Urban Outfitters: Retail Bubble Has Burst

Urban Outfitters Inc. (NASDAQ:URBN) CEO Hayne Hayne Richard on Tuesday, 7, after the fourth quarter and annual performance analysis room conference call, according to the overall performance of the group and the industry has made a conclusion that the retail bubble has burst.

Richard Hayne points out that the trend of closing down and rent declining will even deteriorate in the near future, and the increase of discount and endless promotion will push up inventory and eventually squeeze profits.

Urban Outfitters Inc. is unavoidable victim.

In the fourth quarter of 2017 fiscal year ending January 31, 2017, the group's net profit fell by 11.8%, down from 72 million 878 thousand US dollars in the previous year to $64 million 288 thousand, and EPS fell from $0.61 to 0.55 US dollars, slightly lower than the $0.56 expected by the market.

Net profit for the whole year also decreased by 2.8% to 218 million 100 thousand US dollars per Annex, which has been down 3 years, but EPS has risen from 1.78 to 1.86 US dollars.

The group's stock as at the end of January was $338 million 600 thousand, an increase of 2.5% over the previous year's US $330 million 200 thousand.

Gross margin narrowed by 150 basis points to 33%, mainly due to the increase in delivery costs and other logistics expenses.

Richard Hayne said that the group will continue to put more resources on the fastest growing online channel by accelerating delivery speed and innovation.

To focus on the "new and the next (trend)".

Although the growth rate of e-commerce in the fourth quarter has reached double digits, it is completely offset by the extreme weakness of physical stores. The overall sales volume can only be as flat as that of the previous year, while the FactSet growth rate is expected to grow by 1.4%.

In February, the group announced that the two brands of Urban Outfitters and Free People were 2% and 1.2% respectively, but Anthropologie fell 2.9%.

Wholesale sales also fell by 1%.

Quarterly net sales rose 1.7% to a record $1 billion 30 million 200 thousand, but still slightly worse.

The projected $1 billion 50 million.

Net sales in fiscal year 2017 totaled $3 billion 534 million 800 thousand, up 2.9% from 3 billion 445 million 100 thousand in fiscal 2016, 1% in the same store, and 11% in wholesale business.

Richard Hayne Hayne compares today's retail industry to the US real estate market.

He thinks retailers have increased too much sales in the last 90s to the beginning of the new millennium, especially clothing sales.

"Thousands of shops opened and created a bubble similar to the real estate market, and now the bubble burst," he told analysts.

According to the world clothing shoes and hats net, the number of American shopping malls decreased by 5.9% in January.

No matter it is Macy 's Inc. (NYSE:M).

Retailers such as J.C. Penney Co. Inc. (NYSE:JCP), Penny department store and other retail retailers, or Gap Inc. (NYSE:GPS), have announced a large-scale layoff plan. The parent company of Ann, Tarylor and Lane and other large brands have also indicated that they will soon streamline their retail networks, not to mention the brands that have gone bankrupt.

Richard Hayne pointed out that Urban Outfitters Inc. did not abandon retail, but regarded entity stores as equal partners in online stores.

In the fiscal year, the group still intends to open 18 stores and 1 restaurants, less than 29 in the 2017 fiscal year, and this year it will close 7 stores as the lease expires, just like last year.

Urban Outfitters Inc. (NASDAQ:URBN) on Tuesday, 7, was closed at $25.42, down 1.05% from the rest of the world, and further down 4% to 24.40 dollars after the session, closing the 52 week low of 24.29 dollars.

So far, the stock has fallen by 10.8% in 2017.

More interesting reports, please pay attention to the world clothing shoes and hats net.