Urban Outfitters out of fashion as profits slump

URBAN OUTFITTERS, the ultra-trendy US retailer, saw pre-tax profits in Ireland plunge from almost €2.1 million to €553,026 in the year to the end of January 2010.

The company did not give an explanation for the drop in profits, but said risks and uncertainties include changes in economic conditions, consumer spending and demographics, changes in fashion, competition within the retail industry and reliance on foreign production sources.

Turnover in the year was down from €8.6m to €6.2m. Gross profit was down from €5m to €3.5m.

The company’s wage bill in the year was just under €1m, a slight decrease on the previous year. The retailer employed 69 people in the year, the same number as in the previous year.

Urban Outfitters has two stores in Dublin: at Dundrum shopping centre and in Temple Bar.

Headquartered at the Philadelphia Navy Yard, Urban Outfitters is a publicly-traded American company.

On a group level, Urban Outfitters recently reported fiscal third-quarter profit that surpassed analysts’ estimates. Net income rose 17% to $73.1 million (€54.6m) in the quarter ended October 31, from $62.3m a year earlier. Third-quarter net sales increased 13% to $573.6m (€429.65m) from $505.9m (€378.95m) in the same quarter last year.

“Promotions had been somewhat high and there was some investor worry heading into the quarter,” said Edward Yruma, a New York-based analyst for Keybanc Capital Markets who recommends holding Urban shares. “Results were decent. The company is clearly aggressively repurchasing shares and feels good about the holiday season.”

Sales at stores open a year rose 1% in the third quarter and will show the same gain in the current quarter, said chief financial officer Eric Artz, who added. “We are well positioned as we head into the holiday season.”