Urban Outfitters Sees Traffic Drop in Areas Hit Hard by Coronavirus

Urban Outfitters, updating investors a week after reporting its earnings, says it's seeing store traffic and sales drop in areas hit hard by the coronavirus.
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Apparel retailer Urban Outfitters  (URBN) - Get Report, updating investors a week after reporting its earnings, says it's seeing store traffic and sales drop in areas hit hard by the coronavirus. 

Those areas include Milan and Seattle and "a few additional locations."

Urban Outfitters also said stores in other locations and its digital business have not seen significant impact from the outbreak. 

The Philadelphia company said that it would not be able to forecast "the extent to which Covid-19 will impact our business this year."

At last check Urban Outfitters shares were 2.1% higher at $16.74.

On March 4 the shares dropped after Urban Outfitters said that markdowns weighed on its fourth-quarter results.

For the quarter ended Jan. 31, the company reported earnings of 56 cents a share on sales of $987 million. Analysts surveyed by FactSet had expected the company to earn 57 cents a share on sales of $1 billion.

For the year-earlier quarter, the company posted earnings of 70 cents a share on sales of $973.5 million.

Urban Outfitters said its gross profit rate narrowed 2.17 percentage points vs. the year-earlier period. The narrowing "was driven by higher markdowns, deleverage in delivery and logistics expenses and lower wholesale segment margins," the company said in a statement.

Wells Fargo analysts wrote at the time that "We're disappointed [again], but we remain bullish on the inflection opportunity. The stock is too cheap and too close to an inflection in the business to throw in the towel now in our view." 

For the coming quarter analysts are forecasting net income of $81.9 million, or 83 cents a share, on sales of $1.2 billion.