The Q3 numbers for Urban Outfitters are finally out, and I must say they are looking good! Company net sales rose 6% over the comparable quarter last year, while retail segment net sales increased 2%. That latter figure includes direct-to-consumer (i.e. website/catalogue sales). Overall direct-to-consumer net sales were up a whopping 21%. This is pretty remarkable when you look at both 2008’s comparable quarter — which was in the midst of an incredible year for Urban Outfitters — and the economy itself, which continues to be sluggish with consumer spending levels down double-digit percentages.
The best news in the press release to me, however, was that Anthropologie’s comparable store net sales were up 3% for the quarter. Anthro left sister stores Free People (down 13%) and even Urban Outfitters (down 5%) in the dust. While that’s bad news to discount shoppers the Anthropologie numbers are postitive news for the greater good. The increase means that Anthropologie can continue to their moderately aggressive expansion initiatives…more stores, special projects like the Anthropologist website, etc. In fact during the quarter Anthropologie opened 12 new stores which is incredible in a recession. But it means we probably won’t be seeing amazing discounts this holiday season.
Urban Outfitters CEO Glen Senk had this to say:
“We were pleased to see continued sales momentum during the third quarter. Our comparable sales steadily improved each month during the period despite substantial prior year comparisons. Considering the improved trend and weaker comparisons in last year’s fourth quarter, we believe we are well positioned entering into the Holiday Season.”
I agree. I think that Anthro’s spring/summer collections missed the mark but they’ve recovered nicely with the fall collection and what we’ve seen so far of the holiday collection. Last year’s Q4 was when the bottom fell out so Urban Outfitters is in position to do much better this year. The Q3 numbers reinforce what Mr. Senk said on the Q2 call — Anthropologie is closest to the bulls-eye out of all 4 Urban Outfitters brands (Terrain being the 4th).
Personally, I think Anthropologie will face greater challenges next year as the economy begins to recover (please let the economy begin to recover!). This year has been rough financially for me as I saw my freelance work dry up. As a result I lost five figures from my annual income and my spending is way down. Now the freelance work is starting to recover and while I’ll need the next several months to pay off bills I’ve accumulated I’m looking forward to the return of discretionary income.
2009 was the year I started shopping at Bloomingdales (and stopped just as promptly, thanks to awful customer service — I’m still burned about not getting the 7 for All Mankind Canberra Hobo I was lusting after thankyouverymuch) and stopped shopping at boutiques. But the tide is beginning to change. Just this month I started going to some of the shops I’d abandoned – Burberry, Comptoir Des Cotonniers, Catherine Malandrino, Nanette Lepore, Elie Tahari, Reiss, Theory, etc. While I’m certainly not back to buying from those places yet and I think my overall spending habits have changed it does mean Anthropologie will have more competition for my dollars. I expect that they will continue to be on their game for 2010. They’ll have to be.
Hooray for Anthro! I think the reason why they have another free shipping promo is because they saw how this boosted company's performance during these hard times.Agree 3% increase in comparable store sales is impressive. Jcrew's dropped 3% during their last quarter report. This reflected Jcrew's dull & boring offerings this year & lack of attractive promos which saw core customers branch out to other stores. Sometimes I feel Jcrew is like a former star student who has decided to rest on her laurels and do the bare minimum to pass. Their Sept & Oct catalogs & rollouts were disappointing. I am hearing the next catalog is just a rehash of previous months. In contrast, Anthro's catalogs & products, particularly this fall, are consistently lovely. Oh Anthro, you keep my heart nervously excited month after month to the detriment of my budget.
Roxy, this is a great post. I agree with you. I think that Anthro will have a great year next year as the economy recovers. For the past 2 years, I have been branching out and buying at different stores, other than JCrew (90% of my clothes used to come from there). But even though I still buy a lot of clothes there, I have found other great stores, including Anthro, where the sizing is more consistent and the customer service is superb. I think that's another great advantage that Anthro possesses over a lot of other stores. Their customer service. The SAs at my Anthro store will sometimes hold things for me for 48 hrs when they don't have to. Anthro has also done a magnificent job with their catalogs. Keep it the good work Anthropologie!
Thanks as always for analyzing all this in a sensical and understandable way Rosy, because usually my eyes glaze over anytime I have to read a quarterly earnings report!I notice Anthro has been getting a little more comfy these days and started to raise the average prices of items that had come down a little bit in the previous year…the trend is probably going to continue I imagine with this news.