urban Outfitters Group and Free People Group. Additionally, Gabrielle Conforti, currently the Chief Merchandising Officer for the Urban Outfitters brand, has been promoted to President, Urban Outfitters North America, and Emma Wisden will continue as Managing Director, Urban Outfitters Europe, and will lead the Urban Outfitters brand wholesale business. Both Conforti and Wisden will report to Sheila.
Urban Outfitters expects to report decline in Q4 gross profit margins
The company added that although retail segment comparable net sales have rebounded in the month of January, URBN expects total company gross profit margins for the fourth quarter to deleverage by several hundred basis points driven by the deleverage in delivery and logistics expenses due to the increased penetration of digital sales, carrier surcharges and increased expedited shipments; and deleverage in store occupancy expense due to negative store net sales.
For the eleven months ended December 31, 2020, total company net sales decreased 14.3 percent over the same period last year, while comparable retail segment net sales decreased 12 percent, driven by negative retail store net sales due to mandated store closures as a result of the coronavirus pandemic and lower store productivity once opened, partially offset by strong double-digit growth in the digital channel. Wholesale segment net sales decreased 42 percent.
During the eleven months period, the company opened a total of 18 new retail locations including: six Urban Outfitters stores, six Anthropologie Group stores and six Free People stores and closed six retail locations including: four Urban Outfitters stores, one Anthropologie Group store and one Free People store. During the eleven months ended December 31, 2020, six franchisee-owned stores were closed including: four Urban Outfitters stores, one Anthropologie Group store and one Free People store.