PHILADELPHIA (dpa-AFX) - Lifestyle specialty retailer Urban Outfitters Inc (URBN), Monday reported a lower second-quarter profit, hurt by weak margins that offset growth in sales. However, earnings for the quarter were in line with Wall Street estimates, while revenue surpassed expectations.
Urban Outfitters shares dropped a near 4 percent in after-hours trade on the Nasdaq.
Urban Outfitters operates stores under its namesake brand as well as, Anthropologie, Free People, Terrain, and BHLDN brands. It sells products such as apparel, footwear, gifts and apartment wares.
The quarter saw lower sales at Urban Outfitters brand and gross margin continued to be under pressure. Fashion retailers overall have been striving to buoy growth and fend off intense competition, which means some cutting back on margins to attract customers.
Urban Outfitters, based in Philadelphia, Pennsylvania, posted quarterly net earnings of $67.5 million or $0.49 per share, compared with $76.4 million or $0.51 per share last year.
On average, 35 analysts polled by Thomson Reuters expected the company to earn $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter climbed 7 percent to $811 million from $758 million a year ago. Thirty-three analysts had a consensus sales estimate of $807 million for the quarter.
Comparable Retail segment sales were flat for the quarter. Sales on this basis rose 21 percent at Free People and 6 percent at Anthropologie, while Urban Outfitters fell 10 percent.
Wholesales sales jumped 36 percent.
Results were hurt by gross margin that fell to 37.4 percent from 39.3 percent last year, hurt by under performance at Urban Outfitters and store occupancy deleverage.
Selling and general expenses for the quarter increased by $19 million, due to marketing and technology expenses.
Urban Outfitters stock closed Monday at $36.91, up $0.86 or 2.39%, on a volume of 3 million shares. In after hours, the stock dropped $0.82 or 2.22%, trading at $36.10.
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