Shares of apparel retailer Urban Outfitters fell more than 3 percent Tuesday after the stock was downgraded and hit with a lower price target after the company issued a negative sales update.
The company said in a Monday Securities and Exchange Commission filing: "Thus far during the first quarter of fiscal 2018, comparable Retail segment net sales are mid single-digit negative."
Urban's "weak store traffic has taken a further step down," Citi Research's Paul Lejuez wrote in a Tuesday note to investors, following the release of Urban's 10-K filing. With same-store sales coming in weaker than expected lately, and with the economy slowing overall, "it's hard to see how trends will improve [for the brand] near term," he added.
Lejuez downgraded Urban's stock to neutral from a buy
Urban already has a small store base with predominantly good locations, Citi told its clients in Tuesday's note. "Though higher quality real state plays a part in higher productivity," there is still room for the stock to fall, Lejuez said.
The first Urban Outfitters store opened in 1970, Free People's wholesale division was established in 1984, and the first Anthropologie store opened in 1992. Urban went public in 1993.
Shares of Urban Outfitters closed Monday at $23.20. As of Monday's close, shares are down more than 30 percent over the past 12 months and are down nearly 19 percent year-to-date.