Philadelphia-based Urban Outfitters reported higher sales and profit in the second quarter, but expects a stronger impact from tariffs than previously projected, writes Katherine Hamilton for The Wall Street Journal.
According to Chief Operating Officer Frank Conforti, the apparel and home goods retailer now expects tariffs to reduce gross margins by 75 basis points in the last six months of the year. In May, Urban Outfitters had expected that tariffs would only reduce margins by 20 basis points in the second half of the year.
The projections rely on rates as of Wednesday, including the 50 percent tariff on goods imported from India. Urban Outfitters will respond by negotiating with vendors, changing the country of origin when possible, adjusting shipping modes, and increasing prices.
“We’re looking to protect opening price points and only targeting areas where we believe we can gently raise some prices without significantly affecting the overall customer experience,” said Conforti.
In the quarter ended on July 31, Urban Outfitters reported a profit of $143.9 million, or $1.58 per share. That is a significant increase compared to $117.5 million, or $1.24 a share, in the previous year.
Read more about Urban Outfitters’ second quarter and its weary outlook for the remainder of the year in The Wall Street Journal.
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