By  on August 9, 2006

NEW YORK — Urban Outfitters Inc., citing "missed fashion opportunities," reported on Tuesday that overall same-store sales for the second quarter dropped 7 percent, including declines at its Anthropologie and Urban Outfitters chains. Sales increased at the wholesale and retail group Free People.

For the second quarter ended July 31, comps fell 2 percent at Anthropologie and 11 percent at Urban Outfitters, and rose 8 percent at Free People.

Despite the lower sales in stores open at least one year, total sales for the quarter rose 13 percent to $285.6 million from $253.4 million in the same year-ago period.

"We were pleased with the results produced this quarter by our Free People wholesale and retail groups and the Urban European stores, all of which delivered sales significantly above our plans," Richard A. Hayne, chairman and president of the lifestyle consumer products company, said in a statement. "However, store sales at our two large retail brands were below plan due to missed fashion opportunities."

Reacting to the declines, Hayne said the company will develop a clearer understanding of the fashion trends to which customers are responding and adjust merchandise.

Weak areas included the Urban Renewal business, with double-digit declines, and Urban Women&'s. At Anthropologie, the home business continued on a negative slope, according to a research note by analysts at Ryan Beck, the investment banking firm.

Gains of 11 percent were reported in direct-to-consumer sales and 64 percent jump at Free People wholesale.

During the second quarter, the company opened three new Urban Outfitters stores, two Anthropologie units and one Free People store. This brings the total of new store openings for the first six months of the fiscal year to 13. The company plans to launch 35 to 38 new stores this year, including three to five Free People stores.

The firm will report second-quarter earnings on Thursday.

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