Key Takeaways
Urban Outfitters ( URBN ) shares jumped Wednesday morning after the company reported third-quarter results better than analysts had expected, thanks to rising sales across its non-Urban Outfitters brands.
On Tuesday, the retailer reported a third-quarter record of $1.36 billion in revenue , up from $1.28 billion the same time last year and slightly better than the $1.34 billion analysts had expected, according to estimates compiled by Visible Alpha.
The operator of its namesake Urban Outfitters stores along with other brands like Free People and Anthropologie recorded $102.9 million in net income for the quarter, up from $83 million a year ago and the $78.9 million analysts projected.
Urban Outfitters Sales Still Down as Free People, Anthropologie Keep Rising
Overall comparable store sales rose 1.5% year-over-year, driven by 5.8% growth at Anthropologie stores and 5.3% at Free People, each better than expected, while comparable sales at Urban Outfitters fell more than expected at 8.9%.
CEO Richard Hayne said the company is "optimistic" about demand the company is seeing ahead of the holiday shopping season, noting in Tuesday's earnings call that Urban Outfitters has seen a "remarkably resilient" consumer.
Hayne said positive sales trends seen in October continued into the start of the fourth quarter in November despite outside events like global conflict, severe weather, and the election, according to a transcript of the call from AlphaSense.
Last quarter, executives said sales had slowed at Urban Outfitters because of shifting consumer trends and the company failing to adapt to trends popular among younger consumers. Brand president Shea Jensen said in Tuesday's call that the company is "actively evaluating" the roughly half of its leases for Urban Outfitters stores that will be up over the next three years, and said some closures, downsizings, and relocations seem likely.
Urban Outfitters shares were up 14% in premarket trading to $45.84, putting them up more than 25% since the start of the year.