Urban Outfitters Faces Top Line and Margin Pressure; Expecting Weakness to Persist in the Near Term
No-moat-rated Urban Outfitters faced significant headwinds in the first quarter with a 3% decline in retail comparable sales compounded by a 284 basis point decline in gross margin to 31.5%. Although there were signs of strength in the wholesale channel (up 14%), we note that this distribution channel accounts for less than 10% of revenue.In the near term, we see no sign of pressures easing given that second-quarter store traffic to date continues to be challenged, and we think that this will l...
Urban Outfitters is engaged in the operation of a general consumer product retail and wholesale business selling to customers through various channels including retail locations, websites, catalogs and mobile applications. The company has two segments: Retail, which consists of its Anthropologie, Bhldn, Free People, Terrain and Urban Outfitters brands and its Food and Beverage division; and Wholesale, which designs, develops and markets young women's contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People brand, home goods, including gifts, tabletop and textiles, under the Anthropologie brand and the BDG apparel collection under the Urban Outfitters brand.
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