US: Urban Outfitters Q2 hit by increased markdowns
- Q2 net profit fell 20.8% to US$56.7m
- Sales increased 10% to $609m
- Gross profit margin fell 459 basis points
Fashion retailer Urban Outfitters saw net profit decline during the second-quarter as higher markdowns in women's apparel hit margins.
The retailer said yesterday (15 August) that for the three months to 31 July, net profit fell 20.8% to US$56.7m against the prior year. Over the period, sales increased 10% to $609m.
The company said that gross profit margin fell 459 basis points versus the same period of the previous year, which it attributes to increased markdowns to clear slow moving women's apparel inventory at Anthropologie and Urban Outfitters.
SG&A expenses increased by 32 basis points, which the group said was primarily due to e-commerce and catalogue investments combined with investments in technology and distribution and fulfilment facilities in Europe.
For the quarter, same-store sales fell 2% over the quarter. Same-store retail sales at Free People rose 18% over the period, while Urban Outfitters saw comparable-store sales rise 1%. Same-store retail sales at Anthropologie were flat over the quarter.
For the first-half, net income fell 23.5% to US$95.3m. Sales over the period increased 9.7% to US$1.1bn.
Commenting on the results, CEO Glen Senk said: "We remain confident in our strategies and believe we made great executional progress during the quarter. We anticipate gradual improvements in our comparable sales over the balance of the fiscal year and into spring 2012."
Shares in the company were up 0.3% at the close of yesterday's trading to US$29.69 per share.
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