Urban Outfitters CFO: Q4 gross margins 'could decrease' due to higher markdowns
Speaking during the company's Q3 earnings conference call earlier, Urban Outfitters CFO Frank Conforti stated, "Markdowns were favorable due to lower markdowns at the Urban Outfitters brand which was partially offset by higher markdowns at the Anthropologie and Free People brands. Despite well controlled inventory, Anthropologie was not able to hold their markdowns flat this quarter due to their challenging women's apparel performance... Inventory increased by 3% to $454M. The increase in inventory is primarily due to an increase in non-comp inventory to support our new and expanded stores. Our retail segment inventory comp was up 1% at cost, with both Anthropologie and Free People well controlled and appropriately negative. Urban Outfitters inventory ended just slightly higher than where we would have liked... We believe our Q4 gross margin rate could decrease versus the prior year primarily due to higher markdowns. These markdowns could be driven by higher markdowns at Anthropologie related to their women's apparel performance and slightly higher markdowns at Urban Outfitters related to marginally higher inventory."