Urban Outfitters beats as styles work with shoppers
(Reuters) - Clothing retailer Urban Outfitters Inc's (URBN.O) quarterly results handily beat Wall Street expectations as its namesake store attracted more shoppers, sending its shares up 17 percent after the bell.
Urban Outfitters, criticized for unattractive merchandise, especially at its Anthropologie unit, has been trying to turn around its business by improving merchandise, shuffling its management and stocking up prudently.
The company plans to invest between $190 million and $210 million in fiscal 2013 primarily to open new stores, Chief Executive Richard Hayne said on a conference call with analysts.
Urban Outfitters, which currently operates more than 400 stores across United States, Canada and Europe, plans to open about 51 new stores this year, of which 11 are expected to open in the current quarter.
The company also benefited from its direct-to-consumer business, which was primarily driven by higher website traffic, and said it expects the business to continue to benefit through the rest of the year.
CEO Hayne said its European operations softened in the quarter, primarily due to weakness in its London stores.
Europe has been a dim spot for many other retailers, such as Gap Inc (GPS.N) and office supply chain Staples Inc (SPLS.O).
"We are not, however, euro-skeptics," Hayne said on the call, adding that the company will continue to invest in Europe.
Profit for the quarter-ended July 31 rose to $61.3 million, or 42 cents per share, from $56.7 million, or 35 cents per share, a year earlier.
Analysts on average had expected earnings of 33 cents per share, according to Thomson Reuters I/B/E/S.
Revenue at the company, known for its bohemian and hipster designs, rose 11 percent to $676.3 million, beating analysts' expectation of $671.6 million.
Sales at its namesake stores, which cater to young adults, rose 14 percent to $310.7 million.
Sales through its websites and catalogs -- its direct-to-consumer segment -- rose 22 percent to $137.7 million, driven by higher website traffic, which rose more than 30 percent in the quarter.
Analysts on average had expected earnings of 33 cents per share on revenue of $671.6 million, according to Thomson Reuters I/B/E/S.
Urban Outfitters shares, which have risen 13 percent this year, were up at $36.55 in extended trading. They had closed at $31.28 on Monday on the Nasdaq.
(Reporting by Arpita Mukherjee and Ranjita Ganesan in Bangalore; Editing by Supriya Kurane)