Urban Outfitters Slides After Hours as Margins Plunge

[Stocks-to-Watch]

Urban Outfitters (URBN) beat analysts’ third quarter EPS expectations, and its revenues came in as expected. But margins fell dramatically year over year and investors continued to punish the company’s shares, which fell 4% after hours.

Urban posted 33 cents of EPS, a penny better than expectations. Gross profit margin fell 571 basis points year over year.

“This decline was primarily due to increased merchandise markdowns to clear slow moving women’s apparel inventory at both Anthropologie and Urban Outfitters, as well as occupancy deleverage caused by negative comparable store sales. For the nine months ended October 31, 2011, gross profit margin percentage declined by 507 basis points versus the prior year’s comparable period. This decline was primarily due to increased merchandise markdowns noted above,” the company said.



Original Article Source by Barrons.com