Investing.com – Urban Outfitters Inc (NASDAQ:URBN) traded lower on Wednesday, after the retailer posted weaker-than-expected fourth-quarter results.
Shares of Urban Outfitters slumped to a 14-month low of $22.87 intraday, after the retailer revealed earnings of $0.55 per share against estimates of earnings of $0.56 per share.
The retailer posted net sales of $1.032 million for the fourth quarter, up 1.7% compared to the same period last year, but below estimates of $1.037 million.
Comparable sales remained flat as CEO Richard Hayne said “higher markdowns than expected” weighed on holiday season sales and pointed out that the increasing number of stores selling apparel is one the broader problems in the industry.
“The U.S. market is oversaturated with retail space and far too much of that space is occupied by stores selling apparel,” he said. “Retail square feet per capita in the United States is more than six times that of Europe or Japan. And this doesn’t count digital commerce.”
Some analysts remained bearish about Urban Outfitters’ ability to grow margins amid a period of a slowdown in foot traffic in malls.
William Blair analyst Dylan Carden downgraded Urban Outfitters to Market Perform on Wednesday, and warned investors that near-term investment spending and a "more subdued" comparable sales outlook should continue to delay margin recovery.
Urban Outfitters’ last traded 3.6% lower at $24.49.