Exterior view of an Urban Outfitters store is seen in Pasadena, California, May 22, 2021.
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Shares of Urban Outfitters popped about 8% Tuesday after the company reported fiscal first-quarter earnings that beat Wall Street’s estimates on the top and bottom lines.
Here’s how the apparel retailer did compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: 56 cents versus 35 cents expected
- Revenue: $1.11 billion versus $1.09 billion expected
The company’s reported net income for the three-month period that ended April 30 was $52.82 million, or 56 cents a share, compared with $31.53 million, or 33 cents a share, a year earlier.
Sales rose to $1.11 billion, up about 6% from $1.05 billion a year earlier.
Some retailers this earnings season are benefiting from a more stable supply chain and reduced freight expenses that could help their margins if they’re able to hold the line on promotions. Urban Outfitters is one of them.
Other apparel and shoe retailers, such as Foot Locker, saw their margins dip due to promotions and a slowdown in consumer spending. Urban Outfitters, meanwhile, saw margins increase 2.6 percentage points due to higher merchandise markups driven by lower transportation costs. The company said margins also benefited from lower markdowns at its Anthropologie and Free People brands.
Sales at Urban Outfitters’ namesake banner dropped 13% year over year, but sales at its Free People and Anthropologie brands each saw double-digit increases.
The company’s rental program Nuuly, a major competitor to Rent the Runway that’s growing among Gen Z shoppers, saw a 118% increase in subscribers compared with the prior-year quarter, and a 125% increase in sales.
In March, the company said it expects Nuuly to report its first profitable quarter later this year. It’s not yet clear if the segment has hit that milestone.
