New York, NY, United States (4E) – Urban Outfitters Inc. reported a 7.4 percent rise in fiscal fourth-quarter profit, due to increase in sales, though problems persist for the company’s namesake brand prompting the retailer to provide a light warning about its performance for the current quarter.
Profit was at $88.7mn, or 59 cents per share, for the quarter ended Jan. 31, compared with $82.5mn, or 56 cents a share, in the previous year.
The company reported in February that fourth-quarter sales rose 5.7 percent to $905.9mn.
Gross margin slightly increased to 36.7 percent from 36.6 percent, helped by sharp improvement in the markdown rate of the company’s Anthropologie brand. The positive performance was mostly offset by higher markdowns at the company’s namesake brand.
Comparable retail sales, which include those in the company’s catalog and online businesses, gained 1 percent in the fourth-quarter. Same-store sales rose 10 percent at Anthropologie and surged 20 percent at Free People, but declined 9 percent at the Urban Outfitters brand.
Teen-focused retailers are faced with intensifying competition from fast-fashion players such as H&M Hennes & Mauritz AB and Forever 21 Inc., hurting sales at Abercrombie & Fitch Co. and others. Weak customer traffic at malls has also concerned analysts, though Urban Outfitters continues to post increasing sales.