Shares of fashion retailer Urban Outfitters took an abrupt downturn Wednesday despite reporting earnings that beat analyst estimates. The company warned during its earnings call that tariffs would lower future margins and could lead to price increases for customers.

Shares fell 4.5% in after hours trading to $74.50. Through Wednesday’s close, they had risen 42% this year and 113% over the past 52 weeks.

The company reported net sales of $1.50 billion, up 11% from the same period last year. Earnings were $1.58 a share, up from $1.24 last year.

Urban Outfitters estimates that sales will grow in the high single digits for the current quarter ending in October, with the fastest growth in its $98 monthly clothing subscription service Nuuly. Its more established brands Anthropologie, Free People, and Urban Outfitters should have same-store sales growth in the mid-single digits. Gross margins are expected to be flat compared with last year.

Worries over the impact of tariffs on margins are likely to blame for the stock drop. Urban Outfitters imports most of its clothes from India, Vietnam, and Turkey, with less than 5% from China. The U.S. just imposed 50% tariffs on imports from India. When it reported earnings last quarter, it estimated that tariffs would be around 10% globally and 30% for China.

Now tariff rates are much higher: In addition to the rate on India imports, goods from Vietnam are tariffed at 20%, while those from Turkey face 15% levies. Goods from China are still tariffed at 30% for now.

“The landscape continues to change as tariff rates have increased for many countries. As of today and based on new assumptions, we believe the impact for the second half of the year could be approximately 75 basis points to gross margins,” Urban Outfitters co-President Frank Conforti said.

He added that the company is focused on “mitigation strategies” such as negotiating better with its vendors, shifting countries of origin, and shipping over the ocean instead of by air. However, he added that the company would be “gently raising prices.”