Urban Outfitters Inc. reported total company net sales for the three months ended January 31, 2021, decreased 6.9 percent over the same period last year to $1.09 billion.

Comparable retail segment net sales decreased 7 percent due to negative retail store net sales as stronger conversion rates could not offset the reduced store traffic caused by the coronavirus pandemic and related occupancy restrictions. Lower store net sales were partially offset by strong double-digit growth in digital channel sales. By brand, comparable Retail segment net sales increased 6 percent at Free People and decreased 6 percent at Urban Outfitters and 11 percent at the Anthropologie Group. Wholesale segment net sales decreased 7 percent.

Adjusted net income in the quarter came to $29 million, or 30 cents a share, up from $19.5 million, or 20 cents a year ago.

For the three months, the gross profit rate decreased by 198 basis points and the adjusted gross profit rate decreased by 314 basis points versus the prior year’s comparable period. The decrease in adjusted gross profit rate was primarily due to the increase in delivery and logistics expenses due to the penetration of the digital channel as well as increased carrier surcharges. This was partially offset by lower merchandise markdowns in the Retail segment driven by the Urban Outfitters and Free People brands, benefits associated with negotiated rent concessions with landlords and European government assistance programs.

For the year ended January 31, 2021, total Company net sales decreased 13.4 percent over the same period last year. Comparable Retail segment net sales decreased 11 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 digital channel sales. Wholesale segment net sales decreased 40 percent.

Net income in the year came to $1.24 million, or 1 cent, against $168.1 million, or $1.67, a year ago.

“As we begin our new fiscal year, we are encouraged by the positive sales results all three brands delivered in North America quarter-to-date,” said Richard A. Hayne, chief executive officer. “We’re particularly excited by the recent uptick in demand for ‘going-out’ type apparel and believe this bodes well for our spring and summer seasons.”

Photo courtesy Urban Outfitters