NEW YORK — Driven by robust same-store sales, Urban Outfitters Inc. reported second-quarter earnings that soared 49.2 percent as total revenue gained 32.2 percent.
For the three months ended July 31, the Philadelphia-based company posted net income of $30.6 million, or 36 cents a diluted share, matching analysts’ per-share projections. The quarter’s results compared with a profit of $20.5 million, or 25 cents, in the same period last year.
Net sales rose to $253.4 million from $189.5 million a year ago, while consolidated same-store sales were up 10 percent. By division, same-store sales rose 13 percent at Urban Outfitters stores, 6 percent at Anthropologie and 36 percent at Free People. Total sales were up 34.6 percent at Urban Outfitters stores to $122.3 million and rose 22.8 percent at Anthropologie to $90.6 million. Sales rose 87.7 percent at the company’s wholesale unit, Free People, to $12.2 million and were up 53.9 percent to $28.3 million in the company’s direct-to-consumer unit made up of catalogue and Internet sales.
Gross profits as a percent of sales expanded to 41.4 percent in the quarter from 40.6 percent last year.
“It was easily the best second quarter in the company’s history,” said Richard A. Hayne, chairman and president of Urban Outfitters, in a subsequent conference call with analysts. He said from a revenues standpoint, it was “the company’s best quarter ever, even surpassing last year’s holiday quarter.”
Apparel and accessory categories were the most robust at Urban Outfitters and Free People during the quarter, while sales in the home and accessories categories were strongest at Anthropologie.
Meanwhile, a decreased amount of promotional inventory also benefited the quarter, Hayne said. “Total markdowns as a percent of sales during the quarter dropped by 15 basis points, and the quantity of comp store clearance merchandise on hand at the end of the period in both units and dollars was down significantly at all three brands,” he said.
In the six months, earnings rose 55.3 percent to $58.04 million, or 69 cents a diluted share, which compares with a profit of $37.4 million, or 45 cents, last year. Revenues totaled $484.7 million, an increase of 34.7 percent from the prior year’s $359.8 million.
This story first appeared in the August 12, 2005 issue of WWD. Subscribe Today.
“This momentum, combined with the current positive spending mood of our customers, makes us optimistic about second-half opportunities,” Hayne said in a written statement dated Thursday. Hayne elaborated on the analyst call that sales in the third quarter are already tracking “significantly” ahead of the company’s expectations.
Analysts are expecting earnings per share of 43 cents in the third quarter, which would compare with 31 cents earned last year.
The company plans to open 18 to 20 stores during the rest of fiscal 2006; 12 have been opened this year so far. Glen Senk, president of the Anthropologie brand, added during the call that the brand expects to open its third Manhattan location in the first half of 2006.