Specialty retailer Urban Outfitters (URBN) Monday said its earnings increased sharply in the third quarter, helped by broad-based comparable sales growth. The results topped estimates, sending the company’s stock higher in the after-hours trading.
Net sales grew 9% annually to $973.5 million during the three-month period and came in above analysts’ forecast. All the three main business segments registered growth, with retail and wholesale sales gaining 9% and 12% respectively compared to the third quarter of 2018.
Retail comparable sales rose 8%, aided by a double-digit growth in the digital channel. Comparable sales of the Free People and Anthropologie brands grew 12% and 8% respectively. Same-store sales of the Urban Outfitters brand moved up 7%.
Earnings of the Pennsylvania-based firm advanced to $77.5 million or $0.70 per share in the October quarter from $45.1 million or $0.41 per share last year, exceeding the forecast. The bottom line was boosted by an uptick in gross profit, driven by lower markdowns at all three brands and leverage in store occupancy cost.
All the three main business segments witnessed growth, with retail and wholesale sales gaining 9% and 12% respectively
“I’m pleased to announce our teams produced record Q3 sales and earnings. All brands, all channels, all product categories and all geographies delivered positive ‘comp’ sales,” said CEO Richard Hayne.
During the year-to-date period, Urban Outfitters repurchased 1.5 million shares for about $58 million. It also opened 14 new outlets during the period, including four Anthropologie stores, four Urban Outfitters stores, three Free People stores and three Food and Beverage restaurants.
The consistency with which Urban Outfitters beat the Wall Street forecast in recent quarters signals a strong holiday season for the company. The performance will be bolstered by positive market sentiment and income growth. Going forward, growth is expected to gather further steam from the ongoing efforts to drive more traffic to the online platform.
Urban Outfitters shares gained about 3% since the beginning of the year. The stock closed Monday’s regular trading session lower but gained sharply in the after hours.