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Driven by higher same-store and net sales and reductions in markdowns, Urban Outfitters Inc. reported a 78.8 percent jump in second-quarter profits Thursday, beating Wall Street estimates.
This story first appeared in the August 15, 2008 issue of WWD. Subscribe Today.
For the quarter ended July 31, the Philadelphia-based company posted net income of $57 million, or 33 cents a diluted share, compared with $31.9 million, or 19 cents, in the year-ago period.
Revenues were up 30.4 percent to $454.3 million, versus $348.4 million for the prior-year quarter. Same-store sales rose 13 percent, led by a 19 percent increase at the Urban Outfitters division. Free People and Anthropologie were up 10 percent and 7 percent, respectively.
Analysts polled by Yahoo Finance expected earnings per share of 30 cents a share on sales of $450.5 million.
“All of our brands and channels produced exceptional results during the period. The company executed superbly throughout the quarter, and we believe we are appropriately positioned for the second half of the year,” chief executive officer Glen Senk said. “If it sounds like I’m bursting with pride, you are correct.”
Quarterly gross profit margins increased 373 basis points to 41.1 percent of sales, aided by improvements in initial merchandise cost, fewer markdowns and leverage of store occupancy costs. Inventory grew by $25.6 million, or 14 percent year-over-year, driven by the acquisition of inventory to stock new retail stores.
Net income for six months increased 30.4 percent to $99.5 million, or 58 cents a diluted share, compared with net income of $61.2 million, or 36 cents, for the same period last year. Net sales were up 28 percent to $848.6 million, versus $663 million for the year-ago period.
Urban Outfitters operates 115 Anthropologie stores, 21 Free People stores, 132 Urban Outfitters stores and one Terrain garden center.