Urban Outfitters Gains After Profit Tops Estimates
Urban Outfitters Inc. (URBN) surged in late trading after posting second-quarter profit that topped analysts’ estimates as sales gained at all of its main brands.
The shares climbed 17 percent to $36.45 at 5:53 p.m. in New York. The Philadelphia-based retailer had gained 13 percent this year through the close of regular trading today.
Urban Outfitters rehired co-founder Richard Hayne as chief executive officer in January to turn the chain around after increased discounts caused profit to shrink to a four-year low in its last fiscal year. The company also appointed new heads of its namesake and Anthropologie brands as it works to improve merchandise and generate a majority of its sales online.
The brands built on successful merchandise introduced earlier this year, including “colored denim, other bottoms and dresses, and executed in these categories with excellent results,” Hayne said on a conference call with analysts after the report. Direct-to-consumer sales also drove profit, with an about 30 percent increase in traffic from last year on the company’s web and mobile sites, he said.
Net income rose 8.1 percent to $61.3 million, or 42 cents a share, from $56.7 million, or 35 cents, a year earlier, the company said in a statement today. Analysts’ average estimate was 33 cents a share, according to data compiled by Bloomberg.
Second-quarter net sales climbed 11 percent to $676.3 million, driven by the namesake, Anthropologie and Free People brands, the company said. Analysts were projecting revenue of $672.6 million. Direct-to-consumer sales rose 22 percent to $137.7 million in the quarter, according to the statement.
Urban Outfitters increased its web-exclusive offerings by 75 percent from last year, which helped boost sales, Hayne said on today’s call. The company increased dress styles available online by 50 percent this year from 750 across all its brands last year, Hayne said.
The namesake brand accounted for 46 percent of net sales in the quarter with $310.7 million, a 14 percent gain from a year earlier. Sales at Free People, the smallest of the three brands, jumped 26 percent to $73.8 million, while those at Anthropologie increased 3.4 percent to $281.8 million.
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