Just as states are beginning to reopen, breathing new life into retailers, companies are dealing with the reality of the tough quarter behind them. Urban Outfitters (NASDAQ:URBN) reported decreasing sales in its first quarter, but a strong digital program saw gains.
Not dressed up and nowhere to go
Consumers put clothing shopping on hold over the past few weeks as they heeded stay-at-home orders. With millions of people suddenly unemployed, there were also fewer funds for purchases outside of essentials.
As an apparel retailer, Urban Outfitters' net sales decreased 31.9% in the first quarter year over year to $588 million. Comps decreased 28%, partially offset by a low double-digit increase in digital. A bright spot was a 63% increase in new online customers. By segment, there was a 19% decrease at Free People, 24% at Urban Outfitters, and 33% at Anthropologie. Wholesale decreased 74%. Digital sales increased each month and are still rising into the second quarter. Net loss was $131 million and the loss per share was $1.41.
The company said the report is preliminary because it's in talks with landlords to determine occupancy expense, and the results of the evaluation may materially affect the financial statements.
A strong balance sheet
Urban Outfitters came into the first quarter with no debt and has aggressively reduced costs to keep cash positive. The company has furloughed many workers, suspended raises and bonuses, extended payment terms with vendors, and cut travel and marketing costs in addition to other actions.