Shares of Urban Outfitters Inc. fell more than 20 percent Thursday after the company revealed its November same-store sales were flat and could “further decelerate” during the holiday season.
The pessimistic assessment came in a Securities and Exchange Commission 10-Q filing on the firm’s third-quarter results, which included a 9.9 percent increase in comparable-store sales, led by a 17.1 percent rise in comps at Urban Outfitters and gains of 1.8 percent and 3.9 percent at the Anthropologie and Free People units, respectively. The statement contributed to a decline of $3.88, or 20.6 percent, dropping Urban’s shares to a $14.98 close on a day when the Standard & Poor’s Retail Index suffered a 4.6 percent decline to 273.37.
Uncertainty about the Big Three automakers’ bailout package’s chances of Senate passage and continued discouraging news about employment lowered all three major indices on Thursday, although none as much as the S&P Retail measure. The Dow Jones Industrial Average fell 2.2 percent to 8,565.09, the S&P 500 was down 2.9 percent to 873.59 and the Nasdaq Composite dropped 3.7 percent to 1,507.88.
Although Urban didn’t elaborate on its SEC filing, Sterne, Agee & Leach analyst Margaret Whitfield estimated that comps rose 7 to 8 percent at Urban Outfitters stores and fell about the same amount at Anthropologie, with Free People “also likely negative.” The retail calendar shift, which puts shopping days into December that last year fell after Thanksgiving in November, may help it recoup some business, she said, but “we note that they face a tough 9 percent comp for the month and even tougher 11 percent comp” for the fourth quarter. Last year, comps at Anthropologie rose 16 percent in December and 17 percent for the holiday season, while Urban’s were up 4 percent and 5 percent, respectively.
“While [the company] is clearly not immune to the current macro-environment, we have been very impressed with management’s ability to react quickly to current trends and manage the business accordingly,” the analyst wrote in a research note in which she maintained her “buy” rating on shares, but lowered her price target to $24 from $31.
The discouraging words about retail weren’t relegated to publicly held players. S&P downgraded Neiman Group Inc.’s credit rating one tick to “B-plus” from “BB-minus” based on credit analyst Diane Shand’s expectation that “credit measures will likely deteriorate more than we had originally projected as a result of a deepening spending pullback by consumers.” The BB class is the highest speculative category on S&P’s scale.
S&P retail analyst Pearl Wang lowered her rating of AnnTaylor Stores Corp. stock to “sell” from “hold” based on her expectations that the specialty retailer would be hurt by “rising unemployment and higher savings level into ’09, and increased bargains at traditional high-end luxury retailers as they siphon off shoppers from lower-priced stores.” The stock ended the day down 7.7 percent at $5.91.
A disappointing forward outlook contributed to large declines at Gildan Activewear, off 35.1 percent to $9.19, and Lululemon Athletic Inc., down 32.3 percent to $7.08. The day’s sharpest declines also included a number of real estate investment trusts such as Developers Diversified Realty Corp. (20.1 percent to $5.04), Taubman Centers (18.8 percent to $24.31), Glimcher Realty Trust (18.7 percent to $2.52) and Macerich Co. (18.3 percent to $11.81). Struggling General Growth Properties Inc. was off 11.1 percent to $1.44, a fraction of its 52-week high of $47.89, but six times the corresponding low of 24 cents.
Earlier in the day, Tokyo’s Nikkei 225 managed a 0.7 percent advance to 8,720.55, while Hong Kong’s Hang Seng Index creeped up 0.2 percent to 15,613.90. European stocks were mixed, with London’s FTSE 100 up 0.5 percent to 4,388.69 and the CAC 40 in Paris down 0.4 percent to 3,306.13.
Inditex Group staged a 4.5 percent rally after the Spanish firm reported a 1 percent advance in net income for the third quarter.
Among the stores and suppliers enjoying up days despite a down market were Gottschalks Inc. (up 41 percent to 43 cents), Hartmarx Corp. (13 percent to 13 cents), Caché Inc. (11.8 percent to $1.90), The Bon-Ton Stores Inc. (7.4 percent to $1.31) and Liz Claiborne Inc. (6.6 percent to $3.22).
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews