Urban Outfitters (URBN) is trading lower today after reporting what are being seen as disappointing comp numbers last night. In terms of background, Urban Outfitters operates a portfolio of consumer brands comprised of Anthropologie, BHLDN, Free People, Terrain and Urban Outfitters brands and the Food and Beverage division.
It operates 246 Urban Outfitters stores in the US, Canada, and Europe and websites; 228 Anthropologie Group stores in the US, Canada and Europe and websites; 132 Free People stores in the US and 12 Food and Beverage restaurants. Free People wholesale sells its product through approximately 1,900 department and specialty stores worldwide, third-party websites and the company's own retail stores.
A bit more about the brands, its flagship Urban Outfitters brand targets young adults aged 18 to 28 through its unique merchandise mix. Its customers are culturally sophisticated, self-expressive and concerned with acceptance by their peer group. The product offering includes women's and men's fashion apparel, intimates, footwear, beauty and accessories, home goods, activewear and electronics. A large portion of its merchandise is exclusive to Urban Outfitters. Its stores are located in large metro areas, select university communities, specialty centers and enclosed malls.
The Anthropologie Group consists of the Anthropologie, Bhldn and Terrain brands. URBN initially operated the Bhldn and Terrain brands as standalone concepts but ultimately determined that the Bhldn and Terrain brands were complementary to the Anthropologie brand and integrated them into the Anthropologie Group during FY15 and FY16, respectively. The Anthropologie brand tailors its merchandise and inviting store environment to sophisticated and contemporary women aged 28 to 45. The brand's unique and eclectic product assortment includes women's casual apparel and accessories, intimates, shoes, beauty, home furnishings and a diverse array of gifts and decorative items.
The Bhldn brand emphasizes every element that contributes to a wedding, including wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie and decorations. The Terrain brand appeals to women and men interested in outdoor living and gardening. Terrain's product offering includes home and garden products, antiques, live plants, flowers, wellness products and accessories.
And finally, its Free People retail stores offer private label branded merchandise targeted to young women aged 25 to 30. Free People offers a unique mix of casual women's apparel, intimates, shoes, activewear, accessories, beauty and wellness, home products and gifts. Free People retail stores are pretty small and are located in enclosed malls, upscale street locations and specialty retail centers.
Turning to the same store comp data, Urban Outfitters said that comparable retail segment sales increased +2%, driven by strong, double-digit growth in the direct-to-consumer channel, partially offset by negative retail store sales. By brand, the results were: +5% at Free People, +2% at the Anthropologie Group and +1% at Urban Outfitters. Wholesale segment sales increased 6.8%.
In sum, while the comps were not great, they were not horrible either. The negative result at its brick-and-mortar stores is being viewed as disappointing. Also, the stock is down so much probably because it had rallied so much in the past couple of months. The stock had been up about 35% since mid-November when URBN reported nice upside with its Q3 (Oct) earnings report. So even mediocre comp data is being seen as a reason to lock in some profits.