By Dhirendra Tripathi
Investing.com -- Urban Outfitters (NASDAQ:URBN) shares jumped in Wednesday’s premarket following an optimistic outlook for the second quarter of fiscal 2022 after positively surprising with its first three-month numbers.
The retailer benefited from consumers returning in larger numbers to its stores and digital channels as lockdown restrictions were lifted and people were happy to spend their stimulus checks.
Alongside first quarter numbers of last year, the retailers also gave comparisons with fiscal 2020 quarter numbers when most of the world hadn’t heard about coronavirus.
“. . .we believe the second quarter could continue to show steady sales improvement vs. FY’20,” Urban’s Co-President and COO Frank Conforti said at its conference call for analysts Tuesday.
The company expects the rise in its selling, general and administrative expenses to stay contained below its sales growth in the quarters ahead.
It will also open more stores this year, Conforti said, pegging the number at 54 excluding franchise partners’. It will close 18 of the existing ones.
Urban Outfitters surprised on the gross margin front too. At a call with analysts in March, it had warned its gross profit margins for the first quarter could be down several hundred basis points to fiscal 2020’s.
Gross profit margins, as a percentage of net sales, came at 32.4% for the quarter ended April 30. It was 31.1% in the same quarter two years ago.
Urban sales for the first quarter increased by 7% to a record $927 million. Net income for the quarter was $54 million or $0.54 per diluted share. It was $0.31 in the April quarter of fiscal 2020.