Analysts Trim Outlook For Urban Outfitters Inc.

Urban Outfitters Inc.

made its second apology in a month Thursday, this time for falling same-store sales it said will hurt profits in the current quarter. Urban Outfitters fell more than 15 percent Friday to $29.15 a share. The Philadelphia-based company last month issued a far different mea culpa, apologizing for its sale of Kent State sweatshirts stained with faux blood evoking the 1970 shooting there by the Ohio National Guard that killed four students. http://www.cleveland.com/metro/index.ssf/2014/09/urban_outfitters_issues_apolog.html "Marketing mishaps like these push customers away," Macquarie's Laurent Vasilescu said Friday, although he didn't blame the recent profit warning on what is Urban Outfitters' latest departure from good taste. A list of past mistakes includes yellow T-shirts emblazoned with the Star of David and another with the slogan "Kiss Me I'm A Drunken Irish" as well as other questionable items. But Vasilescu did cut his price target 17 percent to $32 and maintained a Neutral rating. "The broader question is whether these are company specific missteps" or are symptomatic of a larger slow-down in apparel sales, Vasilescu said. Urban Oufitters' sales warning suggest may suggest a slowdown at its high-mark-up Anthropologie store brand, which could spell trouble for results in the fourth quarter and 2015, according to Barclays' Matthew McClintock, who maintained an Equal Weight rating Friday. McClintock said margins will continue to be hurt by a need to meet competitors' promotional pricing in the holiday shopping season, and in any case, repositioning Urban Outfitters to reignite growth "isn't a short-term undertaking." But Jeffries' Randal J. Konik said slower sales at the company's flagship Urban Outfitters' stores "likely remains the albatross." Konik maintained a Buy rating but cut his target 10 percent to $45 a share. Canaccord's Laura Champine trimmed her target 4 percent Friday to $47 a share, but maintained a Buy rating and likes what she sees. "We're seeing better fashion in the stores and expect a stronger assortment for the holidays," Champine said. The company's recovery, however, "is clearly moving at a slower pace than we expected," according to Champine.