Shares of Urban Outfitters (URBN) - Get Report   rose 6.6% to $22.25 Wednesday after the apparel retailer beat Wall Street's second-quarter earnings expectations but missed sales forecasts.

The Philadelphia-based company reported earnings of $60 million, or 61 cents a share, compared with $93 million, or 84 cents a share, a year ago. Sales totaled $962 million, down 3% from a year ago.

Analysts were calling for earnings of 59 cents a share on sales of $982 million. Comparable-store sales fell 3%, the company said, driven by negative retail store sales, but partially offset by growth in the digital channel. Wall Street was expecting comparable-store sales to decline 2%.

By brand, comparable retail segment net sales increased 6% at Free People and decreased 3% at the Anthropologie Group and 5% at Urban Outfitters. Wholesale segment net sales decreased 8%.

As of July 31, total inventory increased by $64.4 million, or 17.2% year over year. Comparable retail segment inventory increased 5% at cost. The remainder of the increase was primarily related to an increase in inventory in transit.

"I am pleased to report that customer reaction to our early fall apparel assortments have improved significantly from our second quarter results," CEO Richard A. Hayne said in a statement. "Third quarter-to-date 'comp' sales are positive at all three brands."

The stock's price target was cut to $20 from $26 at Wedbush.

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