Urban Outfitters said that retail comps, which includes both same-store sales and e-commerce sales, across all its brands were "low single digit negative." With 525 stores, Urban Outfitters also owns four other brands including Anthropologie and Free People, both which still are seeing strong growth trends. The company saw a comp increase of 0.2% in the second quarter - specifically a 10% comp decline in its flagship brand, a 20.6% increase in its Free People brand and a 6.4% increase in its Anthropologie brand.
Urban Outfitters has been working to reinvigorate its main brand. Its main brand has come under the same competitive struggles as other young apparel retailers, Aeropostale (ARO) , Abercrombie & Fitch (ANF) and American Eagle Outfitters (AEO) . Chairman and CEO Richard Hayne said in the company's second-quarter earnings call last month that the company was "focused on getting the back to school product assortments right, reinvigorating the brand experience, and reengaging the core 18 to 28 year old customer."
Read More: 4 Reasons Why Urban Outfitters Is Failing
Shares closed Wednesday lower, falling 0.60% to $38.65. Here's what analysts are saying:
Eric Beder, Wunderlich Securities (Buy; $42 PT)
While disappointing, we are not highly surprised, as the store environment in the teen sector has remained difficult. We believe the 10-Q release points to the turn being pushed back even further than back-to-school, and makes the Holiday season even more crucial. We have maintained our Buy rating and $42 price target, but recognize URBN will be under pressure today and is running out of chances to show investors they can return the Urban Outfitters chain to some level of prominence. The 10-Q announcement now puts even more pressure on management to craft a cohesive vision on the company's investor day on 9/23.
Yes, we may have been aggressive and early in our Buy call on URBN, but we still believe in the business model and ability to drive superior returns. We believe the company continues to offer a unique product vision and is one of the few unit growth stories remaining in specialty retailing; but the pace of the turn at Urban is trying our patience.