URBN Posts Weak 3Q Sales - Analyst Blog
November 08 2011 - 6:45AM
Zacks
Urban Outfitters
Inc. (URBN), the retailer of apparel, footwear, and
accessories, recently announced its sales results for the third
quarter ended October 31, 2011.
Urban Outfitters, which mainly
competes with Gap Inc. (GPS) and
Abercrombie & Fitch Co. (ANF), stated that
total net sales increased 6% year over year to $610 million.
However, sales were below the Zacks Consensus Estimate of $629
million.
As per the company, comparable
retail segment net sales decreased 3%, whereas comparable store net
sales dropped 7% during the quarter. Comparable retail segment net
sales by brands rose 14% at Free People, decreased 7% at
Anthropologie, while it remained flat at Urban Outfitters.
Direct-to-consumer comparable net
sales increased 15%, while wholesale segment witnessed a rise of
13% during the quarter.During the quarter, Urban Outfitters opened
16 new stores –– 7 Urban Outfitters stores, 4 Anthropologie stores
and 4 Free People stores and 1 BHLDN store.
Urban Outfitters is scheduled to
report its third quarter financial results on Monday, November 14,
2011. The current Zacks Consensus Earnings Estimate for the quarter
is 34 cents a share.
In a separate story, the company
announced the appointment of David W. McCreight as the Chief
Executive Officer, Anthropologie Group, effective from November 15,
2011. Moreover, Wendy McDevitt has been named as the President of
Terrain, while Charles Kessler joined the Urban Outfitters Brand as
Chief Merchandising Officer on October 31, 2011.
Closing
Remarks
Going forward, we believe that the
company’s increasing inventory level remains a matter of concern as
it might weigh upon the margins in the coming quarters.
Besides, young men's and women's apparel market include
extremely competitive players.
Moreover, the company’s customers
remain sensitive to macroeconomic factors including interest rate
hikes, increase in fuel and energy costs, credit availability,
unemployment levels, and high household debt levels, which may
negatively affect their discretionary spending, and in turn, the
company’s growth and profitability.
Currently, Urban Outfitters holds a
Zacks #5 Rank, which translates into a short-term ‘Strong Sell’
rating.
ABERCROMBIE (ANF): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
URBAN OUTFITTER (URBN): Free Stock Analysis Report
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