Net sales of Urban Outfitters (NASDAQ: URBN) declined in the second quarter of 2020 and missed the Street’s expectations, hurt by lower comparable-store sales. Consequently, earnings dropped but came in above the forecast. The company’s stock gained about 5% during Tuesday’s extended trading session, immediately after the announcement.
At $962 million, net sales were lower by 3% from the year-ago period and below the consensus estimate. Comparable retail segment net sales declined 3%, hurt by negative retail store sales, which was partially offset by an increase in the digital channel.
Brand-wise, comparable retail segment sales at Free People rose 6%, while sales decreased 3% at the Anthropologie Group and 5% at Urban Outfitters. Wholesale segment net sales were down 8%.
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Net income dropped to $60 million or $0.61 per share from $92.8 million or $0.84 per share in the second quarter of 2019. The bottom line, however, came in above the estimates.
Richard Hayne, chairman of the company, said, “I am pleased to report that customer reaction to our early fall apparel assortments have improved significantly from our second-quarter results. Third quarter-to-date ‘comp’ sales are positive at all three brands.”
The retail segment of the Pennsylvania-based apparel maker, which owns popular brands like Anthropologie and Free People, accounted for about 91% of the total sales in the second quarter. Considering the strong user growth for its digital channel and favorable exchange rates, the company continues to invest in the online platform.
During the six months ended July, the management repurchased and retired around 8.1 million common shares for about $217 million.
Related: Urban Outfitters Q1 2019 Earnings Call Transcript
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Shares of Urban Outfitters lost consistently in the past twelve months and traded at a two-year low in mid-August. They dropped around 37% since the beginning of the year. The stock closed Tuesday’s regular trading session slightly higher.