URBN - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen and welcome to the Urban Outfitters, Inc.

First Quarter Fiscal 2020 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder this conference call is being recorded. to Relations. call like Director Oona now Investor of would introduce to the McCullough, I Ms. may you McCullough, begin.

Oona McCullough

the those press and Please forward-looking first operating XX, conference may afternoon, XXXX. quarter results afternoon results note fiscal issued statements. Good welcome period materially discussions differ XXXX that call. to for the The Earlier actual ending financial following outlining statements. the release the X-month URBN company from and a April this include may

could cause projected that results to in Additional company’s from factors information the actual differ materially Exchange results the concerning Commission. contained is Securities fillings with and

will with We Richard Officer. Chief Executive call today’s Hayne, begin our

the text corporate Dick. call posted of the call conference to usual, website will I our www.urbn.com. be turn over As at to today’s now will

Richard Hayne

trying with good presentation the new beginning Under but each give to overview closed, and community to a rotating then creates to more concerning digest at after better the markets the and give afternoon. new on the the I shortly the call. and color are call. our investors the released format, an call, information ask interaction results our prior initiatives before quarter This web we brand we Today make a It’s At portal call. a brand. brief read leader on conference to will Oona the opportunity the our business analyst a and and communicate designed printed for of basis commentary format productive. Thanks, more with to their

thoughts results. will Frank Following offer our future that, on

the open call questions. then We your will to

now suggestions and welcome and we always for overview. improvements. feedback Thank my As for you

portfolio, many to includes Nuuly. Outfitters wardrobe, rent a pleased other favorite our of the addition as well is items new women is Free monthly which products Urban to a am a their new the from brand I and subscription with service, for as from brands brands. the offering, where way announce subscribers People called interact fashion from nationally Anthropologie, to Nuuly recognized First Nuuly their own URBN

new Dave accessing detail the fashion. We very moment. the concept excited of about this will are President approach discuss in more in Nuuly to a Hayne,

nicely report a But difficult I sales X% weather negative. Moving on robust am in retail you to segment URBN’s comp positive rebound. quarter were recorded company we slightly planned. last to posted less strong first comp. results, pleased in been solidly business as a March, so the and broke, total When positive, sales than March April comp to spoke had the although were early

Urban comp America Taking Europe North brand difficult quarters and given X%, see negative QX. This uncertainty. many results in April Urban May shift. to traffic quarter, growth, expected economic plus was delivered a two in the larger flat. challenging After bigger was X%. We build comp surprising a political plus given store due and of strong current the was been People for are comp, X% plus a in has Free the misses product to at Anthropologie our some Easter Total brands. In and business the first to-date away, European in isn’t business

Many the the right spending quarter brand so now has of As strong persisted while there in fashion quite ago. consumer believe strong the previous gains, mid the overall for early store comp as favorable. believe perspective, delayed comps like in I and sentiment rising. potential of channels comp a we the spending recorded smaller is channel which traffic inhibitors retail We is correction refunds, months demand government I diverge XX are behind in market remain stock negative. double-digit extremely shutdown single-digit of bottom the tax are and steep quarter. This in substantially. remains growth. market or the well. The results for wages job digital identified quarters, stages Each were poised negative The a by into is cycle, us, experienced From current QX store product.

that positive comps. drive is of there plenty of cycle, newness part As to

that the last apparel Our If been able sales the job as to delivering and revenues comps grew accurate a compelling core the larger all progresses. businesses. brand misses. People customer positive to dollars. execute trends But People the gains comps. they trends two nicely solid retail category, specially at and is also more believe that by single-digit improve I interpreting quarter while currently Free brand versus and as fastest in assumption segment and that with to quickly apparel merchant stores of posted this the QX could by wholesale should for The mid due year e-commerce merchants knowledge. deliver looking The remainder number product segment a with The Free the teams the is wholesale We have rate, clarity now should brands movement Ranking is same Free on up led deliver to added total of for on wholesale year. correct, be most able X% interpret are and People department have quarter what QX the began sales recover were team products. less this believe period is year. excellent

for XX,XXX today, our service I pass for their dedication shared interest call work, I partners support. amazing want our and I their our creativity. thank I hard leaders. to Before many And continued thank I world. our brand associates and around worldwide the thank and thank also the shareholders creative finally,

us tell Nuuly. about now Dave, Okay,

David Hayne

subscribers is and custom-built their our robust for pieces a subscribers platform. to wear third-party one own via month, and them labels good of styles monthly Nuuly kind URBN Today, will next as Thank A excited fall month, a can designer six worth brand, new per often way one new subscribers into rent their of price. for as experience our brand digital per to then a freshness variety vintage box and the select each they If into on renting $XX everyone. cost clothing. of while latest something Nuuly introduce love box value a wardrobes. offering we service afternoon with they $XXX are of infusing concept, month, item per for like, a subscription in with retail initial tenth purchase over styles will swap and it, Nuuly. month average you it. offering Subscriptions

they URBN give desire. is the shopping Our to mission creative at compelling experience customers

of than is and new economy also variety a plan lower at labels of have of omni-channel over people to these double shifting wear Nuuly style has group of pieces. week many As interest XX many year’s for been alongside industries. growing cost to and per by will giving zero more options mobile, Anthropologie, dresses And and nationally sizes constant seasonal and premium preferences across with a one toward Urban to petite recurring sustainability. committed assortment and the a selections solving quest a to designer over of subscription well seeks models and denim in XXX over as rent have from made styles dedicated we years behaviors been shifts. over cross-functional newness, option the curated subscribers current a by launch, recently fashion a millennial sustainable everything We end. sharing paradox to A recognized our At lifestyle. apparel. vintage job business. outerwear the triple to a especially substantially that organized Outfitters, supporting life. in offering growing styles millennials to and URBN Free apparel, XXXX breadth, are The lifestyle categories count the access desire of further as people with to size for the of retail, More investments flow wide has our offer and and including everyday provide success customers these brands Nuuly and our including XXX to substantial fashion observed for support bring shifted hundreds industry, novelty, per kind over will particular has of e-commerce, the mission launching while customers assortment and in seeking it Nuuly from XX, assortment span plus

dedicated aspects the business. driving managers who needed complex data in technology power and are the on scientists, have of team product the all user a data of focus engineers, We experience, to developing invested a with

We veteran a by fulfillment Philadelphia, dedicated outside have laundry technicians. built operated and which warehouse center houses equipment laundry state-of-the-art

brands believe women’s on for the the have $XX apparel of operation, revenue run anticipates billion periods months within XX,XXX US. XX of approximately become to Nuuly the a Additionally the would dedicated at We a million large exceed which creative there marketing, our close. which subscribers rate in teams $XXX opportunity market are merchandising known. lifestyle and aspirational focused curating reshape is experience

is and react to We several subscribers our believe hundred few interest prepared thousand are years, in possible. to subscriber stronger first

forecasts with millions all and enters are histories, of new long-standing preference customer speculative URBN underway. Nuuly proprietary advantages. operations as our brands the assortments, rental existing with their We strategic with landscape However, brand as creative our rental to When know-how paired bring many subscription relationships the rich businesses, to until the distinctive the are uniquely is capital. ability subscription we experience and distribution proven point-of-sale as with customer investable partnerships, network modern positioned lifestyle develop a broad brands, desires. deliver well Nuuly believe operational dynamics deep

Thank launch, turn begin be summer Frank are very months from excited you launch As over XXXX Starting Officer, notified very learning customers Nuuly join today to X for can call I to I than customers. can at the sure less will Chief a nuuly.com we much. to am you interested Conforti. to platform Financial our tell now from today. that’s nuuly.com, waitlist the

Frank Conforti

everyone. you, Thank afternoon good Dave and

profit for decrease gross penetration due could and the growth. underperforming consider of believe quarter markdown from comps. low sales sales for in our quarter-to-date we performance, on our Based the and The our out entered the SG&A the first on in below expenses quarter in second you to As and could de-leverage our performance Based well and digital relate we it quarter. margin maybe XXXX, URBN support could be quarter single-digit trend growth approximately clear year believe investments helpful following: fiscal by the marketing occupancy quarter. gross store resulting higher internal retail negative SG&A have started expectations. sales digital quarter the to more The by do X% financial If single-digit as negative second rate higher to channel be a of primarily as points. segment delivery, for could comp sales current comp in rates than store low digital we range margin for come basis we URBN come grow could believe plan, to leveraged in sales products to negative, our XXX sales logistics

business. rental Additionally, SG&A will the with expenses include approximately $X of of subscription associated our million Nuuly, launch new

and tax XX.X% planned approximately year effective stores spend expenditures quarter and additional XXXX distribution opening in European approximately prior fiscal full increase to of related our new for is annual to The investments is primarily year. planned rate the Our facilities, the planned the year million. be are fiscal the $XXX second office. new Capital and the home for to for expanded at and

constitute obligation That to update As current reflection a does your foregoing remarks. and now our the simply prepared company forecast, not views. forward-looking questions. is statements. a our of any a The concludes Thank reminder, you for but disclaims

Operator

you. of Adrienne Please Research. from question Wolfe line ahead. first go Thank Your from [Operator the Instructions] comes Yih

Your line open. is

Adrienne Yih

think I very have from sourcing, think the question on is high. is exposure the to China I that known Thank last My I XX%, you number that’s much.

with then So, you and tackled that able already from you Thank with the that to us where launch? any some wondering offset also with, quickly on XX% And us gross the the you Frank you. brand you margin can on in really us David, the remind like how payback can that’s brand goods you pressure period and how vendors and share are new guess, are a home evaluation? in launch, I congratulations process if remind or the

Frank Conforti

Adrienne, is Hi, this Frank.

two kind As to it that relates to of question. there was think tariff, parts I the China

the on is that enacted. was already First XX%

on based impact mentioned, on this home and certain this very into And minimal plans. was accessories you our mostly think As forecast, our have and is we our business going already to baked on is products.

in exposure the the market hit on As relates and to have been on overall to we working to XX%, expect close we we possible our to expect this China based We did where ended XX% where down to it would with the proposed China is year year last close into that getting this XX%. our strategies reduce to June, and coming of year. exposure under goal

give as the One is to that be to to I multiple our reducing penetration overall some pricing I consumer. as there existing are obviously in address is relates is market value with, expect the vendors much as market. to potential areas you because mitigate price relates in it negotiating dollar and there that can can’t the As tariff, related on a lastly that number will how within then that risk. of And it course you said, XX% that impact doing now, we stay things in the our increase would on right of to with the for passing certain

there is So, on that to of multiple a strategy. a of target kind day-to-day pieces kind basis. It’s moving

does play obviously call. our next will to we have it into talk June, So, about in go if more on

you excited extremely obviously tell I But would it Nuuly is of financial and financial relates that has publicly it available a it the have this out comparisons I lot which as So, out asked even yes, to there. concept you less say for that would us a comparisons are model, about, we financial that doesn’t new about. believe are there I

the for and expense acquiring SG&A and with associated new financial year customers brand supporting the teams brands the will Our launch, mostly business. support this awareness, the be to around

the to will we as talent on the takes support the model. year to of back summer I acquisition, will would Our the launch puts in I to being we off year. believe to speak Therefore, with quarters that get the We of distribution believe we think do honestly as building mentioned participation to working launch you say in of we in and be And greater going we in later give rate we the item and August, as already associated will be the the get second brand. we business a of on for begin goes. the for will such metrics our expense the our we With spend – the depend obviously SG&A on a that has the with as I in on are count half Nuuly have leverage is certainly brand be quarters will when on you you being for how the $X that brand. a able model second half approximately assumptions of of planned detail launch build able to anticipate strong until belt, a customer use about subscriber line to I is most a spend be under that it. the certain quarterly What and we we planning hitting sense several will it’s once Initially, investments lot and better as that we to dilutive quarter call relative that said, sharing this of on some believe I few well retention the of say the with Dave be expectations that that focused first will of basis. million we our

breaking segment, its in the we and as as business which it. out as us help understanding be hope modeling will you Nuuly communicating will with own business We well

I longwinded anticipated So, that was as expect. know answer can question. the a you We rather

So, move I now. will on

Operator

Your Morgan next Stanley. ahead. of line Please question from comes Greenberger from the go Kimberly

line is Your open.

Kimberly Greenberger

what’s identified commentary have I think you. Dick, thank mentioned your now working the merchants that apparel. you in Great, in

get quarter about the decline improvement And inventory am through will the second and wondering in Frank’s expect low the improve Thanks. through be in be second the sort so flows in comp would insights sales a the reflected newer expectation reflected commentary quarter? we for as possibility when I you for to the single-digit of is second you quarter. your

Richard Hayne

is this Kimberly, Dick. Hi,

is school all, aesthetic. in commentary and been it I to fashion to for do been out it yes, merchants earlier. now of there, and which have expect is the we that information, think First Frank’s is one much come see to we reasons, in to would it their sales and expect back we I reflected suited we information later rather with have than to powerful, that dealing improve orders. fall two very quarter a the trend using have more place is, The more

for for So, as right for And XX% third not but that, only quarter. think believe I approximately think QX now I that the bodes we are and July, I well QX. open

a we So, and should to have lot of wiggle room there become accurate. I that much we more think

Operator

Lynch. line Your next Please go is question comes Hutchinson from Lorraine the your America of line Merrill open. from Bank ahead, of

Lorraine Hutchinson

afternoon. Good Thanks.

commented in your call have open that the XX% buy. to about early second You you March on quarter had of

expect? inventory, gross behind reconcile pressure plan just you basis that that XQ the you some Did level to just commentaries So, margin the margin carryover for the with maybe you you of XXX gross that points made? have aggressively, with could rationale

Richard Hayne

but inventory incorrect, been it good as bets what the the that we – to will what say. have February We that that has dealing buy, had I I I feel brands not free we add made than very inventory larger with incomplete. I’m to very, open better was But and to information should early we when in not either had February. of that it on in wasn’t information as it’s Sure. some some – going argument But March we were still been. think XX% and

underperforming, meaning last did And more so selling year. a slower this than that styles we have style, through year are rate we at

up. So, the go markdowns will

if our I we think to that results in isn’t our history, history. have and history our year our last it in in of had recent probably You remember best markdown it’s

clean, coming last very, and will little it a year very are a be we year off this So, sell-through less.

Operator

JJK Research. from line Please question comes of next Kloppenburg go Janet Your from ahead.

open. is line Your

Janet Kloppenburg

Hi, everybody.

Richard Hayne

Janet. Hi,

Janet Kloppenburg

was missteps. could wondering bit execution a you the Hi. little talk Yes, if I about

gone too to them of the talked quarter. first help could through to had about quarter comps the that understand as Maybe context if we the early. like would better you spring the bear missteps it think we you us understand in I move improving

might of understand do well. And just, SG&A coming some to expected. can you Frank than in easing are levels it think have us your as help I with comparisons better

them to to expect Thank the us we guided elevate, had elevated to you. You that? continue be to Should assume in half. second

Richard Hayne

Janet, Dick again. this is

across execution I all, our the equal of isn’t think First board.

in Free two well executed said commentary, less the I than my larger People. brands As

I well. think very Free executed People

did we the two one I happened what terms of as couple about one is problem. couple casual narrow, with to a it, they it we’ve brand, Urban I the hit not Anthropologie we and a and attribution as would meaning should they the hit the should the attention One the to we think much good is, think missed. they with customers that of have. are said, deal they At the we that and thing So, miss brands, them. aware – not Again of or two pay wasn’t of say as assortments have pretty product casual there in just they that to much larger just what our of that’s and had did caused a as of I – as wasn’t some brand, to the explain think didn’t there try concepts think as went things, And of I I

we what forward. happen pretty I And is of think going would we’re to to going going get expect forward. accurate us more I aware think

Frank Conforti

question. we going, another keep get Sorry,

Operator

Citi Lejuez ahead. from comes go Research. question Paul next line of from Your the Please

open. is line Your

Paul Lejuez

Hi. Thanks, guys.

even view I on on going customer? this that drives related much on is a in marketing will be new separate? service a membership Just curious And the how customer for to the sites in going pushing kind I newly guess digital question of just you to terms your just new am it is branches something different stores marketed what or of be that of your the be existing a completely to or an rental versus business, Thanks. question,

David Hayne

the Yes, of is is hi, percent Thanks and – brands customers customers. for Paul. the there the existing there overlap think be our We question. substantial to Nuuly new between do going

definitely I think possibility. a that’s

our but likely also will yet haven’t not the see new or we who either some think participated brand, so. have into with yet thought other it, have brands done about Nuuly customers I

think closely that sure. that’s plan eye keep be an on can do possibility. it a I track to that So, for We very and something we

But planning reaching the to think customers are our introductions also a existing customers Nuuly here. merits as to out partners exploratory new on some do we brand we’re We with alone concept. for attracting the brand be part, of and the going most of Nuuly to

and it’s something the So, watching to that’s be plan we’re approach to monitoring certainly going tracking, out but and now. it for

Operator

next Your ahead. line Simeon Siegel from go Please of comes Instinet. from question

Your open. line is

Simeon Siegel

Good guys. afternoon, Thanks.

on different clearing a follow maybe XXX really that you this good have a It to, up just delivered side. of inventory quarter. bps job Just looks Frank the like from did

But guess, guard at David any when you And it look talk Thank – a starts about on right – and you different don’t or to color regard? as like needle. and I management on move when that that does maybe you’re can you. Frank So, where thoughts the now, then what Nuuly inventory where rails sit to there on when missing know you if feel you I model? where as

Frank Conforti

is Simeon, Sure. Frank. this

question second On first and why of than half we worse for it essentially the quarter the the related believe could margin thoughts be to first, your QX.

right. You’re

for being down. in said, the right comp line now X at That with the was inventory where our quarter. Our trends first are plus is our

now. through we’re we two apparel. some digits move women’s down incremental of and and in brands markdowns bigger to underperforming Urban primarily which And it’s right Anthropologie, is the that know take believe You the both at to Outfitters product, that single mid going

that the As we comp up quarter Dick second hit remember in and also put did year low record near mentioned, markdown a last rates. XX please

the first in comparison the we than is quarter. more also difficult what So, itself have

occupancy larger comps greater store do store line contributing well. are experienced we in the would would is if Right quarter is store And and drive quarter. what up negative the worse the first occupancy. negative in item second comps store with we year-over-year quarter in in as that on end comps now deleverage store a low as to single-digit the be additionally basis than Secondarily, decline a traffic our

David Hayne

to I to at inventory directly interesting this so, to separate subscriber jump is we’re other we the to the and subscriber just brands. asked the Nuuly will by going The about you be Simeon about independent and concept the the And from in, inventory way need inventory and that inventory think, thing management. carry Nuuly for the the to this is to our our our to in tie count is our that number going to But that tied inventory metric. is count inventory need units model going going drive be directly of

So, to subscriber will growth, as to that see we we need buy growth. commensurate

and business. going that be something of something the it’s obviously So, but to we going that’s will be to tied tracking the be very performance monitoring, also to much

Operator

from next comes Shapiro line ahead. go The Tracker. Marni Your from Please Retail question of

line open. Your is

Marni Shapiro

that Hey, Are congratulations am the the David assuming on you into I about any a factored all your you conversation each this. number? per that rent I’m and this I couple around can cost Is so per Nuuly. giving some for guys you the cleaning know jump built And The But garment the talked metrics all price bandwagon the rentals I the of a to how per about I said the and of here. facility? in wash factor own cleaning into that think doing you and sorry private sale and other it curious if Philadelphia, garment there. are that on you you cost many companies and questions guys have here time out. think, you full cleaning any of that equal And past I’m dry ask metrics do example? you wet in have around facility you

David Hayne

a to yes that take stab I’ll someone in. want jump if and Hi at Marni, sure,

we are is involvement of all it building etcetera. have out which the and will it’s cleaning, the expectations facility, leased required wears that to the to owned, building able a be to and a built So, we’ve it garment facility, do facility out not spec. dry will heavy underway around had from estimates full and that costs where wet the laundry number it into have but specking We should and plant we’ll our get a be It a modeling laundry doing that the we plant. operate washing the and in be

have we the get anything We’re invest know, will decision forward. because just think we and want going ours But to what in out this to of made this terms how time. actually about at performance. that under rolls to do see is in of over operating an disclose to in better say, we terms you this get doing way going facility advantage in this to we before we’re going And of this I be

us going will a strategic in about excited business. that side are operate we it’s with laundry we’re So, think the new can familiar laundry how now be learning it strong advantage plant. for people future. are And this in-house we of the We’ve to a see got and but goes, that something

Operator

Capital from question next go comes of from ahead. Markets. Fitzsimons line Your Kate RBC Please

open. Your line is

Kate Fitzsimons

is the in think half, can down store light or that negative order of that first evening. in single-digit And drive expand you to start positive? we’re talk you’re the direct better what marketing, improve given reexamining, of more I on Yes. seen business just Thank could overall we how we’ve you slower maybe just you. commentary. guys seeing or about store traffic Hi, if good in in spend year-to-date? a maybe to the mid the just experience being light just then Or, and still regard? little about Frank stores bit digital your in both was wondering the Should

Frank Conforti

Kate, this Frank. is

to that is now of relates trend, down date quarter it the As stores. right piece the the biggest that’s pulling to retail channel segment

that the our store start impact it seen was weaker where on have than in in now what traffic right out We biggest trend quarterly having quarter is. quarter. is the the first And where

Richard Hayne

was direct about the and we dollars on that If that marketing, We usually bit very of used decreasing. be having the than traffic direct it spend continue by goes probably than they store. our to The of all. marketing substantial for rents back the amount most at or increasing a we by pulling not very want talk still that sufficient We driving channel that rather into channel less, pay store marketing marketing and rents. the performs little see level to we’re drive the well And to.

Our recently we’re us very get to if we rent stores. seen of which up. we’re back then landlords, when landlords and deals, to if to reduction, the more to to and reduction for with point back renewals And more And the us. to go percentage they favorable more go give won’t is more are date and way a close dealing see can landlords and is that to cooperative ready a we’ve be starting see that

Operator

next comes Baird. line from Mark Your Altschwager from go the Please ahead. question of

Your line open. is

Mark Altschwager

I’m been slowdown in Good now. headwinds but mean macro are for Thanks you earlier mentioned question. curious trend diagnose could Europe. as until afternoon. apparent, you the bucking I have taking you my there if the the

what And some investments. So, driven some change think part more I’m there also, forward? international I in business is how then and aggressive by year curious this that moving you’re you planning the think spending of

there any performance the pace Just curious the to changes segment causing near-term? choppier Thanks. if international the in is of investments

Richard Hayne

One we’d the be. causing There the three than less Dick. are and the like it’s that Mark, to pound. is things strong Europe what are guard weak be sales to really them

economic third were the and the political aren’t year. apparel we strong as the prior again And know is second assortments in that as all they The uncertainty our about. is

the about, we guess and I when Europe. one be might issues of think they any might good political your go be as are and guess my Now these when about as resolved, solved to think in down talk each

solved if the So, relationship. dollar-pound this summer it won’t guess be were obviously venture I But a there. would that to affect

what is that under change I in back in dealing rectified slight what’s they as the think that for only will should to it as our going on hope didn’t that, on And school America, Europe are where the to much reflects control. we and improved. thing going is fashion So, being really with they fashion. and think a The And be get maybe is quickly on and worked in we there back we very North was what’s have.

actually is invest time Europe. this Europe, in investments to good a that to in reasonably As we believe

awful cooperative the Just Europe they much like an are lot that’s being saying in North landlords and really because more cooperative. for are America,

planning opening money and we and that are putting same direct into also into fulfillment and we money are the distribution more into there. putting before discussed we basically at are and our are on the over offices pace So, stores capabilities putting we our more business we more money

the to spread of them. will a a are in. you And people to If right our the fair them growth. that more now, to process are offices sort we It’s in out signing packed you see allow and bit of not the were accommodate lease know

Operator

of next question Your line ahead. Ike from Please Boruchow from comes Wells Fargo. go

Your line is open.

Ike Boruchow

Hi, everyone.

a the question at looking two Just big brands. quick

bit weaker regions I of Dick talked Anthro QX in and clearly than wide. the a UO think little So, some about you

margin numbers the for second underperform, again quarter Just putting up. whatever comps is the curious decline negative on gross and we should Anthro expect to the UO

the the quarter? current Just kind of on brands to trying going understand what’s in two between

Richard Hayne

to believe against quarter. lag That to I stack. would Urban Urban said to anticipate second now, continue stack. the being we relates Anthropologie up the about also talk little would a comparison the a I is as it bit toughest bit two-year two-year Right the in

I Urban think level and end the the rate. a XX company at did of north with teen total that we on

had the quarter. So, incredibly you there performance know an in second strong

second look year little bit a So, while Anthropologie quarter they might stack. less worse are than on a two-year than absolute the on number this

are they a more think comparable. I little

Operator

the Please Your Matthew line Boss next go from question comes from JPMorgan. of ahead.

Your line is open.

Matthew Boss

Thanks.

the top-line continue were half And single-digit back front trends do flexibility? low to year? margin negative to into the second relative the opportunity SG&A if gross see you about think best of for Frank further to how half So, half,

Frank Conforti

we’ve margin, what get really to it of know, some quarter second relative important relates clarity you as how think, timeframe would need the some here. markdown See what our gross relative to to transition got So, starts we July us through in expect I giving that we is to that to honestly products to to rates. could

know first little will a the though on you a we year. kind easier, top-line in achieved there defer markdown I’ll know rate, that bit. that and of from half record comment question the the obviously from of the comparisons get do I you setting a So, fact

some business. we Nuuly would year, comp the whereas some that X% and second Dick would we SG&A, driven to we’ve which we Europe on customer store as quarter, facility, move related provide some to that service. constructing anticipate achieve, we being facility leverage quarter as business as in sales if in say obviously payroll, of adjust flexibility our that growth as so being well to to at third as to expenses home be furniture you our last well, some marketing. In of things would our by expectations, better based to well launch team office roughly there. the our that the of achieved quarter, our talked of the early Dick that on you us at growth have. to to now we’ve new supporting transition China relating in relative relating the local, our by some in and points to, a to did sort hundred makes incentive Also, continue would on to new European have SG&A, in some XPL continuing of one for the we us quarter, relating looking the center, we on come X% half are also initiative to the and elevated relates SG&A, basis second of distribution do planned, to so moving saw as you that know speak about support core anticipate at we that on the our the be be market, would owned the a relative obviously it Two as as sense at first we saw few talent add we being look that right new of of as the that than And to continued transition the the distribution it lower As relates expect max and subscription our we’re launch mentioned, which and into SG&A, we’ve expect time lastly, in related anticipate would our incremental plans a then as market well I the for begin to into there’ll where to already is operated capacity. our which as that, as in it over new into begun we as the the perfect well moving touched to growth that fall, past, that

the adjust the would of half down flexibility elevated year because shown number hundred have is, SG&A sales couple through the a points we our anticipate of our back that with where it core to our SG&A will half are. the as we where the in to as know being absolute up on and line basis to I depend trends top first year, by our So, business you are support obviously relates sales our have

Operator

Your next of from Brian from Nagel question comes the Please Oppenheimer. go line ahead.

is line open. Your

Brian Nagel

taking good and you question. Hi, evening my thank for

So, with choppiness in sales or during the current experienced regard quarter. to weakness we the

is, could sales talking your or But that of be the a say question anything have Your there sort that as comments issues internal it defined. issues Is it well you current and I retailers into is the are also seems in company? number has at about been the other the environment competitive adding around it’s there’s weakness. pretty look of this like suggested you’ve brands

Richard Hayne

speak that, Well, her at it’s and that anything in is if I hers’. there customer I imagine wrong with mean, look you the I’ll think hard to

extraordinarily high You pay Consumer is sentiment take as Her up. been. know as strong. her it’s home is is employment

So, I else it productive area be. that’s probably at. look not to could think What a

You look fashion. know you then

the micro silhouette that think And You changing. the that we us things not should as And two a is process at predict have or to there within enthusiastic we’re I didn’t That we question there year that was, degree know some last convinced I this fashion larger customer fashion. summer the in she in this no already that bottom being of hit as brands. one And changed. a we’re still have year. is of was in cycle year, as well said, the and this a quite is shopper micro absolutely that it could has think as always is

just traffic I X improved store traffic decline X steady actually like coming the this she at if boost really the years, at very to was is to tax set its when improved. year last sales tax over in some last and X, you’ll off, and look talk I on that things. head sales last odd sugar what rebates, see did time, high mean you lot a think that actually from cuts and is about a I essentially a the year,

XXXX, before think down out don’t and think much took the really that were that and are you I if a to back see we of of you right then we that to where anomaly change. summer would now expect pretty I I direct it’s one line

business most bit the is about of people, at A last extraordinarily when but I own at, So, is our would look the our coming reality is most, business, is little from little confusion. an bit a off shortfall that strong I say other can’t look appearances I fault. of I year talk probably when fashion just and

Operator

line of FBR. Anderson comes Riley question ahead. from go Please Your from Susan the last B.

Your line is open.

Luke Hatton

is This afternoon. Luke Hatton Susan. Good on for

then the And capital about getting balances. quick, you how I more wondering Just you. for your Thank that to share are was current relates how a outlook repurchases? structure cash your thinking particularly

Frank Conforti

a Hi. bit bought before. and This year Not did is the of share that we million you repurchase if Obviously, sure little little X quarter that’s a last over that about about X.X Frank the shares Conforti saw on repurchases. million year million for talk million. I $XX in X.X top could we the

the whereas perfect have cash we the to perspective to well We’ve in current cash core over initiatives $XXX nine got shares sheet now authorization slightly last remaining spent have subscription brand supporting on a our the base and strength we’re know shareholders. as you million and now flow about XX million that we and quarters. capacities, as as Nuuly XX balance So, over as offices growth-based know return million fully at you well coming and look year on in June where this a to and able as from conversation our still would I further like invest in this we’re a to I example, distribution honestly continue being Xth, up meeting always businesses so. around the from to invest Board anticipate expanded of perspective, topic is home a as be a

forward. think that balance that strong very a strong to have you. from sheet ideal really well not, as an the us think the leverage Thank that as very scenario speak proposition it’s I going And I does a that’s strength for flow. having of we cash

Richard Hayne

We hope much. guess perfect the thank everybody you I see participating to on for place very a call. Thank And that’s months. to X you in

Operator

concludes today’s call. conference This

You disconnect. now may

Urban Outfitters (URBN) 21 May 192020 Q1 Earnings call transcript