{"id":51865,"date":"2023-08-23T04:01:26","date_gmt":"2023-08-23T08:01:26","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/discounts-at-urban-outfitters-are-fading-and-customers-are-choosing-fashion-over-price\/"},"modified":"2023-08-23T04:01:29","modified_gmt":"2023-08-23T08:01:29","slug":"discounts-at-urban-outfitters-are-fading-and-customers-are-choosing-fashion-over-price","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=51865","title":{"rendered":"Discounts at Urban Outfitters are fading, and customers are choosing \u2018fashion over price\u2019"},"content":{"rendered":"
\n

Executives at Urban Outfitters Inc. on Tuesday said they expected fewer markdowns in the third quarter, as more customers choose \u201cfashion over price,\u201d particularly at its higher-end women\u2019s clothing chains Free People and Anthropologie. <\/p>\n

The remarks could signal better news for clothing retailers targeting wealthier and middle-class customers \u2014 but fewer bargains for shoppers \u2014 after a spike in prices for basic necessities last year left people with less flexibility to spend on their wardrobes. While wealthier customers have fared better despite the higher prices, many stores have had to cut prices on clothing to clear shelves. <\/p>\n

\n

Urban Outfitters\u2019 second-quarter results on Tuesday beat estimates. Same-store sales at stores under its Free People and Anthropologie banners \u2014 which also include the Terrain and FP Movement brands and target a wealthier customer \u2014 jumped 26.9% and 10.6%, respectively. <\/p>\n

\u201cThe customer is definitely favoring fashion over price,\u201d Chief Executive Richard Hayne said of customers at Anthropologie and Free People on Urban Outfitters\u2019 earnings conference call Tuesday. \u201cAnd that\u2019s apparent to us. Fashion newness is what\u2019s most important.\u201d <\/p>\n

\u201cShe responds when the product first comes in, and she is less responsive to markdowns,\u201d he continued. \u201cIt\u2019s not to say that price isn\u2019t at all important, but I do think it\u2019s secondary.\u201d <\/p>\n

At Urban Outfitters\u2019 namesake stores, which make up less than half of the company\u2019s sales, customers are still feeling the strain from inflation. And Hayne said the story at those stores was a little bit different. <\/p>\n

\u201cIf the item is right, she will spend a reasonable amount of money for the item,\u201d he said. \u201cBut we do see many of our opening price points overindexing. And so I think that at the Urban brand, the price is probably equally important to the fashion.\u201d<\/p>\n

Shares of Urban Outfitters were up 5.1% after hours on Tuesday. <\/p>\n

Management said on the call Tuesday that as supply chains even out, they believe \u201cthere could be lower markdowns in the third quarter compared to prior-year third quarter,\u201d and that third-quarter sales growth could be in the \u201chigh single digits.\u201d That compares with FactSet estimates for gains of 4.6%. <\/p>\n

Tricia Smith, the global chief executive of Anthropologie Group, said the chain had taken steps to offer more clothing geared toward younger customers, vacations and casual needs. While home-goods sales there were negative during the second quarter, she said customers had moved from furniture purchases common during the pandemic to hosting and entertaining-related ones \u2014 be it glassware or decorative objects.<\/p>\n

For the second quarter, Urban Outfitters reported net income of $104.1 million, or $1.10 a share, compared with $59.5 million, or 64 cents a share, in the same quarter last year. Revenue rose to $1.27 billion from $1.18 billion in the prior-year quarter. Same-store sales rose 4.9%. Analysts polled by FactSet expected the company to earn 89 cents a share, on revenue of $1.25 billion and 4.7% same-store sales growth.<\/p>\n

Executives also noted better gross profit due to \u201chigher initial merchandise markups and lower merchandise markdowns,\u201d as well as falling transportation costs. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Executives at Urban Outfitters Inc. on Tuesday said they expected fewer markdowns in the third quarter, as more customers choose \u201cfashion over price,\u201d particularly at its higher-end women\u2019s clothing chains Free People and Anthropologie. The remarks could signal better news for clothing retailers targeting wealthier and middle-class customers \u2014 but fewer bargains for shoppers \u2014 […]<\/p>\n","protected":false},"author":1,"featured_media":51866,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-51865","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nDiscounts at Urban Outfitters are fading, and customers are choosing \u2018fashion over price\u2019 | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Executives at Urban Outfitters Inc. on Tuesday said they expected fewer markdowns in the third quarter, as more customers choose \u201cfashion over price,\u201d\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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