Urban Outfitters, Inc. (NASDAQ: URBN) stock lost over 1.3% in the pre market session of March 6th, 2019 (Source: Google finance) after the company posted mixed results for the fourth quarter of FY 19. URBN in the fourth quarter of FY 19 has reported the adjusted earnings per share of 83 cents, while adjusted revenue growth of 3.7 percent to $1.13 billion in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $1.14 billion. Negative comp store sales resulted from a lower number of transaction, units per transaction and average unit selling price. Traffic was negative in North America and Europe, with Europe experiencing more significant traffic count.
During the quarter, URBN had opened four new locations, including three new Free People stores and one Urban Outfitters store. The company also closed seven stores in the quarter: four Urban Outfitters, two Free People and one Anthropologie. Gross profit increased 9% to $373 million, while the gross profit rate improved by 172 basis points to 33%. The rate increase was primarily driven by better-maintained margins due to lower markdown rates and improved initial markups.
Same stores sales increased 3 percent, while analysts forecast an increase of 4.5 percent. Comparable Retail segment net sales growth is driven by double-digit growth in the digital channel, partially offset by negative retail store sales. Digital growth was driven by increased session and conversion rate, while average order value and units per transaction were down for the quarter. The store channel recorded a negative comp, which was the first time this year. By brand, the Retail segment comp grew by 4% at both Free People and Urban Outfitters and by 2% at the Anthropologie Group. The URBN Wholesale segment sales grew 3% for the quarter. This growth was driven by Anthropologie’s Home wholesale business. Free People wholesale revenues were slightly positive for the quarter with sales of full price customers up in the mid-single digits.
During the year 2019, the Company had repurchased and subsequently retired 3.5 million common shares for approximately $121 millio. During 2018, the Company repurchased and subsequently retired 6.0 million common shares for approximately $111 million under a share repurchase program authorized by the Company’s Board of Directors on February 23, 2015, completing such share repurchase program in August 2017.
For the first quarter, analysts predict earnings of 39 cents a share on sales of $879 million.