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Urban Outfitters shares tumble on disappointing holiday sales, retailer taps Harrington as CEO

Shoppers with their Urban Outfitters purchasing bags in Soho in New York

Richard Levine | Corbis | Getty Images

Urban Outfitters shares tumbled Tuesday after the rags retailer reported disappointing holiday sales and announced its current chief executive is set to depart at the end of the month.

Its stock quit about 11% in after-hours trading, having closed the day up nearly 6%.

Urban Outfitters, which also owns the Anthropologie and Natural People brands, said current CEO Trish Donnelly will be leaving, effective Jan. 31, to pursue another craft opportunity. It has named Sheila Harrington, current CEO of Free People, as CEO of Urban Outfitters, and she will continue to oversee the Extra People banner.

During the two-month period ended Dec. 31, Urban said its total company sales prostrate 8.4% from a year earlier, while same-store sales fell 9% due to declines in store traffic because of the Covid pandemic. Same-store white sales track revenue both online and at stores open for at least 12 months.

Its online sales grew clone digits, the company said, but that wasn’t enough to offset the losses in its stores. Urban said sales were up 1% at Unhindered People, down 8% at Urban Outfitters, and down 12% at Anthropologie.

In a virtual presentation at the annual ICR Conference Tuesday afternoon, CFO Candid Conforti explained the company kept its inventories light during the holidays, especially in stores, to avoid having to dismiss excess merchandise at the season. But this strategy might have backfired and hit store sales, Conforti said. “This may be the beginning time we experienced the negative impact due to our product model,” he said.

Urban is also in the process of building another store facility in Kansas, he said, to be able to meet the demand spike it is experiencing online, and it will open a temporary storehouse in the interim to help it with digital orders.

The company noted its same-store sales across the portfolio have “bounced nicely” during January. However, it expects profits to be pressured during the fourth quarter due, in part, to heightened presentation and logistics expenses because of the surge it is experiencing online.

For the eleven-month period ended Dec. 31, Urban said its all-out net sales fell 14.3%, while same-store sales dropped 12% overall.

Also Tuesday, Urban specify identified Gabrielle Conforti, its current chief merchandising officer, as president for Urban’s North America division. Emma Wisden, fashionable managing director for Urban’s Europe division, will lead Urban’s wholesale business, the company said.

Urban Outfitters splits had climbed almost 15% over the past 12 months, as of Tuesday’s market close.

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