The gross profit of the company in Q1 rose 19.8 per cent to $489.1 million, with a 278-basis point (bps) increase in gross margin to 36.8 per cent, aided by lower markdowns and occupancy leverage. The increase in gross profit dollars was also due to higher net sales and the improved gross profit rate. Selling, General and Administrative (SG&A) expenses rose 8.1 per cent but improved as a percentage of sales, benefiting from reduced litigation costs, URBN said in a press release.
The retail segment sales grew 6.4 per cent, supported by a 4.8 per cent increase in comparable sales. The Anthropologie brand led the growth with a 6.9 per cent rise, followed by Free People at 3.1 per cent and Urban Outfitters at 2.1 per cent.
The Nuuly subscription business surged 59.5 per cent, buoyed by a 52.9 per cent increase in active subscribers. Wholesale sales grew 24.2 per cent, driven mainly by Free People’s 25.6 per cent rise in sales to department and specialty stores.
During the quarter, the company opened 13 new stores and repurchased 3.3 million shares worth approximately $152 million. Inventory rose 14.6 per cent, reflecting increased sales and early receipts. The company ended the quarter with $189.4 million in cash and $285.6 million in marketable securities.
“We are excited to announce record first quarter revenues and profits. Our success was driven by positive sales growth and improved profitability across all brands and segments. We believe these results demonstrate the strength of our brands and the effectiveness of our strategy, giving us confidence in URBN’s continued success,” said Richard A Hayne, chief executive officer (CEO) at URBN.
ALCHEMPro News Desk (SG)
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