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Investing.com – Urban Outfitters stock (NASDAQ:URBN) plunged 12% in Tuesday’s premarket trading as the company’s quarterly outlook failed to impress.
The company’s muted growth forecast of just 16% sales growth in the current quarter came with a warning of higher labor and raw material costs and supply chain challenges. The impact of Covid-19 is still driving numerous disruptions and cost pressures in many areas of the business, the company said.
The company said there is a delay in tthe receipt of inventory, vallidating fears that the much-documented problems with ports and shipping containers would lead somewhere to product shortages in the coming holiday season. The company said it hopes to have more stock by the end of the quarter than it did two years ago.
Retail segment sales grew 16% in the third quarter and the company said comparable sales growth “could land in the mid-teens range”. Retail sales comprised around 92% of the company’s total sales in the second quarter.
August-October wholesale segment sales fell 15% and the same could happen in the current quarter as well, the company said. Wholesale sales were lower in the third quarter owing to the company reducing sales of its Free People Group brand to promotional wholesale customers.
Total sales in the third quarter rose 15% to $1.13 billion. Adjusted profit per share was 89 cents and beat estimates.
