Urban Outfitters Inc. saw a double-digit percent increase in both third-quarter net income and sales.
This story first appeared in the November 19, 2013 issue of WWD. Subscribe Today.
For the three months ended Oct. 31, net income rose 18 percent to $70.3 million, or 47 cents a diluted share, from $59.5 million, or 40 cents, a year ago. Net sales were up 11.7 percent to $774 million from $692.9 million, which includes a 20.5 percent gain in wholesale net sales to $50 million. By retail segment, sales at Urban Outfitters rose 3 percent to $341.9 million, Anthropologie was up 16.2 percent to $310.1 million and Free People gained 29.1 percent to $113 million. The company said comparable-store sales, which include direct-to-consumer, rose 7 percent. By business segment, comps rose 30 percent at Free People and were up 13 percent at Anthropologie, but down 1 percent at Urban Outfitters.
For the nine months, net income was up 25.1 percent to $193.7 million, or $1.30 a diluted share, on a 12.5 percent sales gain to $2.18 billion.
Richard A. Hayne, chief executive officer, said that despite the solid performance in the quarter, fueled by strong results at the Anthropologie and Free People brands, the company remains “cautious about the fourth quarter given the likelihood of a highly promotional environment and this year’s challenging holiday calendar.”
Gross profit rate in the quarter improved by 11 basis points, helped in part by a reduction in markdowns and better initial merchandise margins at Anthropologie and Free People, offset by an increase in merchandise markdowns at the Urban brand in North America.
The company opened nine stores in the quarter, bringing the global store count to 500.