Urban Outfitters misses expectations in preliminary Q1 results

Retailer Urban Outfitters missed expectations in its first quarter preliminary earnings report, largely due the impact of coronavirus. However, there is optimism as same-store sales in May are trending higher. Yahoo Finance's Emily McCormick breaks down the details.

Video Transcript

ALEXIS CHRISTOFOROUS: And speaking of dismal, we've got Urban Outfitters out with its results, missing on both the top and bottom line. They're calling this preliminary results, but nonetheless, not looking too good here, Emily.

EMILY MCCORMICK: That's right. So already seeing top results in these preliminary earnings estimates that we had for the three months through the end of April. We saw Urban Outfitters swing to a loss per share of $1.41 on net sales of $580 and 1/2 million. That sales figure was down 32% over last year.

Taking a look at Urban Outfitters' three brands, we had Anthropology the weakest in terms of comparable same-store sales. Those were down 33% over last year. The flagship Urban Outfitters brand sales were down 24%, and Free People comps were down 19%.

Now on their earnings call, they did say that May digital comparable same-store sales were trending better than they've seen in April, and they did say that their digital sales were better overall during the reported quarter than their physical retail locations, which is to be expected given the mandated store closures that they had to endure.

Now to your point on these being preliminary results, the company did say that the impact from the coronavirus pandemic has meant that it will need to perform an impairment assessment on its long-lived assets, and these earnings results do include a provisional impairment expense and related tax effects, which Urban Outfitters said are currently being evaluated.

Taking a look at that stock, we have those shares down just about 3.4% in early trading, another sign of the difficult environment we have, especially for clothing retails during the pandemic. Alexis.

ALEXIS CHRISTOFOROUS: All right, Emily McCormick, thanks for that.