Urban Outfitters Inc. reporting a challenging holiday quarter and a planned exit for the CEO of its namesake brand.
Total company net sales for the two months ended December 31, 2020, decreased 8.4 percent over the same period last year. Comparable Retail segment net sales decreased 9 percent due to negative retail store net sales as stronger conversion rates could not offset the reduced store traffic as a result of the coronavirus pandemic and related restrictions. Lower store net sales were partially offset by strong double-digit growth in its digital channel sales. By brand, comparable Retail segment net sales increased 1 percent at Free People and decreased 8 percent at Urban Outfitters and 12 percent at the Anthropologie Group. Wholesale segment net sales decreased by 1 percent.
Although Retail segment comparable net sales have rebounded in the month of January, URBN expects total company gross profit margins for the fourth quarter to deleverage by several hundred basis points driven by two primary factors. First is the deleverage in delivery and logistics expenses due to the increased penetration of digital sales, carrier surcharges and increased expedited shipments; and second is deleverage in store occupancy expense due to negative store net sales.
For the eleven months ended December 31, 2020, total company net sales decreased 14.3 percent over the same period last year. Comparable Retail segment net sales decreased 12 percent, driven by negative retail store net sales due to mandated store closures as a result of the coronavirus pandemic and lower store productivity once opened, partially offset by strong double-digit growth in the digital channel. Wholesale segment net sales decreased by 42 percent.
During the eleven months ended December 31, 2020, the company opened a total of 18 new retail locations including 6 Urban Outfitters stores, 6 Anthropologie Group stores and 6 Free People stores (including 2 FP Movement stores); and closed 6 retail locations including 4 Urban Outfitters stores, 1 Anthropologie Group store and 1 Free People store. During the eleven months ended December 31, 2020, 6 franchisee-owned stores were closed including 4 Urban Outfitters stores, 1 Anthropologie Group store and 1 Free People store.
URBN announced Trish Donnelly, CEO of the Urban Outfitters Group, would be leaving the company as of January 31, 2021, to pursue a new career opportunity. Sheila Harrington will become CEO for both Urban Outfitters Group and Free People Group. Gabrielle Conforti, the current chief merchandising officer for the Urban Outfitters brand, was promoted to president, Urban Outfitters North America, and Emma Wisden will continue as managing director, Urban Outfitters Europe and lead the Urban Outfitters brand Wholesale business. Both Conforti and Wisden will report to Harrington.
“We thank Trish for her seven years of dedicated service to the company. During her tenure, she built a strong, talented team, and the Urban brand grew revenues by over 10 percent,” said Richard A. Hayne, chief executive officer, URBN. “I congratulate Sheila, Gabrielle and Emma on their promotions and added responsibility,” finished Hayne.
Urban Outfitters’ portfolio of brands is comprised of 250 Urban Outfitters stores in the United States, Canada and Europe and websites; 236 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 149 Free People stores in the United States, Canada and Europe, catalogs and websites, 11 Menus & Venues restaurants and 1 Urban Outfitters franchisee-owned store as of December 31, 2020.
Photo courtesy Urban Outfitters
