US: Urban Outfitters Q4 profit slumps 48% on markdowns
- Q4 net income tumbled 47.7% to $39.3m
- Net sales rose 9% to $731m
- Gross margin narrowed to 30.1% from 39.7%
Fashion retailer Urban Outfitters Inc has seen its fourth quarter nearly halve after markdowns to clear slow-moving women's wear impacted margins.
The company, which operates the Anthropologie, Free People and Urban Outfitters brands, said net income in the three months to 31 January tumbled 47.7% to $39.3m, or $0.27 per share, down from $75.2m, or %0.45 per share share, in the same period last year.
But net sales rose 9% to $731m, although comparable store sales fell 1%. Comparable retail segment sales were up 2%, with gains of 3%, 9% and 1% at Urban Outfitters, Free People and Anthropologie respectively.
Direct-to-consumer comparable net sales increased 14% and wholesale segment net sales rose 3% for the quarter. But gross margin narrowed to 30.1% from 39.7%.
"I am pleased that we managed our inventories to appropriate levels at year end even though our margins during the quarter suffered as a result," said CEO Richard Hayne. "Our rate of full-priced selling has improved from fourth quarter levels as we seek to re-establish our historic full-price selling penetration."
For the full year, net income fell to $185.3m or $1.19 per share, down from $273.0m or $1.60 per share the year before. Total company sales rose 9% to $2.5bn, with flat comparable retail segment net sales and a 4% drop in comparable store net sales.
Fashion retailer Urban Outfitters recorded an 8% increase in net profit in the three months to 31 July, boosted by a strong increase in direct to consumer sales....
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