Urban Outfitters Inc.'s profit and margins improved in the second quarter on higher sales and fewer markdowns.

Shares, which have risen more than one-third this year, rose 8% to $33.79 in after-hours trading.

The Philadelphia-based retailer, whose brands include Anthropologie and Free People in addition to the eponymous chain, had warned in June, when it filed its regulatory report for the first quarter, that comparable sales were down in the mid single-digit range during the second quarter.

On Tuesday, it reported instead that comparable sales rose 1% from the year-ago period, driven by a 5% increase at the Urban Outfitters brand. Comparable sales were flat at Free People and fell 3% at the Anthropologie Group, which includes BHLDN and Terrain and is its largest brand by sales. Analysts surveyed by FactSet had projected a 1.1% decline in comparable sales.

Urban Outfitters defines comparable retail sales, a key performance metric for retailers, as online sales and sales at stores open for at least a year.

Over all, for the period ended July 31, Urban Outfitters reported a profit of $76.9 million, or 66 cents a share, compared with $66.8 million, or 52 cents a share, a year earlier. The latest results are based on 9% fewer shares outstanding.

Sales rose 2.7% to $890.6 million.

Vetri Family restaurants, which the retailer bought this year, added $3.6 million to revenue.

Analysts surveyed by Thomson Reuters had projected 56 cents a share on $886.8 million in sales.

Gross profit margin, the percentage of sales the retailer makes after accounting for production costs, improved to 38.5% from 36.7% a year earlier.

Urban Outfitters, which opened its first store in 1970 near the University of Pennsylvania campus, has expanded into a multinational clothing company with more than $3 billion in annual sales. The retailer's annual profit has declined in the last two years.

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

August 16, 2016 17:25 ET (21:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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