Driven by wholesale segment sales, revenue at NASDAQ listed, Urban Outfitters, a lifestyle apparel retailer, rose 5 per cent from a year ago quarter for the third quarter of fiscal 2015.
Urban Outfitters said its net sales for the third quarter of fiscal 2015, grew to a record $814 million or 5 per cent over the same quarter last year.
Wholesale segment net sales rose 26 percent year-on-year, while comparable retail segment net sales, which include its comparable direct-to-consumer channel, however, fell 1 per cent.
Comparable retail segment net sales increased 15 per cent at Free People brand and 2 per cent at Anthropologie brand and declined 7 per cent at Urban Outfitters brand.
The retailer reported net income of $47 million and earnings per diluted share of $0.35 for the three months ended October 31, 2014.
For the reporting quarter, gross profit margin declined by 295 basis points versus the prior year's comparable period.
“The deleverage is primarily due to lower initial merchandise mark-up followed by higher markdowns and also from negative store comparable net sales,” Urban Outfitters explained.
As of October 31, 2014, total inventories increased by $60 million, or 15 per cent, on a year-over-year basis, which it attributed to inventory bought to stock new and non-comparable stores.
However, comparable retail segment inventories went up by just 8 per cent at cost while dipping 7 per cent in units.
SG&A expenses as a percentage of net sales surged 128 basis points from the prior year quarter from increased marketing and technology expenses which drove higher direct-to-consumer traffic.
The retailer’s effective tax rate for the third quarter of fiscal 2015 was 37.8 per cent, up from 33.3 per cent in the year ago quarter, mainly due to state tax adjustments.
During the second quarter of fiscal 2015, the Urban Outfitters Board again authorized the repurchase of an additional 10.0 million common shares.
As of October 31, 2014, the apparel retailer repurchased and retired 3.9 million common shares for approximately $132 million under the current authorization.
During the nine months ended October 31, 2014, Urban Outfitters opened 29 new stores including; 12 Free People stores, 10 Anthropologie stores and 7 Urban Outfitters stores and closed 1 Urban Outfitters store.
"While we are pleased with delivering record third quarter sales fuelled by strong performances at our Anthropologie and Free People brands, I am disappointed by the results at the Urban Outfitters brand," said CEO, Richard Hayne.
