Urban Outfitters ( URBN) was, for a time, able to remain relatively untouched by the recession -- but it has finally succumbed.

The contemporary apparel chain recorded a 28% drop in second-quarter earnings, as profit fell to $30.8 million, or 18 cents a share, from $42.6 million, or 25 cents, last year. Analysts expected earnings of 17 cents a share.

Sales slipped 2% to $384.8 million from $394.3 million, while totally same-store sales declined 9.6%.

By brand, comparable sales dropped 6% at Urban Outfitters and 13% at Anthropologie and tanked 23% at Free People.

Despite rather soft sales, CEO Glenn Senk said in a statement that the company is "well-positioned to show improvement over the next several quarters."

Analysts seem to agree. Roxanne Meyer, analyst at UBS, said in a note to clients that while the retail environment remains tough and second-quarter comps were weaker for the core Urban Outfitters, channel checks show momentum is building. "We believe current product is stronger now than in the first quarter," she wrote.

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