shares were tumbling in after-hours trading, after the company reported a decline in profit.
The retailer’s gross profit rate, a measure of profit per dollar of sales, declined 2.2 percentage points, according to its news release. The drop was driven by an increase in markdowns of merchandise, the company said, along with higher labor costs. The rise in third-quarter markdowns was partially the result of underperformance of women’s clothing in the Urban Outfitters brand.
Profitability also declined for the first nine months of the year, dropping by 2.3 percentage points. That was driven by “underperforming women’s apparel at the Anthropologie and Urban Outfitters brands,” the company said. Third-quarter sales fell in its wholesale business, as well, thanks in part to markdowns on clothing sold at department stores.
While the company’s third-quarter sales increased 1.4% from the same quarter last year, its nine-month sales declined 0.3%.
Urban Outfitters’ third-quarter report was the latest in a string of disappointing results from retailers.
(JWN) and even former standout
(HD) all sold off Monday on concerns about the strength of the retail industry heading into the holiday shopping season.
Urban Outfitters stock (ticker: URBN) were down 14% to $24.70 around 5 p.m., after falling 4.5% in regular trading. The
slipped less than 0.1% on the day.
Write to Alexandra Scaggs at [email protected]