It's good news and bad news coming from Urban Outfitters
First-quarter sales increased 16% to $314.5 million in the first quarter. The bad news was, the retailer didn't fare too well in April, which helped drag down its same-store sales by 2% versus a 3% decrease this time last year. By brand, Anthropologie's comps increased 2% in the quarter, while Free People's were up by 8%. The core Urban Outfitters brand was weak, though, with a 5% decrease in comps.
Urban Outfitters' press release pointed out some strong points, though. Its direct-to-consumer sales increased by 30%, which certainly isn't too shabby, and Free People's wholesale business increased 12%. The company also said that May, with its more seasonable weather, is already looking better for business, with sales rebounding "nicely" (so far, anyway -- this is still pretty early on, after all).
The retailer blamed April's weakness on the month's unseasonably inclement weather, although if memory serves me, many retailers have also already said that April was a challenging month, because of the early arrival of Easter in March in addition to unpleasant weather. Some of the notable retailers that have already warned about weak April sales figures include Wal-Mart
Of course, results like these speak to the short term, and I have traditionally been optimistic about Urban Outfitters for the long term, given its strong brands, its generally good handle on the customer it targets, its room for growth, and the sense of differentiation it has compared to many other retailers. On the other hand, Urban Outfitters had a very tough 2006, and given the easier comparisons and its intimations that it has been able to more closely align its selections to its customers' tastes, here's hoping the remainder of 2007 is a little more inspiring. And of course, it makes sense to reserve some judgment until we find out more when the retailer reports its first-quarter results later this week.
See the following articles for recent Foolishness about Urban:
- Urban Outfitters seeks to foster its indie cred.
- Last quarter, Urban looked fashion forward.
- Last February, Urban's sales release was unsurprising.