Revenues fall across all three major brands with stores closed during the pandemic.
The teen retailer, parent company to the Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn brands, in addition to rental subscription service Nuuly and a food and beverage business, posted a quarterly net loss of $138 million Tuesday afternoon, causing shares to slide by more than 5 percent in after-hours trading. The company said the results were preliminary as they include provisional impairment expense and the corresponding tax effects.
Urban Outfitters was one of the first retailers to announce store closures — in the second week of March — to help contain the spread of the coronavirus. The company later furloughed some associates on April 1 for a period of 60 days to help curb costs. Hayne added on the call that in-store traffic continues “creeping up” each week with categories like home and lounge over performing. In addition, Urban Outfitter’s new customer count is up over 60 percent.
Meanwhile, with last quarter’s store closures, some occupancy expenses were deleveraged. But rent remains unadjusted until agreements can be reached with landlords, according to the company. The firm also had a $43.3 million year-over-year increase in inventory obsolescence reserves because of excess inventory and an increased promotional environment. Delivery expenses also increased with added penetration in the digital channel.
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