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Urban Outfitters Slumps on Muted Growth Forecast -Breaking

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© Reuters.

By Dhirendra Tripathi

Investing.com – Urban Outfitters stock (NASDAQ:) 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. Covid-19 still has a significant impact on many business areas, causing disruptions as well as cost pressures.

According to the company, there has been a delay in receiving inventory. This is in response to fears that product shortages could result from the well-documented issues with shipping containers and ports. According to the company, it expects to have more inventory by the close of the quarter than the stock it had 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.

According to company, August-October wholesale segment sales dropped 15%. The same thing could occur in the current quarterly quarter. Due to reductions in sales of Free People Group to its promotional wholesale clients, wholesale sales fell 3.3% for the third quarter.

The third quarter’s total sales rose by 15% to $1.13 trillion. This was an increase of 15% in sales. The adjusted profit per shares beat all estimates by 89 cents.

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