NEW YORK — Double-digit gains in both net and comparable-store sales boosted Urban Outfitters Inc.’s bottom line by more than half in the third quarter.
For the three months ended Oct. 31, the Philadelphia-based specialty retail chain posted a 62.9 percent advance in net earnings to $8 million, or 40 cents a diluted share. That compares with last year when the company logged profits of $4.9 million, or 28 cents. Earnings per share beat the Wall Street estimate by 1 cent.
Sales for the period rose 18.6 percent to $110.1 million from $92.9 million last year, as comparable-store sales jumped 10.4 percent.
Explaining the robust revenue advances on a conference call, chairman Richard Hayne commented: "First, the average unit retail price rose by 8 percent. This increase was due to a slight shift in the sales mix in merchandise classification and the elimination of the least expensive items from the overall inventories. Also driving comp-store sales was a 5 percent increase in the number of transactions."
By business segment, the company’s Anthropologie nameplate recorded a 15.1 percent increase in same-store sales, while Urban Outfitters’ comps improved 7.7 percent. Also adding to the revenue tally was a 33.9 percent increase in direct-to-consumer sales as a result of circulation growth of the Anthropologie catalog and the continued strength of urbn.com sales.
Greater efficiencies also accrued to the bottom line as selling, general and administrative costs as a percentage of sales declined by approximately 95 basis points. Higher initial markups, generated by improved worldwide sourcing, and the greater proportion of private label sales at Anthropologie helped lift gross profit margins 190 basis points.
The company has opened five new stores so far this year — one Urban Outfitters and four Anthropologie units — and has plans to launch approximately eight additional stores during the remainder of fiscal 2003.
Overall, for the first nine months of the year, Urban Outfitters said earnings more than doubled, growing 106.1 percent to $19 million, or 99 cents a diluted share. That compares with last year’s net income of $9.2 million, or 53 cents. Sales for the period increased 24.5 percent to $305.2 million from $245.1 million a year ago.
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