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Nov. 23, 2020, 4:27 p.m. EST

Urban Outfitters cuts costs to boost earnings

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By Micah Maidenberg

Urban Outfitters Inc. lifted quarterly profits on gains from its namesake retail brand and expense reductions but investor attention is now likely to turn to how the chain plans to navigate the holiday shopping season as Covid-19 infections rise.

The company behind Urban Outfitters stores, Anthropologie shops and other retail brands on Monday reported a profit of $76.7 million, or 78 cents a share, for its fiscal third quarter that ended Oct. 31, up from $55.7 million, or 56 cents a share, for the year earlier. The company's profit for the quarter beat expectations, according to FactSet, and was better than the prior two periods this year.

Sales fell to $969.6 million from $987.5 million year over year, Urban said. Analysts predicted $931 million in sales for the latest quarter. Comparable sales rose 4% at Urban Outfitters locations but fell 9% for the Anthropologie business, according to the company.

For its retail business, gross profit rates improved due in part to lower merchandise markdowns as well as because the company negotiated rent concessions with landlords. Urban cited efforts to control payroll as a reason selling, general and administrative expenses fell almost 9% year over year, helping profit.

Like other nonessential retailers, this spring, the Philadelphia-based company shut down stores as the pandemic was first intensifying. It has since moved to reopen locations in line with government rules, adding safety precautions like requiring masks for employees.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

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