PHILADELPHIA: Shares in Urban Outfitters Inc plummeted more than 11% in after-hours after the Philadelphia-based retailer failed to meet analysts’ expectations with its overall revenue and comparable store sales in its third quarter of fiscal year 2016.
For the three month period that ended on October 31, Urban Outfitters finished with revenues of $825.3 million, its highest on record for the third quarter. While the lifestyle specialty retailer finished with sales considerably above last year’s third quarter total of 814.5 million, it failed to beat analysts’ forecasts for revenues of $868.9 million.
Within the company, revenues at its Anthropologie Group division surged more than $8 million to $341.11, while sales at its Free People segment gained more than $2 million to $144.53. Revenue at its namesake Urban Outfitters store fell slightly to $339.61 million. Overall, the company’s same-store revenues increased by 1%, significantly below analysts’ forecasts for 3% gains.
In terms of net income, Urban Outfitters reported earnings of $52 million or 0.42 per share, up from profits of $47.1 million or 0.35 per share over the same quarter in 2015. Analysts expected the company to report per share earnings of 0.42.
“I am pleased we delivered sales, margin and profit growth in the third quarter despite weaker customer traffic,” said Richard A. Hayne, Chief Executive Officer. “I believe the strong customer response to expanded category offerings at each brand bodes well for our future growth.”
Meanwhile, Urban Outfitters’ total inventories decreased by $26 million, or 5%, on a year-over-year basis. The company said the decrease in total inventories is related mostly to the decline in its comparable retail segment inventories, which decreased by nearly 10%.
In addition, the company announced Monday that it has entered into an agreement to acquire the Vetri Family chain of restaurants which includes the purchase of Pizzeria Vetri.
“Spending on casual dining is expanding rapidly, and thus, we believe there is tremendous opportunity to expand the Pizzeria Vetri concept,” Hayne said.
Shares in Urban Outfitters plunged 2.52 or 11.14% to 22.67 in after-hours.
