Urban Outfitters, Inc. (URBN) has reported an impressive increase in net income for the third quarter, despite the challenges posed by the ongoing Covid-19 pandemic. The Philadelphia-based fashion retailer saw a year-over-year net income growth of 38%, reaching $76.7 million compared to $55.7 million in the same period last year. This increase can be attributed to the company’s effective cost management strategies and strong product assortments.

Although quarterly net sales slightly declined by 1.8% to $969.6 million, Urban Outfitters experienced significant growth in its digital channel, which helped offset the overall decline in revenue. The company’s digital sales played a crucial role in adapting to the changing consumer behavior during the pandemic.

Urban Outfitters also implemented cost-cutting measures and exercised tight control over its inventory and expenses to mitigate the impact of the pandemic. As a result, selling, general, and administrative expenses were reduced by 8.7% compared to the previous year, amounting to a $21.4 million decrease during the quarter.

Earnings per diluted share for the third quarter increased to $0.78, up from $0.56 in the same period last year. While comparable retail segment sales remained flat for Urban Outfitters, the Free People brand saw a notable 17% increase. However, the Anthropologie Group faced a 9% decrease, and the wholesale segment experienced a significant 24% decline in net sales.

Urban Outfitters’ year-to-date sales totaled $2.4 billion, reflecting a 16.1% decrease compared to the same period last year. The company reported a net loss of $27.3 million for the first nine months, indicating the challenges faced in the retail industry due to the ongoing pandemic.

Given the continued uncertainty surrounding the Covid-19 pandemic, Urban Outfitters has not provided any financial guidance for the fourth quarter or the full fiscal year. The company currently operates 630 stores across its Urban Outfitters, Anthropologie Group, and Free People brands in the U.S., Canada, and Europe. Additionally, its Free People and Urban Outfitters brands are also distributed through approximately 2,300 department and specialty stores worldwide.

Overall, despite the difficult operating environment, Urban Outfitters has managed to deliver strong performance in the third quarter, with record earnings per share. The company’s focus on cost management and adapting to digital channels are contributing factors to its success.

Useful links:
– Article on the impact of Covid-19 on the fashion retail industry: Fashion Retail Industry and Covid-19
– Urban Outfitters investor relations page: Urban Outfitters Investor Relations