URBN - Urban Outfitters rallies after comparable sales margin lines impress

2023-05-23 16:20:26 ET

Urban Outfitters ( NASDAQ: URBN ) jumped in postmarket trading on Tuesday after the mall retailer posted Q1 revenue and EPS comfortably ahead of expectations.

The retailer disclosed sales growth of 5.9% for the quarter to a record tally of $1.11B. Total retail segment net sales rose 5% to top the consensus expectation for a gain of 2.4%. The increase in retail segment comparable sales was driven by high single-digit positive growth in digital channel sales and low single-digit positive growth in retail store sales.

By brand, comparable retail segment net sales were up 17% at the Free People Group, rose 13% for the Anthropologie business, and decreased 13% at Urban Outfitters. Wholesale segment net sales decreased 11%, driven by a 14% decrease in Free People Group wholesale sales due to a decrease in sales to department stores and specialty customers.

Gross profit dollars increased 14.8% to $371.2M during the quarter. The increase in gross profit rate for URBN was primarily due to higher initial merchandise markups at all three brands primarily driven by lower inbound transportation costs. In addition, the gross profit rate benefited from lower merchandise markdowns at the Anthropologie Group and Free People Group brands.

Net income for Urban Outfitters ( URBN ) was $52.8M vs. $31.5M a year ago.

Urban Outfitters ( URBN ) reported a 6.3% drop in its inventory position for the end of the quarter. Total retail segment inventory decreased by 5% primarily due to better inventory control supported by a more reliable supply chain. Wholesale segment inventory decreased by 23% in line with the reduction in wholesale sales.

Shares of Urban Outfitters ( URBN ) jumped 8.30% in the late session after dipping 1.41% during the regular session.

More on Urban Outfitters:

• Urban Outfitters: Operational Outperformance To Drive Growth
• Relative strength index and momentum marks on Urban Outfitters
• Growth metrics on Urban Outfitters
• Seeking Alpha's Quant Rating for Urban Outfitters

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