Shoppers with their Urban Outfitters shopping bags in Soho, New York
Richard Levine | Corbis | Getty Images
Shares of Urban Outfitters tumbled Tuesday after clothing retailer reported disappointing holiday sales and announced that its current CEO was leaving at the end of the month.
The stock fell about 11% in after-hours trading, after closing the day by almost 6%.
Urban Outfitters, which also owns the Anthropology and Free People brands, said current CEO Trish Donnelly is leaving from January 31 to take advantage of another career opportunity. It has named Sheila Harrington, current CEO of Free People, as CEO of Urban Outfitters, and she will continue to oversee the Free People banner.
During the two-month period ending December 31, Urban said its total company sales fell 8.4% year-on-year, while same-store sales fell 9% due to the decline in store traffic due to the Covid -pandemic. Sales in the same store keep the revenue online, as well as in stores that are open for at least 12 months.
The company increased with double-digit numbers, but it was not enough to compensate for the losses in its stores. Urban said sales with Free People increased by 1%, with Urban Outfitters by 8% and with Anthropology by 12%.
In a virtual presentation at the annual ICR conference on Tuesday afternoon, CFO Frank Conforti explained that the company kept its stock light during the holidays, especially in stores, to prevent excess goods from being discounted during the season. . But this strategy may have had a setback and hit store sales, Conforti said. “This may be the first time we are experiencing the negative impact of our product model,” he said.
Urban is also building another warehouse facility in Kansas, according to him, to be able to meet the demand he is experiencing online, and he will in the meantime open a temporary warehouse to help with digital orders.
The company noted that sales of the same stores in the portfolio “recovered nicely” during January. However, he expects profits to be under pressure during the fourth quarter, partly due to increased delivery and logistics expenses due to the boom it is experiencing online.
For the eleven-month period ending December 31, Urban said its total net sales fell by 14.3%, while sales in the same store fell by 12%.
Urban also named Gabrielle Conforti, its current trade officer, as president of Urban’s North American division on Tuesday. Emma Wisden, current managing director of Urban’s Europe division, will lead the wholesale of Urban, the company said.
Shares of Urban Outfitters have risen nearly 15% in the past twelve months since Tuesday’s market closed.