Urban Outfitters Blames Drop In Sales On 'Missed Fashion Calls' And 'Off-Pitch Marketing'

Urban Outfitters' namesake brand suffered a 1% decline in same-store sales in the most recent quarter, while its Free People and Anthropologie brands saw double-digit gains of 13% and 30%, respectively.

Ted Marlow, CEO of the Urban Outfitters division, attributed the brand's disappointing performance to "missed fashion calls, off-pitch marketing and poor creative execution."

"In a word, we came up short," Marlow said Monday on a call with analysts.

Specifically, one category where Urban miscalculated demand was in women's pants.

"We placed a bet [on certain fashions] and we didn't cover the volume that we wanted to cover on that," Marlow said.

He added that the brand may have been "too aggressive" with certain men's styles in apparel.

Further magnifying the brand's fashion problems in the third quarter that ended Oct. 31 was an extremely promotional environment, with competitors such as H&M and Forever 21 offering apparel for as low as $9.

Marlow said Urban Outfitters is hesitant to change its pricing, despite the environment.

"It's not particularly good strategy, considering the markets we're going after," Marlow said. "Most of the customers we try to serve do not particularly like promotional activities."

He declined to give a specific timeframe for when he expects Urban Outfitters' sales to return to positive growth, saying only that the brand's problems are "not something that can be corrected overnight."

Despite Urban Outfitters' performance, the company's net income rose 18% to $70.3 million in the third quarter, compared to last year.