Urban Outfitters shares tumble on disappointing holiday gross sales, retailer taps Harrington as CEO

Shoppers with their Urban Outfitters procuring baggage in Soho in New York

Richard Levine | Corbis | Getty Images

Urban Outfitters shares tumbled Tuesday after the attire retailer reported disappointing holiday gross sales and introduced its present chief government is about to depart on the finish of the month.

Its inventory dropped about 11% in after-hours buying and selling, having closed the day up almost 6%.

Urban Outfitters, which additionally owns the Anthropologie and Free People manufacturers, stated present CEO Trish Donnelly might be leaving, efficient Jan. 31, to pursue one other profession alternative. It has named Sheila Harrington, present CEO of Free People, as CEO of Urban Outfitters, and she’s going to proceed to supervise the Free People banner.

During the two-month interval ended Dec. 31, Urban stated its complete firm gross sales fell 8.4% from a 12 months earlier, whereas same-store gross sales fell 9% because of declines in retailer visitors due to the Covid pandemic. Same-store gross sales observe income each on-line and at shops open for a minimum of 12 months.

Its on-line gross sales grew double digits, the corporate stated, however that wasn’t sufficient to offset the losses in its shops. Urban stated gross sales had been up 1% at Free People, down 8% at Urban Outfitters, and down 12% at Anthropologie.

In a digital presentation on the annual ICR Conference Tuesday afternoon, CFO Frank┬áConforti defined the corporate saved its inventories gentle throughout the holidays, particularly in shops, to keep away from having to low cost extra merchandise on the season. But this technique may need backfired and hit retailer gross sales, Conforti stated. “This may be the first time we experienced the negative impact due to our product model,” he stated.

Urban can also be within the strategy of constructing one other warehouse facility in Kansas, he stated, to have the ability to meet the demand spike it’s experiencing on-line, and it’ll open a short lived warehouse within the interim to assist it with digital orders.

The firm famous its same-store gross sales throughout the portfolio have “rebounded nicely” throughout January. However, it expects earnings to be pressured throughout the fourth quarter due, partially, to heightened supply and logistics bills due to the surge it’s experiencing on-line.

For the eleven-month interval ended Dec. 31, Urban stated its complete web gross sales fell 14.3%, whereas same-store gross sales dropped 12% general.

Also Tuesday, Urban named Gabrielle Conforti, its present chief merchandising officer, as president for Urban’s North America division. Emma Wisden, present managing director for Urban’s Europe division, will lead Urban’s wholesale enterprise, the corporate stated.

Urban Outfitters shares had climbed nearly 15% over the previous 12 months, as of Tuesday’s market shut.

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