Urban Outfitters shares were up by over 6% in aftermarket trading on Monday on fourth quarter better than expected results. Earnings were 60 cents per share and beat Wall Street’s projections of 57 cents per share and were one penny higher than the same quarter one year ago.
However, the apparel company’s net income was down by 9.5% from the same period last year to end the quarter at $80.3 million because of a higher sales cost and increased administrative, general and sales expenses.
Management said going forward that an exposure in the European and Canadian markets could hurt earnings for fiscal 2016 because of strong headwinds on foreign currency.
Net sales totaled $1,011 million in the quarter, which was 11.6% higher than the same quarter a year ago. This was attributed to a jump of $46 million in sales in non-comparable stores, new openings of stores and a growth in double digits at its wholesale locations. The top line surpassed Wall Street estimates of $1,005 million.
The Free People and Anthropologie brands helped contribute to the performance of the company. Management is aggressively attempting to revive the namesake brand via store refurbishment and promoting more compelling assortments.
Nets sales of brands increased just over 10.1% ending at $438.3 million for Urban Outfitters, 9.1% to $413 million for Anthropologie, and 24.2% to just over $152.5 million for Free People.
Other revenue was up 16.1% to reach $7 million. Net sales for the company were up 11.1% to just over $953.2 million at the retail segment and by 20.5% to just over $57.7 million in the wholesale segment.
Comparable retail sales, including the comparable channel direct to consumer, increased by 6%, while the comparable retail segment net sales were up 18% and 6.1% with Free People and Anthropologie respectively, while it was up by 4% with Urban Outfitters.
Gross profits during the most recent quarter were up 5.3% to end the quarter at $349.5 million, while gross margin shrank to 34.5% due to lower merchandise markups followed by more markdowns.
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