Aug 19, 2016
Urban Outfitters reports surprise rise in comparable sales
Aug 19, 2016
Apparel retailer Urban Outfitters Inc reported a surprise rise in quarterly comparable sales, driven by higher demand for its namesake brand.
Shares of the company, which also posted better-than-expected quarterly sales and profit, rose nearly 10 percent in after-hours trading on Tuesday.
Urban Outfitters' comparable sales rose 1 percent in the second quarter ended July 31. Analysts on average had expected comparable sales to fall 1.2 percent, according to research firm Consensus Metrix.
The Philadelphia-based retailer said comparable sales at the Urban Outfitters line, the company's second-biggest brand by sales, rose 5 percent, handily beating the 1.10 percent analysts on average had expected.
Urban Outfitters is attempting to draw back shoppers - who have shifted to online shopping and fast-fashion brands such as H&M, Inditex's Zara and Forever 21 - by adding bars, restaurants and hair salons to its stores.
"A focus on growth categories like the sporting and athleisure aesthetic, which UO has tapped into with its own active line and with brands like Adidas, have also afforded it some traction with consumers," Carter Harrison, analyst at research firm Conlumino, said.
The company's gross profit rate increased in the quarter, primarily driven by fewer promotions at the Urban Outfitters and Anthropologie brands.
The company's net income rose to $76.9 million, or 66 cents per share, from $66.8 million, or 52 cents per share, a year earlier.
Net sales at the company rose 2.7 percent to $890.6 million.
Analysts on average had expected earnings of 56 cents per share and revenue of $886.4 million, according to Thomson Reuters I/B/E/S.
The company's shares closed unchanged at $31.24 on Tuesday. The stock had gained more than a third of its value this year.
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