Urban Outfitters Rebounds on Strength of Digital Business

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Urban Outfitters Inc. is slowly starting to recover from earlier losses this year.

The company, which counts Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn among its brands, in addition to rental subscription service Nuuly and a food and beverage business — reported a $34 million quarterly profit Tuesday afternoon , causing company shares to surge more than 15 percent in after-hours trading.

Urban Outfitters credits disciplined inventory control and better-than-expected top-line performance for the gains. The company ended the quarter with a $21.7 million reduction in inventory reserves year-over-year for its retail and wholesale segments. Inventory decreased more than 20 percent during the quarter, or by $88.3 million year-over-year.

Meanwhile, digital marketing expenses grew during the quarter, along with an increase in delivery and logistics expenses because of the company’s increased penetration online. The company ended the quarter with $663 million in cash and equivalents and $120 million in long-term debt.

 

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