Urban Outfitters Cautious Ahead on Q1 Outlook

Urban Outfitters storefrontPhiladelphia—Weakness at Urban Outfitters’ namesake brand is likely to continue into the first quarter for the lifestyle retailer, according to analysts.

The analysts gave their views after the company issued fourth-quarter numbers that revealed a 7.4% rise in net profit to $89 million, and a 6% sales increase to $905.9 million. Comparable store sales increased 20% at Free People and 10% at Anthropologie, but declined 9% at Urban Outfitters.

CEO Richard Hayne said: “Looking forward, customer reaction to the new spring fashion offerings at our Anthropologie and Free People brands have been strong, but given the continued challenges facing the Urban Outfitters brand, we remain very cautious about Urban Outfitter’s first quarter performance.”

CFA analyst Susan Anderson said the negative comparable store sales trend at the group’s namesake brand was worse than expected.

Although comparable store sales for the first quarter will “likely improve” in April with the Easter shift and warmer weather, Anderson says she doesn’t expect this to get Urban Outfitters “back on track” for the next quarter.

Meanwhile, Stifel analyst Richard Jaffe was slightly more upbeat. “Despite what we believe will likely be a somewhat challenging first-quarter, driven by weakness at the Urban Outfitters brand, we remain positive on the long term outlook for the company.”

 

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