Urban Outfitters Inc. declined the most in almost 20 months after the teen-clothing retailer said third-quarter comparable-store sales have been rising at a “mid-single-digit” rate.
The shares slid 10 percent to $38.35 at the close in New York, their biggest drop since January 2012. The decline was the largest today in the Standard & Poor’s 500 Index. The stock has fallen 2.6 percent this year, as the S&P 500 has gained 18 percent.
The operator of Urban Outfitters, Anthropologie and Free People stores made the comment yesterday in a U.S. regulatory filing. Janney Montgomery Scott LLC last week estimated that the Philadelphia-based retailer would report that the sales were running at a “high-single digit” rate.
The company’s namesake division has seen weakness this month and in August, Adrienne Tennant, a Janney Montgomery analyst, said today in a note. Urban Outfitters offered an additional 30 percent off all clearance items during Labor Day weekend, which didn’t occur last year, said Tennant, who has a buy rating on the shares.
“We continue to believe the teen sector remains challenged due to fierce competition to capture market share and highly promotional environment,” she wrote.