Customers with their Urban Outfitters shopping bags in Soho, New York
Richard Levine Corbis | Getty Images
Shares of Urban Outfitters fell Tuesday after the clothing retailer reported a disappointing holiday sale and announced that its current boss is set to leave at the end of the month.
Its stock fell about 11% in after-hours trading, after the day closed up nearly 6%.
Urban Outfitters, which also owns the Anthropologie and Free People brands, said current CEO Trish Donnelly will leave, effective Jan. 31, to pursue another career opportunity. She has named Sheila Harrington, current CEO of Free People, as President of Urban Outfitters, and will continue to oversee the Free People banner.
In the two-month period ending Dec. 31, Urban said its company’s total sales fell 8.4% from a year earlier, while sales in the same store fell 9% due to a decline in store traffic due to Covid pandemic. Sales of the same store track revenue from both online and at stores that are open for at least 12 months.
Online sales grew double numbers, the company said, but that was not enough to offset the losses in their stores. Urban reported sales up 1% at Free People, down 8% at Urban Outfitters, and down 12% at Anthropologie.
In a keynote presentation at the ICR Annual Conference on Tuesday afternoon, CFO Frank Conforti explained that the company would keep its investments light during the holidays, especially in stores, so that they do not have to discount too many products at the seasons. But this strategy may have reversed and hit store sales, Conforti said. “This is probably the first time we have experienced the negative impact due to our product model,” he said.
Urban is also currently building another warehouse facility in Kansas, he said, to be able to meet the spike demand it is experiencing online, and will open a temporary warehouse in the meantime. time to help with digital orders.
The company noted that sales of the same store across the portfolio have “nicely reconnected” in January. However, it expects profits to come under pressure in the fourth quarter as a result, in part, of higher delivery and logistics costs due to the rise it is experiencing online.
For the eleven months ending December 31, Urban said its total sales fell 14.3%, while sales in the same store fell 12% overall.
Also on Tuesday, Urban announced Gabrielle Conforti, the current chief commercial officer, as president for the North American Urban division. Emma Wisden, current managing director for Urban’s Europe division, will lead Urban’s wholesale business, the company said.
Shares of Urban Outfitters had risen nearly 15% over the past 12 months, as Tuesday’s market closed.