Trendy lifestyle retailer Urban Outfitters Inc has announced first quarter earnings of $20.3 million for the three months ended April 30th 2006 from $27.4 million, a year ago.
As previously stated in sales release on May 4th 2006, net sales for the first quarter increased by 17 percent to $270 million from $231.3 million last year. Fueling this increase over the prior year was:
-- a 22 percent increase in the number of stores in operation;
-- a 65 percent jump in Free People wholesale sales; and
-- a 17 percent gain in direct-to-consumer sales.
The combination of these factors more than offset a 3 percent decrease in total company comparable store sales during the first quarter.
By brand, 'comp' store sales decreased by 2 percent at Anthropologie and 4 percent at Urban Outfitters, and increased by 14 percent at Free People. In the prior year's first quarter, 'comps' at those brands increased by 9 percent, 13 percent and 45 percent, respectively, and total company 'comps' rose by 11 percent.
"The recent seismic shift in women's fashion presents both challenges and opportunities for our company," stated Richard Hayne, Chairman and President.
"In order to better capitalize on future opportunities, we appropriately applied heavy markdowns during the first quarter to turn slower moving merchandise and rationalize our weeks of supply. Our 'comp' store inventories decreased by 1,000 basis points during the three months, ending the quarter up 3 percent -- a more appropriate number given the current sales trend. We continue to be cautious as the customers' response to our product offerings remains inconsistent," added Hayne.
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