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Is Urban Outfitters in Trouble?

Known more for faux pas—like a mock blood-spattered Kent State sweatshirt and a T-shirt emblazoned with the words “Eat Less”—than cutting-edge fashion, Urban Outfitters has stepped up its sartorial offering recently with a retro Fila collaboration, the ubiquitous Stan Smith sneaker from Adidas and a selection of styles by contemporary designer Samantha Pleet.

But carrying a couple of $300-plus pieces can’t change the fact that the hipster haven’s prices have, for the most part, stayed flat.

According to a note Wunderlich Securities analyst Eric Beder sent to clients, the average price at Urban Outfitters was unchanged in the third quarter as the retailer resorted to selling merchandise on sale and clearance rather than full price in an effort to compete with American Eagle and Hollister.

Last week, a Buzzfeed article brought attention to the fact that the retailer had removed the social media accounts and standalone e-commerce of its Without Walls athleisure brand and quietly integrated it into the activewear category on its main site.

“We are increasingly worried that Urban Outfitters is losing momentum to its other teen competitors,” Beder wrote in the note, quoted by Business Insider, explaining why his firm on Monday downgraded the Philadelphia-based company’s stock from “buy” to “hold,” indicating a risky investment.

As he pointed out, American Eagle and Hollister are “catching up to Urban in terms of looks and surpassing them in the key athleisure trend.”

Urban Outfitters’ stock is down nearly 20 percent year-to-date.

It’s not just the company’s namesake brand that’s suffering: both Anthropologie and Free People have been hindered by unseasonably warm fall weather, resulting in slow sales of sweaters and outerwear.

Urban Outfitters third-quarter earnings conference call is scheduled for November 16.

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