Urban Outfitters sees sales dip

Urban Outfitters last week said first-quarter earnings fell 26 percent, but the decline was due in part to heavy markdowns of seasonal merchandise and same-store sales declines. For the three months ended April 30, net income was $20.3 million compared with $27.4 million in the same year-ago quarter. Sales rose 16.7 percent, to $270 million from $231.3 million. The company's inventories grew by 24 percent on a year-over-year basis to stock new stores. So far, the retailer has opened five new Urban stores. The company plans to open another 27 to 30 stores during the fiscal year.

Richard A. Hayne, chairman and president, said in a statement that the "recent seismic shift" in women's fashions presented challenges and opportunities for the company. He explained that to "better capitalise on future opportunities, we appropriately applied heavy markdowns during the first quarter to turn slower-moving merchandise and rationalize our weeks of supply."

By nameplate, Urban store sales gained 12.5 percent in the quarter, to $117.1 million from $104.1 million, but had a 4 percent decline in comps. Total company comps gained 3 percent in the quarter. Direct-to-consumer sales gained 16.6 percent, to $33.5 million from $28.7 million. Hayne added, "We continue to be cautious as the customers' response to our product offerings remains inconsistent."