(By Balaseshan) Specialty retailer Urban Outfitters Inc. (NASDAQ:URBN) reported a 8.1% increase in quarterly earnings on strong comparable store sales and higher revenue. Results exceeded Street's expectations, sending its shares up 12.53% in aftermarket.
Earnings for the second quarter were $61.29 million or $0.42 per share, up from $56.69 million or $0.35 per share last year.
Sales increased 11% to $676.27 million. Comparable retail segment net sales, which include comparable direct-to-consumer channel, increased 4% for the quarter, while comparable store net sales decreased 1%.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.33 per share on revenue of $671.58 million.
Comparable retail segment net sales at Free People and Urban Outfitters increased 12%, and 6%, respectively, while comparable retail segment net sales at Anthropologie were flat for the quarter. Direct-to-Consumer net sales increased 22% and wholesale segment net sales rose 17% for the quarter.
Sales from Urban Outfitters brand grew 14.1% to $310.66 million, while Anthropologie sales rose 3.3% to $281.81 million. Free People sales jumped 25.7% to $73.79 million, while other sales climbed 76.8% to $10.01 million.
Gross margin declined 30 basis points to $37.6%, primarily due to the deleveraging of initial merchandise costs and store occupancy costs both of which were partially offset by a reduction in merchandise markdowns.
As of July 31, 2012, total inventories increased by $20 million or 7%, primarily due to the acquisition of inventory to stock new and non-comparable stores and inventory related to the growth in our direct-to-consumer channel, partially offset by a 5% decrease in comparable store inventories.
URBN closed Monday's regular session down 0.38% at $31.28. The stock has been trading between $21.47 and $31.81 for the past 52 weeks.