02:53 PM EDT, 08/23/2024 (MT Newswires) -- Urban Outfitters' ( URBN ) sales growth slowdown continued this month, with the deceleration happening across all four brands, UBS said in a note.

The firm said in a Thursday note that increased discount rates might squeeze the company's Q3 gross margin.

"With sales decelerating across all four brands, [management] expects to take markdowns in order to end Q3 in a clean inventory position by the start of Q4," the investment firm said.

The slower-than-expected sales trends have prompted UBS to lower its earnings forecasts for the lifestyle retailer to $0.90 per share from $1.01 for fiscal Q3, and to $0.82 per share from $0.88 for fiscal Q4.

As a result, UBS said it raised its fiscal 2025 EPS forecast by only 10 cents to $3.65, despite the company's fiscal Q2 beat of 26 cents.

UBS reiterated its neutral rating on the company's stock while cutting its price target to $41 from $43.

Shares of the company were up 2.5% in recent trading.

Price: 38.43, Change: +0.92, Percent Change: +2.45