Urban Outfitters (NASDAQ: URBN) shares are down over 40% year to date, underperforming the S&P 500's flat trading over the same period.
Investors should be wary of the stock for a few reasons, all of which can be traced backed to fallout from the coronavirus pandemic. Bumpy reopenings are hurting traffic in the retailer's Free People, Anthropologie, and Urban Outfitters stores. Consumers are focusing on more comfort-based clothing and less on fashion due to fewer events to attend and more working from home. Additionally, the continued economic uncertainty is expected to hurt discretionary spending.
Image source: Urban Outfitters