• Q1 net income fell 12% to $34m from $38.6m
  • Total sales rose 9% to a record $569m from $524m
  • Gross margin fell to 35.6% from 36.9% 

Retailer Urban Outfitters Inc has posed a 12% drop in first-quarter profit after the cost of opening new stories and higher markdowns on a few women's apparel lines offset a rise in sales.

The company, which operates the Anthropologie, Free People and Urban Outfitters brands, said comparable store sales fell 1% in the three months to 30 April.

But including the direct-to-consumer channels saw comparable retail segment sales rise by 2% to $537.7m. Gains of 2% to $61.7m at Free People and a rise of 6% to $266.4m at Urban Outfitters offset a 2% fall to $235.1m at Anthropologie.

Direct-to-consumer comparable net sales increased 15% to $117.1m and wholesale revenues were also up by 2% at $31.2m.

The company's CEO Richard Hayne said the record first quarter sales "were driven in part by positive regular price 'comp' sales."

He added: "We are encouraged by the customer response to the steady progress our brands have made in creative and product execution."

Gross margin fell to 35.6% from 36.9% with the cost of opening new stores and slightly higher markdowns on a few women's apparel categories across all brands contributing to the decline.