(Reuters) - Urban Outfitters Inc (O:URBN) on Monday said same-store sales growth so far in the third quarter was slower than in the previous three months, raising concerns about the apparel retailer's performance in the back-to-school shopping season.
The Philadelphia-based retailer reported second-quarter comparable sales growth of 4 percent on Monday, lower than the 4.3 percent rise analysts on average had expected, according to research firm Consensus Metrix.
Urban Outfitters' shares initially rose as much as 10 percent in extended trading after it reported a better-than-expected quarterly profit, but fell nearly 7 percent when Chief Financial Officer Frank Conforti said sales were slower so far in August.
"Our store sales have started out slower than what we planned and where we finished the second quarter," Conforti said on a conference call.
Increasing competition from fast fashion brands such as H&M, Inditex's (MC:ITX) Zara, and Forever 21, along with a series of fashion misses, have turned women away from Urban Outfitters' stores.
Urban Outfitters also said it expects a strong dollar to lower full-year earnings by about 3 percent.
In the second quarter, comparable sales at Anthropologie, the company's biggest brand by sales, grew 2 percent, lower than the 2.3 percent rise analysts had expected.
Urban Outfitters said growth at Anthropologie was hurt by price and trend misses in dresses and accessories, and expects some fashion errors in the second half of the year.
Total comparable sales rose 4 percent, less than the 4.3 percent rise analysts had expected.
Second-quarter net income fell slightly to $66.8 million from $67.5 million a year earlier. On a per share basis, net income rose to 52 cents from 49 cents, due to share buybacks.
Analysts on average had expected earnings of 49 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 7 percent to $867.5 million, lower than the $881.2 million analysts expected.