Urban Outfitters CEO: Anthropologie apparel sales likely to remain difficult
Speaking during the company's Q3 earnings conference call earlier, Urban Outfitters CEO Richard Hayne stated, "The divergence in demand by channel that we've witnessed over the past few years continued in Q3 this year. In general, the digital channel outperformed, stores lagged, and wholesale delivered strong growth. In the store channel, fiscal shopping visits as reported by industry groups continued to be down on a year-over-year basis. Overall traffic fell by mid single-digits in Q3 for the second consecutive year. With several notable exceptions, our brands' comp store sales echoed this traffic pattern and were negative in almost all regions by all store types: mall, lifestyle centers, and freestanding... [For Anthropologie,] we expected to see more progress in the apparel category, but customer response to fall assortments was lackluster. This led to higher markdowns versus the prior-year period even though inventories, which ended down 3%, were tightly controlled. While we could see modest comp sales improvement in Q4 over Q3 rate, we believe apparel sales on a year-over-year basis will likely remain difficult and weigh on total Anthropologie comps and margins for the holiday seasons... In the last two quarters, the Urban brand has delivered a historic low markdown rate. While we may see a slight uptick in Q4, we believe markdown rates could improve even more as we execute initiatives to increase inventory turns and decrease weeks of supply."