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Urban Outfitters Q2 net sales and profit decline

By Prachi Singh

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Business

Urban Outfitters announced net income of 50 million dollars and 62 million dollars for the three and six months ended July 31, 2017, respectively. Earnings per diluted share were 0.44 dollar and 0.54 dollar for the three and six months, respectively compared to 0.66 dollar and 0.91 dollars in the same periods last year. Total company net sales for the second quarter were 873 million dollars, a 2 percent decrease as compared to the same quarter last year.

"While we are disappointed in our second quarter performance, we have a number of initiatives underway including: speed to customer, international growth, wholesale expansion and digital investments,” said Richard A. Hayne, the company’s Chief Executive, in a press statement, adding, “We believe these initiatives combined with encouraging fashion apparel trends could lead to improved topline performance in future quarters.

Q2 comparable sales down 4.9 percent

Comparable Retail segment net sales, which include the comparable direct-to-consumer channel, decreased 4.9 percent. By brand, comparable retail segment net sales increased 2.9 percent at Free People, but decreased 4 percent at the Anthropologie Group and 7.9 percent at Urban Outfitters. The decline, the company said, was due to negative retail store sales, which was partially offset by continued sales growth in our direct-to-consumer channel. Wholesale segment net sales increased 10 percent.

For the three and six months, the gross profit rate decreased 440 basis points and 369 basis points versus the prior year’s comparable periods, respectively. The company added that this decline in gross profit rate for both periods was driven by higher markdowns due to underperforming 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 initial merchandise mark-ups at the Anthropologie and Urban Outfitters brands due to a change in product mix.

During the six months, the company opened a total of 12 new locations including: six Free People stores, four Urban Outfitters stores, one Anthropologie Group store and one Food and Beverage restaurant; and closed six locations including: three Free People stores, one Urban Outfitters store, one Anthropologie Group store and one Food and Beverage restaurant.

Picture:Free People website

Urban Outfitters