US lifestyle retailer Urban Outfitters posted a 12.1% drop in profits for the three months to April 30 although sales in the quarter exceeded the company’s expectations.
For its first quarter the retail group, that also operates the Anthropologie and Free People chains, said that earnings dropped to $34m (£21.4m) down from $38.6 (£24.3m) in the same quarter a year earlier.
Total net sales for the period rose 9% to $569m (£359.4m) while like-for-like sales in the company’s retail division, which include direct-to-consumer channels, rose 2% during the quarter.
Like-for-like sales at Free People and Urban Outfitters increased 2% and 6% respectively, while like-for-like retail sales at Anthropologie decreased 2% during the quarter.
Direct-to-consumer comparable net sales rose 15% and wholesale sales increased 2%.
Gross profits were $202.5m (£127.8m) compared with $193.4m (£122.2m) in the same period last year.
“Sales during the first quarter exceeded our conservative plans,” said Frank J. Conforti, chief financial officer at Urban Outfitters.
“Our inventory is well positioned,” added David McCreight chief executive at Anthropologie Group. “We expect to take fewer markdowns than we did in the prior year.”