Urban Outfitters Shares Soar on Fashionable Earnings

Shares of Urban Outfitters (NASDAQ: URBN  ) opened higher on Tuesday after the specialty retailer reported strong second-quarter earnings the day before. The stock was up more than 9% in early trading, as profit climbed 25% year-over-year to $76.4 million or $0.51 per share for the quarter ended July 31. This was ahead of analysts' expectations for earnings of $0.48 per share.

Despite a challenging retail environment, revenue at Urban Outfitters spiked to $758.5 million in the quarter, up from $676.3 million in the year-ago quarter. The retailer's second-quarter same-store sales were also impressive, growing 9% in the period, helped by strong sales across all of its brands. Specifically, sales from stores open at least a year increased 5% at Urban Outfitters, 9% at Anthropologie, and a whopping 38% at Free People.

CEO Richard A. Hayne was happy with the strong results, quoted in the company press release as saying, "They were driven by a favorable customer response to our product offerings, improved merchandise margins, the opening of additional stores, and better creative and marketing initiatives in our direct-to-consumer channel." Moreover, fewer markdowns helped lift profit margins to 39.3% in the period, from 37.6% in the year-ago period.

All of these factors bode well for the stock going forward. Shares of Urban Outfitters have gained less than 2% year-to-date, to where they trade at around $43 a share.

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