Urban Outfitters Profit Tops Estimate

(RTTNews) - Apparel and accessories retailer Urban Outfitters, Inc. (URBN) said Monday after the markets closed that its fourth quarter profit fell 9.5% from last year, as higher costs and expenses more than offset a 12% increase in sales.

However, the company's quarterly earnings per share rose from last year due to lower share count, and came in above analysts' expectations.

"We are pleased to report our first billion dollar quarter, fueled by positive retail segment 'comps' at all of our brands, "said Richard Hayne, Chief Executive Officer of Urban Outfitters. "It is encouraging to see this sales trend continue into Q1."

Urban Outfitters shares are currently gaining 3.01% in after hours trading after closing the day's regular trading session at $39.51, up 62 cents or 1.59%. The shares trade in a 52-week range of $27.89 to $40.67.

The company operates 238 Urban Outfitters stores, 204 Anthropologie stores, 102 Free People stores and 2 Terrain garden centers. The company's competitors include Abercrombie & Fitch Co. (ANF) and Gap, Inc. (GPS).

For the fourth quarter ended January 31, 2015, the Philadelphia, Pennsylvania-based company reported net income of $80.3 million or $0.60 per share, compared to $88.7 million or $0.59 per share for the year-ago quarter.

On average, 34 analysts polled by Thomson Reuters expected the company to earn $0.58 per share for the fourth quarter.

Gross margin for the fourth quarter shrank to 34.6% from 36.7% a year ago, mainly due to lower initial merchandise markups followed by higher markdowns, which were mainly driven by the underperformance at the Urban Outfitters brand.

Operating margin for the quarter narrowed to 12.3% from 14.3% last year.

Net sales for the fourth quarter rose 12% to a record $1.01 billion from $905.86 million in the same quarter last year. Thirty-two analysts had a consensus revenue estimate of $1.01 billion for the fourth quarter.

Comparable retail segment net sales, which include the company's comparable direct-to-consumer channel, increased 6% in the fourth quarter. Comparable retail segment net sales increased 18% at Free People, 6% at the Anthropologie Group and 4% at Urban Outfitters. Wholesale segment net sales rose 21%.