NEW YORK (
(URBN - Get Report)
, owner of Anthropologie, Free People and its name brand, fell in after-hours trading as sales growth fell short of analyst expectations.
Shares were falling 3.1% in after market trading after closing Monday at $44.49 per share.
The Philadelphia-based specialty retailer said revenue rose 14% for the three months ended April 30 to a record $648.1 million, less than an average forecast of $655.1 million, according to according to
Finance. Profit jumped 39% to $47 million compared to the same period a year ago while earnings per share adjusted for some items totaled 32 cents for the quarter, beating the forecast of 29 cents per share.
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Comparable retail net sales, which include the company's comparable direct-to-consumer channel, rose 9%, fueled by a 44% comparable sales at Free People and a 16% jump in its wholesale segment. Retail comparable sales rose 8% at Anthropologie and 6% at its flagship Urban Outfitters stores.
"Our brands delivered solid growth across all channels in the first quarter, especially in our direct-to-consumer channel," CEO Richard Hayne said in the earnings release. "Our focus on the direct-to-consumer channel has paid off nicely and we plan to continue to make the investments necessary to support its robust growth."
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Urban Outfitters said the quarter's gross profit rate improved by 125 basis points over the year-earlier quarter, primarily due to "a reduction in merchandise markdowns primarily driven by improvements at the Anthropologie brand."
The company also said it improved merchandise margins and store occupancy expenses, "partially offset by a deleveraging of delivery expense primarily related to an increase in direct-to-consumer net sales penetration."
As of April 30, total inventories rose by 9% or $26 million. Comparable retail inventories rose 1% to fuel its direct-to-consumer growth rate.
At quarter end, Urban Outfitters had: 216 Urban Outfitters stores; 182 Anthropologie stores; 80 Free People stores and the Free People wholesale channel, which sells to approximately 1,400 specialty stores and select department stores. The company opened a total of seven new stores in the quarter and closed one Urban Outfitters store.
-- Written by Laurie Kulikowski in New York.
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