• Q3 net profit of $70m, up 18% 
  • Sales rose 12% to $774m 
  • Comparable retail segment sales increased 7%

Urban Outfitters has reported an 18% increase in third-quarter net profit, bolstered by record sales including strong gains at its Anthropologie and Free People stores. 

The company, which also owns its namesake Urban Outfitters brand, said net income reached US$70m during the three months to 31 October, compared to $59.5m in the same period of last year.

Sales rose 12% to $774m from $692.9m in the prior year, while comparable retail sales increased 7%. Comparable retail net sales jumped 30% at Free People and 13% at Anthropologie, but slipped 1% at Urban Outfitters. Wholesale sales rose 21% to $50m.

Gross margin improved 11 basis points to 37.7% from 37.6% last year, primarily due to a reduction in merchandise markdowns and improved initial merchandise margins at the Anthropologie and Free People brands. 

"Fuelled by strong results at our Anthropologie and Free People brands, I am pleased to announce that URBN delivered record third quarter sales and operating profits," said CEO Richard Hayne. 

"Despite this solid performance we remain cautious about the fourth quarter given the likelihood of a highly promotional environment and this year's challenging holiday calendar."

During the first nine months of the year, net income increased 25% to $193.7m from $154.8m last year, while sales reached $2.18bn, up 12.5% on last year's $1.94bn.