Net sales at Urban Outfitters and Anthropologie have dropped by 2% to $873m (£679m) in the three months to 30 June, compared with the previous year.
Sales at Urban Outfitters were down 7.9% for the quarter, and dropped by 4% at Anthropologie.
Gross profit for the group also fell 13%, from $343m (£267m) to $297m (£231m).
Its profit decline was driven by “higher markdowns due to underperforming women’s apparel and accessories product at Anthropologie and Urban Outfitters”.
Other factors cited were “deleverage in delivery and logistics expenses primarily due to the penetration of the direct-to-consumer channel[,] and deleverage in initial merchandise mark-ups at the Anthropologie and Urban Outfitters brands due to a change in product mix.”
Retail sales dropped by 3% to $791m (£614m). However, its wholesale arm saw 10% sales growth to $82m (£64m).
Chief executive Richard Hayne said: “While we are disappointed in our second quarter performance, we have a number of initiatives underway including: speed to customer, international growth, wholesale expansion and digital investments. We believe these initiatives, combined with encouraging fashion apparel trends, could lead to improved topline performance in future quarters.”
However, Urban Outfitters group chief executive Trish Donnelly said the European business saw an increase in comparable sales.
According to Donnelly, new customers increased by nearly 30% over the past year.
Women’s apparel was highlighted as the strongest performer for Europe, [driving] top line business” with the “strongest gains across multiple categories”.
She said this was down to a “disciplined and nimble approach” to buying and planning, which has enabled the team in Europe to make product decisions “as quickly as 4 weeks before the in-store delivery”.
The group last month opened three new stores in Vienna, Stockholm and Düsseldorf.