Urban Outfitters Inc.’s fourth-quarter sales missed Wall Street’s projections today, even though the specialty retailer posted a 9.3 percent sales increase.
Net sales for the period ended Jan. 31 totaled $730.6 million, missing analysts’ estimates of $741.9 million. This compared with year-ago sales of $668.4 million.
“While each brand reported record sales for the fourth quarter, we are most pleased with the progress the teams made on reducing overall inventory levels,” said chief executive officer Richard Hayne. “Promotional activity was significantly higher than planned but ending inventories were clean, and on a comparable-store basis, lower than the prior year.”
Comparable-store sales for the period edged up 2 percent, with comp increases of 3 percent at Urban Outfitters, 9 percent at Anthropologie and 1 percent at Free People. Direct-to-consumer sales jumped 14 percent.
“Results imply a negative midsingle-digit comp trend in the month of January despite easier year-ago comparisons against winter storms last year,” said William Blair & Co. analyst Sharon Zackfia, who called the results “disappointing.”
“Excluding direct-to-consumer, retail comps declined 1 percent against a negative 2 percent year-ago comparison,” she offered.
Amid a yearlong decline in profits and negative comps, the Philadelphia-based retailer has been in flux.
Last month, Glen Senk resigned as ceo to take on the same role at David Yurman, and was succeeded on an interim basis by Hayne, Urban Outfitters’ founder.
In the third quarter ended Oct. 31, net income fell 30.1 percent to $50.7 million amid deteriorating margins. Sales, however, rose 6.3 percent to $610 million.
Urban Outfitters will release fourth-quarter earnings results on March 12.