Urban Outfitters Inc. (NASDAQ:URBN) Q2 2020 Earnings Conference Call - Final Transcript

Aug 20, 2019 • 05:00 pm ET


Urban Outfitters Inc. (NASDAQ:URBN) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Urban Outfitters Inc. Second Quarter Fiscal 2020 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce Oona McCullough, Director of Investor Relations. Ms. McCullough, you may begin.

Oona McCullough

Good afternoon, and welcome to the URBN second quarter fiscal 2020 conference call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the three and six-month periods ending July 31, 2019. The following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the company's filings with the Securities and Exchange Commission.

On today's call, you will hear from Trish Donnelly, Global CEO, Urban Outfitters Group, Frank Conforti, Chief Financial Officer, URBN, and Richard Hayne, Chief Executive Officer, URBN. Following that, we'll be pleased to address your questions. For a more detailed commentary on our quarterly performance and the text of today's conference call, please refer to our Investor Relations website at www.urbn.com.

I will now turn the call over to Trish.

Trish Donnelly

Thank you, Oona, and good afternoon, everyone. I will spend the next few minutes discussing the second quarter, what we are seeing in the business currently and then give updates to some of our longer-term growth initiatives. First off, results for the second quarter were disappointing. The Urban Outfitters brand delivered a negative 5% retail segment sales comps, driven by underperformance in women's apparel. Although we faced best ever prior-year comparisons, we did have product and execution misses.

As discussed on our last call, we knew our women's assortment was not well-balanced and we were over assorted with too much of the same idea. The Urban Outfitters brand is at its best globally when we cater to a variety of sensibilities and customer types within our women's offering, and our execution was not where we wanted it to be.

Despite the miss, we did have products and category successes, which give us optimism for the back half of the year. Where we had nice balance in the assortment and offered compelling products supported by strong marketing messages, our customers responded enthusiastically. Within women's, we had strong response to our tops and bottoms businesses globally and we see this continuing into the current quarter. Within men's, tops drove particularly strong global sales, which also continued into the current quarter. And finally, we are very excited by the growth we are seeing in home decorate, tech and media, and the beauty categories. These particular categories become more important from a volume standpoint in the back half of the year and we are well positioned from a product, inventory and marketing standpoint to see their continued success.

Now, moving on to current business. August-to-date, we're seeing improvement in our women's business in North America and particular strength in Europe. New fashion ideas and new silhouettes