By  on November 8, 2006

In a pre-earnings statement Tuesday, Urban Out­fitters Inc. said third-quarter same-store sales declined 10 percent, due to a difficult performance at Anthropologie and Urban Outfitters stores.

By brand, comps declined 10 percent at Anthropologie and 10 percent at Urban Out­fitters, but increased 9 percent at Free People. In the same period last year, comps showed a 13 percent gain. Total sales in the quarter gained 7 percent.

Richard A. Hayne, chairman and president, said in a statement that the retailer is seeing "a steady increase in the number of our customers who are embracing the new fashion silhouette and believe this trend augurs well for our future sales.

"Even though total comp-store sales improved throughout the quarter, they continue to trail last year's level so our objective is to manage inventory levels tightly and control operating expenses to maintain healthy operating margins,'' Hayne added.

Although comps were below expectations, analysts said there were some notable improvements at both Anthropologie and the namesake stores.

"At Urban the men's business remained relatively strong while the home business improved, but accessories continued to struggle and only limited improvement was seen in women's," said Margaret Whitfield, analyst at Ryan Beck & Co., in a report. "Anthropologie accessories also struggled, with improvement noted during the period in women's despite a difficult bottoms business."

Total sales for the quarter ended Oct. 31 rose to $308.45 million from $288.8 million in the same period last year. The company said the jump was driven by new store growth and an increase in sales from wholesale, catalogues and Web sites.

The company will release third-quarter earnings on Nov. 9.

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