Urban Outfitters share price rockets as clothing company reports $1bn in sales in fourth quarter

 
Caitlin Morrison
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Urban Outfitters flat sales failed to put off investors (Source: Getty)

Urban Outfitters shares have jumped by almost six per cent in after hours trading, after the retail group announced fourth quarter earnings that beat expectations.

Net income dropped to $73m (£51m) in the fourth quarter of the 2016 fiscal year, from $80m one year earlier, equivalent to 61 cents per share. Wall Street was expecting the group to report 56 cents per share.

Quarterly gross profit dropped slightly to $349.2m from $349.6m, which the company said was due to delivery and fulfilment centre expenses.

Meanwhile, sales rose by four per cent in the 2016 fiscal year compared with the previous period.

Sales rose to $3.45bn in the 12 months to 31 January 2016, up from $3.32bn the year before.

The company, which owns the Urban Outfitters, Anthropologie and Free People brands, reported sales of $1bn in the fourth quarter of 2016, flat on the final quarter of 2015.

"While apparel sales underperformed during the fourth quarter, I am pleased with the merchandise margin improvement delivered by the brands," said Richard A. Hayne, the group's chief executive, who added that Urban Outfitters' expansion categories had performed "above our expectations and continue to give us confidence in our future growth opportunities".

Urban Outfitters also said it incurred store impairment charges of $9m in the fourth quarter, which had a $7m negative impact on gross profit, and a $2m negative impact on selling, general and administrative expenses. The charges related to three stores in Europe, one in the US and one Anthropologie shop in Canada.

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