Shares of Urban Outfitters (URBN)  slid over 9% to $35.33 Wednesday after the retailer posted third-quarter results that were below analysts' forecasts amid higher markdowns and slumping sales at its Anthropologie brand.

The Philadelphia-based retailer said increased markdowns and slowing sales at Anthropologie will continue to pressure results in the holiday quarter.

The company is also responding to a shift in demand for a new fashion silhouette with roots in Europe. But the emerging trend is not impacting all brands equally. Younger and more fashion-forward customers are adopting these new looks more readily, so Urban Outfitters and Free People benefited from the shift during the third quarter, while the more conservative Anthropologie brand did not, CEO Richard Hayne noted on the earnings conference call.

For the third quarter, Urban Outfitters reported adjusted earnings of 40 cents per diluted share, lower than analysts' projections of 44 cents per share. Revenue rose 5% to $862.5 million from last year, but was below Wall Street's estimates of $869.2 million.

Comparable-store sales increased 5.2% at Urban Outfitters in the most recent quarter, but fell 2.7% at Anthropologie and decreased 1.5% at Free People. Comparable retail segment sales, which includes its direct-to-consumer channel, increased 1%, while analysts were looking for growth of 1.9%, according to FactSet.

Urban Outfitters expected to see more progress in Anthropologie's apparel category, but customer response to fall assortments was "lackluster," leading to higher markdowns compared to last year. The company believes it will see improvement in customer reaction to Anthropologie's apparel offerings in the spring and summer of 2017.

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