Urban Outfitters Inc.’s third-quarter profits topped both its own year-ago performance and analysts’ estimates as strong sales at Anthropologie helped it overcome weakness at the flagship brand.
The Philadelphia-based retailer said for the three months ended Oct. 31, net income rose 5.3 percent to $63.4 million, or 36 cents a diluted share, compared with $59.3 million, or 35 cents a share, in the year-ago quarter. Net sales climbed 5.8 percent to $505.9 million from $478 million in 2008.
Analysts projected earnings per share of 35 cents on revenue of $499.4 million, according to Yahoo Finance.
Retail sales increased 7.1 percent to $475.4 million, with comparable-store sales down 2 percent, while direct sales grew 21 percent to $79.8 million. Wholesale revenues fell 10 percent to $30.5 million.
By concept, Urban Outfitters posted a 2.9 percent decline in revenue to $202.3 million, while Anthropologie, the company’s more contemporary brand, saw sales jump 14.3 percent to $181.6 million. Comps slid 5 percent at the Urban Outfitters division, but rose 3 percent at Anthropologie.
Free People recorded an 8.1 percent increase in revenue to $10.5 million despite a 13 percent drop in same-store sales. Home and garden unit Terrain had a 4.7 percent decline in sales to $1.2 million.
In the nine months, net income contracted 10.5 percent to $142.2 million, or 83 cents a share, as sales rose 1.7 percent to $1.35 billion, versus $1.33 billion.
“The retail landscape has always been dynamic, but the pace of change continues to gain velocity. The customer is changing — there is a new definition of luxury, a new definition of value, a new set of values,” chief executive officer Glen Senk said on a conference call with analysts and investors.
Senk said there is “minimal evidence of price elasticity on compelling product.” He noted that value went beyond price, encompassing “authenticity, scarcity, freshness, compelling differentiated product and a meaningful emotional connection.”
The ceo touted the company’s quarterly gross margin, which improved to 41.5 percent of sales from 40.1 percent. Improvements in initial merchandise margins were partially offset by increased markdowns to clear seasonal inventories. Still, for the period, inventories fell $18 million, or 8 percent, on a year-over-year basis. Selling, general and administrative costs, however, increased $9.3 million to $114.3 million, due partially to deleveraging of fixed store costs.
“Urban is one of the last early-cycle growth stories left in retail. The U.S. store base can more than double, and international growth is in the first inning,” said Jeffries & Co. retail analyst Randal Konik, who added that, “coupled with multiple margin drivers, [company] earnings should significantly outpace peers and Street expectations.”
Shares of the firm ended the day at $32.80, up 53 cents, or 1.6 percent, in Nasdaq trading. They came within 75 cents of their 52-week high in intraday trading.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast