Urban Outfitters posts record quarterly sales; inflation, business costs drag down profits
Urban Outfitters announced on Tuesday net sales for the first quarter increased 13%, on the back of double-digit growth in retail comparable sales, with inflation and operational costs weighing down profits.
The Philadelphia-based company said net sales increased 13.4% to a record $1.05 billion for the quarter ending April 30. Total retail segment net sales increased 12%, with comparable retail segment net sales increasing 11%, partially offset by mid-single-digit negative digital channel sales.
By brand, comparable retail segment sales increased 18% at the Anthropologie Group, 15% at the Free People Group and 1% at Urban Outfitters. Wholesale segment net sales increased 6%, driven by a 9% increase in Free People Group wholesale sales. Meanwhile, Nuuly segment sales increased by $15 million, driven by a significant increase in its subscriber base.
“We are pleased to announce record Q1 sales driven by an 11% retail segment ‘comp’,” said Richard Hayne, chief executive officer.
“Unfortunately, the impact of inflation on our costs of doing business more than offset the benefit of record revenues."
Net income for the three months fell to $32 million and earnings per diluted share dipped to $0.33, compared to $53 million and earnings per diluted share of $0.54 in the prior-year quarter.
During the three months, the company opened a total of five new retail locations including: two Free People Group stores (including one FP Movement store); two Urban Outfitters stores and one Menus & Venues restaurant. The group closed three retail locations including: one Free People Group store, one Urban Outfitters store and one Anthropologie Group store.
It also opened two Urban Outfitters franchisee-owned stores and one Anthropologie Group franchisee-owned store.
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