Urban Outfitters sales have risen at last, with earnings per share ahead of expectations

 
Sarah Spickernell
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Revenue was driven up by Christmas shoppers (Source: Getty)

Better late than never – Urban Outfitters sales increased in the fourth quarter after a series of quarterly declines.

The figures

During the three months to 31 January, Urban Outfitters comparable sales went up by six per cent – the first increase in 2014.
The US fashion company, whose brands include Urban Outfitters, Free People and Anthropologie, had an 11.6 per cent increase in revenue to $1.01bn (£670m).
The improvement was driven mainly by recovering sales at Urban Outfitters and a high demand for the Free People brand.
Earnings per share also went up to 60 cents in the fourth quarter, compared to 59 cents during the equivalent period the year before. This beat analyst expectations of a decline to 57 cents per share.

Why it's interesting

Until the fourth quarter, the company had a relatively poor year, with sales falling during each of the previous three quarters.
Over the full 12 months to 31 January, the company had an average two per cent drop in revenue. - the worst result was in the third quarter, when the figure fell by 10 per cent compared to a year earlier because of its struggle in apparel retailing.
In fact, Urban Outfitters was one of the worst-performing stocks on the S&P 500 following the release of its third quarter earnings.

Today's figures marked a positive, and somewhat surprising, turn in the company's fortunes – analysts had not expected the improvements to be so good. According to the company, the strong revenue was a direct result of sales over the Christmas period.

What Urban Outfitters said

Richard Haye, chief executive of the company, said:
We are pleased to report our first billion dollar quarter, fuelled by positive retail segment 'comps' at all of our brands. It is encouraging to see this sales trend continue into Q1.

In short

Urban Outfitters had pretty bad year up to November, but today's results indicate a change in its fortunes, especially since investors have more reason to feel positive about their returns.

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