Urban Outfitters clocks in with strong sales, shares fly

In June the company warned that like-for-likes were trending lower at a mid-single digit rate in the second quarter.

Net sales at the fashion retailer were up by 2.7% to a record $890.6m (consensus: $886.8m) and by 1% in like-for-like terms if the company’s direct-to-consumer channel, or what the company calls its comparable retail segment, were included.

Analysts had projected a 1.1% drop in the company’s LFLs.

That drove quarterly net earnings of $77m or $0.66 in terms of earnings per share (consensus: $0.56), up from $66.8m and $0.52 one year ago.

The company’s namesake brand saw LFL sales jump 5%, offsetting weakness at its Anthropologie Group and flat sales at Free People.

"These results were driven by a positive Retail segment 'comp' and substantial improvement in merchandise margins," the company’s boss Richard Hayne said in a statement.

Gross margins were substantially fatter, rising from 36.7% to 38.5%.

During the six months to 31 July the company bought back and retired a total of 15.0m, of that amount 2.3m corresponded to the share buy-back authorisation approved in 2014, which had now been completed, and the remainder to a 2015 authorisation to buy-back 20.0m shares.

As of 16:07 BST shares in the firm were gaining 16.39% to $36.71.