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Urban Outfitters rides high in Q2

Urban Outfitters reported second-quarter sales and earnings that topped Wall Street expectations, led by the strong performance of its Free People and namesake banners and fewer markdowns.

The specialty retailer earned $93 million, or 84 cents a share, in the quarter ended July 31 compared with $50 million, or 44 cents a share, in the year-ago period. Analysts had expected earnings of 77 cents a share.

Net sales rose 13.7% to $992 million, easily topping Street estimates of $981 million.

Comparable retail-segment net sales increased 13%, driven by double-digit digital sales growth and positive retail store sales. By brand, same-store sales increased 17% at Free People, 15% at Urban Outfitters and 11% at the Anthropologie Group. Wholesale segment net sales increased 10%.

On the chain’s earnings call with investors, management said it launched self-checkout technology during the quarter at the Urban Outfitters store in New York City’s Herald Square. The results have exceeded expectations, and the company is now working on rolling out self-technology to additional stores.

“The Urban Outfitters customer is clearly voting for self-checkouts with the percentage of self-checkout transactions highly exceeding expectations,” said Trish Donnelly, global CEO, Urban Outfitters. “Not only is this a convenient way for our customers to transact, but it also allows us to reposition labor to further service customers and drive conversion on the selling floor.”

At the end of the quarter, Urban Outfitters, operated 246 namesake stores in the United States, Canada, and Europe and websites; 227 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 135 Free People stores in the United States and Canada, catalogs and websites and 10 restaurants, as of July 31, 2018. Free People and Anthropologie Group wholesale sell their products through approximately 2,100 department and specialty stores worldwide.
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