PHILADELPHIA (dpa-AFX) - Specialty apparel retailer Urban Outfitters Inc. (URBN), Monday reported a higher third-quarter profit on strong sales growth at its namesake and Anthropologie brands. However, the company's quarterly earnings missed analysts estimates by a penny, while sales came in above expectations.
Urban Outfitters operated under its eponymous brand as well as those like Anthropologie, BHLDN, Free People, and Terrain. During the quarter, the company's net sales grew 14 percent year-over-year.
Comparable retail segment net sales, which includes direct-to-consumer channel, rose 8 percent from a year ago, while same-store net sales edged down 1 percent. Comparable retail segment net sales at Free People, Urban Outfitters and Anthropologie rose by 24 percent, 7 percent and 6 percent, respectively.
'Favorable customer response to our product offerings and better marketing resulted in record third quarter sales and significant margin improvement,' said CEO Richard Hayne.
'We see this trend continuing into the fourth quarter which bodes well for our Holiday season,' added Hayne.
Philadelphia, Pennsylvania-based Urban Outfitters reported third-quarter net income of $60 million or $0.40 per share, compared with $51 million or $0.33 per share last year.
On average, 31 analysts polled by Thomson Reuters expected earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter totaled $693 million, compared with $610 million last year. Twenty-eight analysts had a consensus revenue estimate of $692.38 million for the quarter.
The gross profit rate for the quarter improved by 222 basis points from last year, on a reduction in merchandise markdowns, while selling and other costs increased 75 basis points.
Among others in the industry, fashion retail giant Gap Inc. (GPS) last week reported a 60 percent rise in quarterly profit, helped by higher sales and improved gross margin. The company again raised its full year earnings outlook.
Smaller rival Abercrombie & Fitch Co. (ANF) also had reported a surge in quarterly profit and raised its outlook for the full year.
URBN closed Monday at $37.07, up 5.76%, on a volume of 5.2 million shares on the Nasdaq. In after hours, the stock lost $0.77 or 2.08%. In the past year, the stock trended in a range of $23.42 - $40.65.
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