May 21 (Bloomberg) -- Urban Outfitters Inc., the retailer that rehired co-founder Richard Hayne as chief executive officer this year, rose in late trading after reporting first-quarter profit that beat analysts’ estimates on record sales.
The company’s shares rose 4.5 percent to $27.35 at 4:20 p.m. in New York, after the close of regular trading. Net income for the three months ended April 30 fell to $34 million, or 23 cents a share, from $38.6 million, or 23 cents, a year earlier, according to a statement today from the Philadelphia-based company. Analysts had projected 20 cents, the average of 28 estimates compiled by Bloomberg.
Urban is attempting a rebound after profit for the year ended Jan. 31 shrank to a four-year low as the chain boosted discounts to clear inventory. The company has had new management in place since November, with Hayne succeeding former CEO Glen Senk, Under Armour Inc. alum David McCreight joining as CEO of the Anthropologie brand and Ted Marlow returning as head of the namesake Urban Outfitters label.
“We are encouraged by the customer response to the steady progress our brands have made in creative and product execution,” Hayne said in the statement.
Sales rose 8.6 percent to the record $568.9 million, driven by online purchases and revenue from Urban Outfitters and Free People stores. Analysts on average had estimated $578.3 million.
Gross margin, the percentage of sales left after subtracting the cost of goods sold, shrank to 35.6 percent from 36.9 percent a year earlier, as the company opened 14 new stores and had to increase markdowns on “a few women’s apparel categories across all brands,” according to the statement.
Urban Outfitters had lost 5.1 percent this year through the close of regular trading.
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