Persistent weakness at its namesake brand pushed Urban Outfitters Inc.’s first-quarter earnings down 20.4 percent.
In the three months ended April 30, the Philadelphia-based specialty store operator reported net income of $37.5 million, or 26 cents a diluted share, compared with $47.1 million, or 32 cents, in the 2013 quarter. Analysts had expected earnings per share of 27 cents on average.
Net revenues grew 5.9 percent to $686.3 million from $648.2 million while comparable sales in the retail segment were flat. The revenue results exceeded analysts’ expectations for sales of $680.2 million.
By brand, Urban Outfitters’ sales fell 5.2 percent to $277.7 million and were down 12 percent on a comp basis. The Anthropologie Group, including Bhldn, saw sales rise 10.3 percent to $295.8 million and grow 8 percent on a comp basis, while Free People saw sales up 30.4 percent to $108.7 million and comps up 25 percent. Gross margin receded to 34.8 percent of sales from 36.8 percent on a slight decrease in gross margin dollars.
“While Anthropologie and Free People continue to deliver record levels in sales and profits, Urban Outfitters had a disappointing quarter and is working diligently to regain its fashion footing,” said Richard Hayne, chief executive officer.
The company last month named Trish Donnelly, a veteran of the Ralph Lauren and J. Crew Direct organizations, president of the Urban Outfitters brand in North America, reporting to Ted Marlow, ceo of the brand. She joins the company in July. During a late afternoon conference call, Marlow said he wasn’t seeking additional management personnel to supplement his team.
Hayne expressed confidence that, through fine-tuning of the merchandise assortment and initiatives including the Without Walls activewear introduction, “Urban Outfitters will be joining its sister brands as a top performer.”
Shares fell 0.1 percent to $36.17 in regular trading Monday and fell another 4.6 percent, to $34.49, in after-hours trading following disclosure of the results as the markets closed.