During fiscal Q3 2010 (ended October 31, 2009), URBN's retail chains announced net earnings of $62 million, and net sales increased by 6% compared to the prior-year quarter. Operating margin improved to 19%, mainly due to strict cost-cutting measures, and comparable sales improved due to market-share gains.
Net sales for the second quarter of fiscal 2010 increased 1% from the same period in fiscal 2009. Comparable store sales decreased by 6.2%. Despite the decrease in store sales, the company's increased revenue in addition to its international expansion have made it attractive to investors.
After posting a loss in the first quarter of fiscal 2009, analysts downgraded URBN from "buy" to a "hold" rating, decreasing confidence in the retailer and causing a decrease in the company's stock price.
Third quarter total sales increased to $478 million. The company also achieved earnings of 35 cents per share for this quarter alone. Total comp store sales increased by 10%
The financial crisis of 2008, which has since developed into a recession, has made consumers reluctant to spend money on non-essential goods. Retailers from The Gap to Saks Fifth Avenue have had trouble keeping consmers spending. In other words, consumer and investor confidence in the retail industry has waned, leading to a large-scale decrease in stock prices, which have since stagnated at a lower level than they were before the crisis began.
Evidence of extremely strong comp-sales leads analysts and company officials to raise their growth expectations and earnings expectations for the quarter.
